Energy Transfer LP announced an increase in the transportation capacity of Transwestern Pipeline’s planned Desert Southwest expansion project to meet additional customer demand.
The continued population growth and positive economic momentum throughout Arizona and New Mexico will require efficient, reliable energy sources. This recently announced project will serve these markets from Energy Transfer’s premier asset base in the prolific Permian Basin.
To meet the need for additional capacity identified through a recent open season, the project’s mainline pipeline diameter will be upsized from 42 inches to 48 inches, which will increase the project’s capacity to up to 2.3 billion cubic feet per day, depending on final compression configuration. There is significant demand growth in the Desert Southwest region, including the potential to retire and or convert coal-fired power plants to natural gas, which could further benefit the project. The ultimate capacity of the Desert Southwest expansion project will be based on market demand.
Energy Transfer continues to see strong support from energy markets in the region, including:
“Transwestern’s Desert Southwest pipeline expansion is an important critical source of natural gas,” said Ted Geisler, APS President and CEO. “We look forward to Energy Transfer enhancing this project to enable greater resources across the region.”
“Natural gas generation is an important part of SRP’s all-of-the-above approach to ensuring reliability and affordability for our customers,” said Bobby Olsen, SRP Associate General Manager and Chief Power System Executive. “The Transwestern Desert Southwest Pipeline expansion will help enable us to meet the region’s growing power needs and strengthen Arizona’s energy infrastructure.”
“We applaud the announcement of additional pipeline capacity along the Desert Southwest expansion project,” said Patrick Ledger, CEO of Arizona G&T Cooperatives. “This infrastructure is urgently needed to power the growth and business development taking place in rural Arizona.”
The upsized project is now expected to cost up to approximately $5.6 billion excluding Allowance for Funds Used During Construction (AFUDC). As a result, Energy Transfer’s total growth capital expenditures for 2026 are expected to increase by approximately $200 million. The additional capital investment provides an efficient means to capture growing demand sources while providing upside benefits to the project.
Energy Transfer continues to expect the project to be in-service by the fourth quarter of 2029.
