Exxon Mobil Corporation (NYSE:XOM) penned a deal with Enterprise Products Partners L.P. (NYSE:EPD) and its affiliates to acquire a 40% undivided joint interest (UJI) in Enterprise's Bahia natural gas liquids (NGL) pipeline.
Details
The Bahia pipeline, which spans 550 miles, is currently in commissioning and will begin commercial operations thereafter.
It will have an initial capacity to transport 600,000 barrels per day (BPD) of NGLs from the Midland and Delaware basins of West Texas to Enterprise’s Mont Belvieu fractionation complex.
Also Read: Analysts Revised ExxonMobil EPS Estimates, Emphasizes Permian Growth Potential
The transaction, pending regulatory approval, is expected to close by early 2026.
Post deal-closure, the companies plan to boost Bahia's capacity to 1 million BPD by adding pumping infrastructure and 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 in the Delaware Basin.
The expansion and extension are expected to be concluded in the fourth quarter of 2027.
ExxonMobil intends to name its interest in the pipeline as "Cowboy Connector," and Enterprise will serve as the operator of the combined system.
Management Commentary
“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.
”From 2024 to 2030, NGL production in the Permian Basin is expected to increase by over 30 percent. This expansion supports this growth by providing critical takeaway capacity for the basin.”
Recent Key Deals
This week, Exxon collaborated with BASF to advance methane pyrolysis technology, aiming to deliver efficient, low-emission hydrogen solutions for industry.
As per the deal, the companies will 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 are up 0.40% at $117.82 premarket at the last check on Thursday.
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