Summit Midstream takes FID on Double E mainline compressor project
Summit Midstream Corp. has taken a final investment decision (FID) on the installation of a bidirectional mainline compressor station on the Double E Pipeline system following a recent open season.
The expansion, supported by a new long-term firm transportation agreement with an investment-grade shipper, is expected to increase forward-haul capacity to the Waha Hub by about 900 MMcfd, the company said in a release Aug. 31. It is expected to enter service in fourth-quarter 2028.
The project reflects growing demand for natural gas infrastructure and additional takeaway capacity from the Delaware basin, the company said.
Summit said the expansion, along with new plant connections and related infrastructure, will cost about $100 million net to its 70% interest. The Double E joint venture has already ordered the long-lead gas turbine compression units needed for the project. The expansion remains subject to Federal Energy Regulatory Commission (FERC) and other customary regulatory approvals.
The company executed a new long-term take-or-pay transportation agreement for 200 MMcfd with an investment-grade shipper. With the agreement, Double E has secured about 550 MMcfd of binding long-term take-or-pay commitments through the compression expansion open season. Total contracted firm capacity on the pipeline is now about 2.2 bcfd.
Summit said it has secured financing to fund its share of the Double E expansion and expects existing loan commitments to cover anticipated project costs.
Discussions with shippers are continuing for the remaining 450 MMcfd of incremental forward haul capacity, said Heath Deneke, president, chief executive officer, and chairman.
Deneke said the company also sees future growth opportunities tied to data center development in Texas and New Mexico and additional downstream pipeline connections seeking access to Permian basin gas supplies.
Double E is a 135-mile FERC-regulated interstate natural gas pipeline that entered service in November 2021. The system transports gas from receipt points in the Delaware basin to delivery points in and around the Waha Hub in Texas. The pipeline is owned by subsidiaries of Summit Midstream Corp. and ExxonMobil, which hold 70% and 30% interests, respectively. Summit Midstream Permian II LLC operates the system.