#United States #Houston #Energy Infrastructure #Summit Midstream #Double E Pipeline

Summit Midstream Corporation's Bold Step for Double E Pipeline Expansion

Summit Midstream Corporation (NYSE: SMC) made headlines with its latest announcement on August 31, 2026. The company unveiled that its joint venture, Double E Pipeline, LLC, reached a pivotal final investment decision concerning the much-anticipated mainline compression expansion project. This decision comes on the heels of a successful open season and a crucial long-term firm transportation agreement with a reputable investment-grade shipper.

Key Highlights of the Decision

Summit Midstream expects significant milestones from this project:

• - The pipeline expansion is scheduled to be operational by the final quarter of 2028.
• - A new long-term take-or-pay transportation agreement promises 200 MMcf/d, raising the total contracted firm capacity on Double E Pipeline to approximately 2.2 Bcf/d.
• - Convert an existing uncommitted accordion worth $50 million at Summit Permian Transmission to a committed capacity, resulting in an overall financing potential of $100 million to support Double E’s projected capital contributions.
• - Future growth opportunities associated with expanding data center developments in Texas and New Mexico.

Management Insights

Heath Deneke, the President, CEO, and Chairman of Summit, expressed enthusiasm regarding this announcement. He emphasized the essential role of the Double E Pipeline for producers and processors operating in the Delaware Basin. This pipeline provides reliable gas transmission service, facilitating access to numerous downstream markets. The intense interest from shippers during the open season underscores the pipeline’s strategic importance and its associated long-term growth prospects.

Deneke shared impressive statistics from the open season, which resulted in 550 MMcf/d in new long-term commitments. These commitments played a crucial role in the company's decision to proceed with the compression expansion. Summit is also in discussions with various shippers to fill the remaining 450 MMcf/d incremental forward haul capacity.

The anticipated investment of around $100 million (net to Summit’s 70% stake) will encompass the installation of a new mainline compression station and necessary infrastructure enhancements. Funding will be entirely derived from the previously confirmed term loan at Summit Permian Transmission and the newly committed accordion of $50 million.

“We anticipate tremendous production growth in our operational areas surrounding Delaware Basin,” Deneke mentioned while discussing future prospects. He is confident that long-term contracts for expanding capacities will be secured in the upcoming months. Current projections suggest Summit's Permian Segment Adjusted EBITDA could escalate from around $37 million in 2026 to over $100 million by 2030.

Future Growth Opportunities

Looking forward, Deneke is optimistic about significant demand-pull growth opportunities emerging from proposed data center developments in Texas and New Mexico. Furthermore, the capacity for the pipeline to connect with additional egress pipelines stands to enhance access to the valuable Permian gas supply.

The compression expansion project consists of installing a bi-directional mainline compressor station on the Double E system, which will increase forward haul capacity to Waha by approximately 900 MMcf/d. The overall expenditure for this project is projected to stand at approximately $100 million, with funds sourced directly from the committed loan arrangements and strategic financial planning.

The Double E Pipeline venture has already made strides by placing an order for long-lead gas turbine compression units essential for the project, thus securing manufacturing timelines to meet the expected in-service date. Approval from the Federal Energy Regulatory Commission (FERC) and other regulatory entities is still pending as the project progresses.

About Double E Pipeline

Double E spans 135 miles as an FERC-regulated interstate natural gas transmission line, which began operations in November 2021. Its role involves providing transportation services from key receipt points in the Delaware Basin to delivery points around the Waha Hub in Texas. The joint venture comprises subsidiaries of Summit Midstream Corporation with a controlling interest of 70%, alongside ExxonMobil, which holds the remaining 30%. Summit Midstream Infrastructure Management oversees the operation of Double E.

Summit Midstream Corporation continues to solidify its reputation as a leading player in providing midstream energy infrastructure across the continental United States. With a robust focus on developing strategic assets in key resource basins, this latest pipeline expansion is poised to enhance both capacity and the reliability of energy delivery across critical markets.