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ExxonMobil Makes Major Play for Permian Pipeline Access With Enterprise Deal

MarketDash Editorial Team
18 days ago
ExxonMobil is acquiring a 40% stake in Enterprise's 550-mile Bahia NGL pipeline, with plans to expand capacity to 1 million barrels per day and extend the system to its New Mexico processing plant by late 2027.

Exxon Mobil Corporation (XOM) has struck a deal with Enterprise Products Partners L.P. (EPD) to acquire a 40% undivided joint interest in Enterprise's Bahia natural gas liquids pipeline. It's the kind of infrastructure move that signals where ExxonMobil sees the future of Permian production heading—and it's not just about oil anymore.

Pipeline Details and Expansion Plans

The Bahia pipeline stretches 550 miles and is currently in commissioning, preparing to start commercial operations. Once up and running, it'll have the capacity to move 600,000 barrels per day of NGLs from the Midland and Delaware basins in West Texas to Enterprise's Mont Belvieu fractionation complex. That's where NGLs get separated into their component products like ethane, propane, and butane.

But the companies aren't stopping there. Pending regulatory approval, the transaction should close by early 2026. After that, they're planning a substantial upgrade: adding pumping infrastructure to boost Bahia's capacity to 1 million barrels per day, plus constructing a 92-mile extension to ExxonMobil's Cowboy natural gas processing plant in Eddy County, New Mexico. This extension will also connect to several Enterprise-owned facilities scattered across the Delaware Basin.

The expansion and extension project is slated to wrap up in the fourth quarter of 2027. ExxonMobil plans to call its portion of the pipeline "Cowboy Connector," while Enterprise will handle operations for the entire combined system.

Why This Matters

"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.

The numbers back up that perspective. From 2024 to 2030, NGL production in the Permian Basin is expected to jump by over 30%. Teague added that "this expansion supports this growth by providing critical takeaway capacity for the basin." Translation: as drilling operations pull more natural gas out of the ground alongside oil, you need somewhere to send all those liquids, and fast.

Recent Strategic Moves

This isn't ExxonMobil's only big infrastructure play this week. The company also teamed up with BASF to advance methane pyrolysis technology, aiming to deliver efficient, low-emission hydrogen solutions for industrial applications. Under that agreement, they'll build a demonstration plant at ExxonMobil's Baytown Complex, producing up to 2,000 tons of low-emission hydrogen and 6,000 tons of solid carbon annually.

Price Action: XOM shares were trading up 0.40% at $117.82 in premarket activity on Thursday.

Back to News

ExxonMobil Makes Major Play for Permian Pipeline Access With Enterprise Deal

MarketDash Editorial Team
18 days ago
ExxonMobil is acquiring a 40% stake in Enterprise's 550-mile Bahia NGL pipeline, with plans to expand capacity to 1 million barrels per day and extend the system to its New Mexico processing plant by late 2027.

Exxon Mobil Corporation (XOM) has struck a deal with Enterprise Products Partners L.P. (EPD) to acquire a 40% undivided joint interest in Enterprise's Bahia natural gas liquids pipeline. It's the kind of infrastructure move that signals where ExxonMobil sees the future of Permian production heading—and it's not just about oil anymore.

Pipeline Details and Expansion Plans

The Bahia pipeline stretches 550 miles and is currently in commissioning, preparing to start commercial operations. Once up and running, it'll have the capacity to move 600,000 barrels per day of NGLs from the Midland and Delaware basins in West Texas to Enterprise's Mont Belvieu fractionation complex. That's where NGLs get separated into their component products like ethane, propane, and butane.

But the companies aren't stopping there. Pending regulatory approval, the transaction should close by early 2026. After that, they're planning a substantial upgrade: adding pumping infrastructure to boost Bahia's capacity to 1 million barrels per day, plus constructing a 92-mile extension to ExxonMobil's Cowboy natural gas processing plant in Eddy County, New Mexico. This extension will also connect to several Enterprise-owned facilities scattered across the Delaware Basin.

The expansion and extension project is slated to wrap up in the fourth quarter of 2027. ExxonMobil plans to call its portion of the pipeline "Cowboy Connector," while Enterprise will handle operations for the entire combined system.

Why This Matters

"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.

The numbers back up that perspective. From 2024 to 2030, NGL production in the Permian Basin is expected to jump by over 30%. Teague added that "this expansion supports this growth by providing critical takeaway capacity for the basin." Translation: as drilling operations pull more natural gas out of the ground alongside oil, you need somewhere to send all those liquids, and fast.

Recent Strategic Moves

This isn't ExxonMobil's only big infrastructure play this week. The company also teamed up with BASF to advance methane pyrolysis technology, aiming to deliver efficient, low-emission hydrogen solutions for industrial applications. Under that agreement, they'll build a demonstration plant at ExxonMobil's Baytown Complex, producing up to 2,000 tons of low-emission hydrogen and 6,000 tons of solid carbon annually.

Price Action: XOM shares were trading up 0.40% at $117.82 in premarket activity on Thursday.