Oil and gas supermajor ExxonMobil will buy a 40% stake in the new Bahia natural gas liquids (NGL) pipeline from Enterprise Products Partners as producers and pipeline operators expand gas takeaway capacity in the Permian basin.
Enterprise Products Partners on Thursday said it had entered into an agreement with ExxonMobil, which will acquire a 40% undivided joint interest in Enterprise’s Bahia NGL pipeline that is currently being commissioned.
The closing of the transaction is subject to regulatory approvals and is expected by early 2026, Enterprise said.
The 550-mile Bahia pipeline, expected to begin commercial operations immediately after commissioning is completed, will have an initial capacity to transport 600,000 barrels per day of NGLs from the Midland and Delaware basins of West Texas to Enterprise’s Mont Belvieu fractionation complex.
Per the agreement, Enterprise and ExxonMobil plan to increase Bahia’s capacity to 1 million bpd upon closing of the transaction, by adding incremental pumping capacity and constructing a 92-mile extension of Bahia to ExxonMobil’s Cowboy natural gas processing plant in Eddy County, New Mexico.
The extension will also connect to multiple Enterprise-owned processing facilities in the Delaware Basin. The expansion and extension are expected to be completed in the fourth quarter of 2027, with ExxonMobil’s interest referred to as the “Cowboy Connector.” Enterprise will serve as operator of the combined system, the company said.
“As the ratio of natural gas and NGL production to crude oil production continues to increase in the Permian, the Bahia pipeline will be an essential artery to deliver mixed NGLs to the fractionation complex in Mont Belvieu,” said A.J. “Jim” Teague, co-chief executive officer of Enterprise’s general partner.
NGL production in the Permian Basin is expected to jump by over 30% between 2024 and 20230, Teague said, adding “This expansion supports this growth by providing critical takeaway capacity for the basin.”
Exxon, for its part, considers the Permian as a core area for production growth. The basin in West Texas and southeastern New Mexico helped the supermajor beat analyst estimates of its third-quarter results.
By Michael Kern for Oilprice.com
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