Energy Transfer LP (NYSE: ET) has announced plans to increase the transportation capacity of the proposed Transwestern Desert Southwest pipeline expansion in response to rising customer demand across Arizona and New Mexico. Ongoing population growth and economic development in the region are driving the need for dependable and efficient energy supply, which the project is designed to support using natural gas sourced from Energy Transfer’s Permian Basin asset network.
Following strong interest identified during a recent open season, the company will increase the mainline pipeline diameter from 42 inches to 48 inches. This enhancement is expected to raise the project’s throughput to as much as 2.3 billion cubic feet per day, subject to final compression design. Demand in the Desert Southwest continues to rise, including opportunities to retire or convert coal-fired power generation facilities to natural gas. The project’s final capacity will be determined based on market requirements.
Ted Geisler, President and CEO of Arizona Public Service (APS), said the Desert Southwest expansion is a critical source of natural gas supply and welcomed the decision to increase capacity to serve growing regional needs. Bobby Olsen, Associate General Manager and Chief Power System Executive at Salt River Project (SRP), noted that natural gas remains a key component of SRP’s balanced energy strategy and that the expansion will strengthen Arizona’s energy reliability and infrastructure.
Patrick Ledger, CEO of Arizona G&T Cooperatives, emphasized the importance of additional pipeline capacity in supporting economic growth and electricity demand in rural communities.
With the expanded scope, the project’s estimated cost is expected to reach approximately $5.6 billion, excluding allowance for funds used during construction. As a result, Energy Transfer anticipates an increase of around $200 million in total growth capital expenditures for 2026. The additional investment is expected to position the company to efficiently meet growing demand while enhancing the long-term value of the project.
Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified energy infrastructure networks in the United States, comprising approximately 140,000 miles of pipelines and related assets across 44 states. The partnership’s operations span natural gas midstream, interstate and intrastate transportation and storage, crude oil, natural gas liquids, refined products transportation and terminaling, and NGL fractionation. Energy Transfer also holds significant ownership interests in Sunoco LP (NYSE: SUN) and USA Compression Partners, LP (NYSE: USAC).
