The Permian Basin continues to solidify its role as the driving force behind U.S. oil and gas production. With rising natural gas and NGL output exceeding expectations, midstream companies are ramping up investments in infrastructure to meet growing demand. Enterprise Products Partners LP, a leading midstream operator, is taking a strategic approach to expansion, focusing on pipeline investments, LNG and LPG exports, and securing fee-based revenue to ensure long-term stability.
Permian Production Growth: Surpassing Expectations
The Permian’s rich natural gas and NGL production is growing at an accelerated pace, forcing midstream players to rethink their investment strategies. Enterprise executives highlighted that Permian growth is exceeding prior forecasts, and the company is already preparing to update its projections in Q2 2025.
🗣 Jim Teague, Co-CEO:
“Rich natural gas production, just sticking to the Permian, continues to exceed our expectations. We will be reforecasting and publishing new forecasts probably sometime in the second quarter.”
The increase in natural gas liquids (NGLs) and associated gas production is driving demand for more processing plants, fractionation capacity, and export infrastructure. Enterprise is making significant investments in gas processing and takeaway capacity to ensure producers can monetize these growing volumes efficiently.
Midstream Expansion in the Permian: Gas Processing & Sour Gas Infrastructure
To keep up with soaring Permian gas production, Enterprise is expanding its processing and sour gas treating capacity.
Key Investments:
✅ Two new gas processing plants set to go online in 2025.
✅ Expansion of sour gas treating facilities in the Delaware Basin.
✅ New Acid Gas Injection (AGI) wells to support higher sulfur gas production.
🗣 Natalie Gayden, SVP, Natural Gas Assets:
“We are permitting a third AGI well and expanding the two existing AGI wells. We’ll build our fourth train and have our eyes on a fifth.”
The Piñon Midstream acquisition in 2024 reinforced Enterprise’s position in sour gas processing. As drilling intensifies in the Delaware Basin, the ability to handle high-sulfur gas efficiently will be a key differentiator in the midstream market.
Pipeline Investments: Expanding Permian Takeaway Capacity
With NGL and crude oil production rising, Enterprise is investing in pipeline infrastructure to ensure smooth transport from the wellhead to export hubs.
Major Pipeline Expansions:
✅ Bahia NGL Pipeline (Q4 2025) – Increasing NGL takeaway from the Permian.
✅ Seminole Pipeline Conversion (2026) – Reverting to crude service to balance takeaway needs.
✅ Neches River Export Expansion (2025) – Enhancing LPG and ethane export capacity.
🗣 Justin Kleiderer, SVP, Pipelines & Terminals:
“After Bahia enters service in late 2025, we will quickly convert Seminole back to crude service, ensuring we maintain balance across our network.”
The Bahia NGL pipeline is a crucial addition, providing greater Y-grade (unfractionated NGL) takeaway capacity from the Permian to Mont Belvieu. As Permian drilling intensifies, these pipeline investments will ensure Enterprise can efficiently move increasing volumes of crude oil, NGLs, and natural gas to market.
LNG, LPG & NGL Export Growth: Expanding Enterprise’s Global Reach
Enterprise is making substantial investments in U.S. hydrocarbon exports, targeting LNG, LPG, and NGL markets in Asia and Europe.
Key Export Projects:
✅ Neches River Export Expansion (Phase 1 – 2025) – Boosting LPG, ethane, and butane exports.
✅ Morgan’s Point Terminal Expansion – Increasing ethane and ethylene export capacity.
✅ 85% of upcoming LPG export capacity is already contracted, providing long-term margin stability.
🗣 Jim Teague on Export Growth:
“We exported over 70 million barrels of hydrocarbons in December. Our goal is to export over 100 million barrels a month by 2027.”
The rise in U.S. ethane and LPG exports is being driven by growing demand in Asia and Europe, as countries shift away from naphtha-based petrochemical production.
🗣 Brent Secrest, EVP, Chief Commercial Officer:
“We have secured another ethane offtake customer in Asia, this one in Vietnam, and are working on additional global supply agreements.”
With new long-term ethane contracts signed in Southeast Asia, Enterprise is well-positioned to benefit from rising global demand for U.S. hydrocarbons.
Fee-Based Revenue Strategy: Mitigating Volatility & Strengthening Cash Flow
To reduce exposure to commodity price volatility, Enterprise is focusing on expanding its fee-based revenue model.
🗣 Christopher D’Anna, SVP, Petrochemicals:
“The way our PDH contracts are set up, they’re all toll-based. So it’s cost-plus. That means margins are protected regardless of commodity price fluctuations.”
By securing long-term fee-based contracts, Enterprise ensures that a significant portion of its revenue remains stable, even during commodity market downturns.
Other examples of Enterprise’s fee-based approach:
✅ 85% of upcoming LPG export capacity is already contracted.
✅ Pipeline & processing infrastructure operates on take-or-pay agreements.
✅ PDH & ethane export contracts follow a cost-plus model, ensuring stable margins.
This strategic shift to fee-based revenue will provide stronger cash flow predictability, making Enterprise’s business more resilient to market fluctuations.
Conclusion: Enterprise’s Growth is Aligned with Long-Term Market Demand
As the Permian continues to grow, Enterprise is positioning itself at the center of the midstream expansion. By investing in processing plants, pipelines, and export terminals, the company is ensuring it can capture the full value chain from wellhead to water.
🔹 Permian production growth is exceeding forecasts, requiring more takeaway capacity.
🔹 Enterprise is expanding gas processing, sour gas treatment, and NGL fractionation.
🔹 New pipelines (Bahia, Seminole, Neches River) will ensure efficient hydrocarbon transport.
🔹 LNG, LPG, and NGL export growth is driving long-term contracts, supporting fee-based revenue.
🔹 Enterprise is prioritizing toll-based and long-term contracts to ensure margin stability.
With a balanced capital strategy and a focus on long-term, fee-based growth, Enterprise remains a dominant player in the midstream sector, prepared to capitalize on the next wave of energy expansion.
