A Hidden Constraint Limits Permian Gas Growth

Posted by: East Daley Analytics

Gas pipeline takeaway from the Permian Basin is set to rapidly expand in the years ahead, an important element for meeting robust growth in US natural gas demand. Yet this buildout misses a critical component to bring new supply to market. Summit Midstream (SMC) aims to fill this breach with a new expansion.

In the Macro Supply & Demand Report, East Daley Analytics forecasts US natural gas demand will increase by ~21 Bcf/d over the next five years, driven by LNG exports and incremental power demand from data centers. Meeting this growth will require substantial supply additions, with the Permian projected to contribute ~6.5 Bcf/d through 2030.

Why Double E Matters

Summit Midstream’s new Double E Pipeline expansion targets this constraint. The system is now fully subscribed at its existing 1.6 Bcf/d capacity after Summit signed new long-term agreements totaling 540 MMcf/d, with ramp-up expected between 2026 and 2029.

Summit announced a binding open season for the expansion on its 4Q25 earnings call. SMC plans to add ~800 MMcf/d through new compression, increasing capacity to over 2.4 Bcf/d by 2028. The project is pending regulatory approval and further commercial backing.

Double E’s strategic value lies in its positioning. The pipeline connects northern Delaware processing plants (30–100 miles northwest of Waha) to major takeaway corridors. It interconnects with key long-haul systems, including Gulf Coast Express, Permian Highway Pipeline, and Transwestern. It also expands optionality with planned links to Energy Transfer’s (ET) new Desert Southwest and Hugh Brinson projects, enabling bidirectional market access.

The Permian is transitioning from a takeaway-constrained basin to a connectivity-constrained basin. While downstream capacity is sufficient on paper, molecules cannot reach those pipes without adequate intra-basin infrastructure.

Double E exemplifies the next wave of midstream development — assets designed not to move gas out of basin, but to bridge the gap between processing growth and existing takeaway hubs.

Bottom Line: Future Permian gas growth is increasingly dependent on intra-basin pipeline buildout. Without it, processing expansions in the northern Delaware risk becoming stranded, regardless of how much long-haul capacity is added. – Oren Pilant Tickers: ET, SMC.