Natural gas pipeline connecting Permian Basin to Rockies Express eyes late-2028 start

Tallgrass Energy has secured anchor shipper precedent agreements for a greenfield natural gas pipeline from the Permian Basin to the Rockies Express Pipeline, the company said May 13.

Tallgrass did not give specific details on the pipeline's route but said it would deliver gas to REX "and other points of delivery." It would have a target in-service date in late 2028.

While the current agreements are "sufficient to financially justify construction of the pipeline project, subject to customary regulatory and corporate conditions and approvals," Tallgrass plans to launch another open season for more shippers. The pipeline "is designed to be capable of up to 2.4 Bcf/d of natural gas transportation, with the ultimate capacity to be determined depending on the level of shipper commitments from the open season."

Tallgrass said the project will enable gas "to access markets across the US" and that it will "strengthen and reinforce local communities across the Rockies, Great Plains, and Midwest."

REX tends to flow gas from the Rockies to the Midcontinent, although flows can change during winter months. Net throughput from Colorado to Nebraska has averaged 1.1 Bcf/d so far in May, S&P Global Commodity Insights data showed May 13. Monthly net flows last reversed in January 2024, when Colorado received a net 210 MMcf/d from Nebraska on REX.

Tallgrass system

"Considering that the tie-in would be closer to the Western end of REX, I would believe that they are targeting power generation demand centers across the Plains and into the Midwest," Commodity Insights gas analyst Luke Larsen said.

The company would also likely be able to utilize Tallgrass Interstate Gas Transmission to send gas east, Larsen said, adding that TIGT spans Wyoming, Nebraska, Colorado and Kansas.

By creating a link to the Permian on its system, Tallgrass would be able to replace falling Rockies production, Larsen said. Unlike the Permian, Rockies production has been trending lower. It has averaged 8.1 Bcf/d so far in 2025, around 2.3 Bcf/d, or 22%, lower than production in 2015, Commodity Insights data showed.

Production in the region is expected to trend lower into the late 2030s, according to a Commodity Insights long-term outlook released in February 2025.

Tallgrass would also have the option to send gas west on the Ruby pipeline via the Overthrust Pipeline, putting Permian gas in competition with gas from Western Canada, Larsen said.

Permian egress

The Permian is set for a surge in natural gas egress capacity in 2026, as two greenfield pipelines and one brownfield expansion are due to start service. An expansion of Gulf Coast Express will add 570 MMcf/d of capacity to Agua Dulce, while the Blackcomb Pipeline will add up to 2.5 Bcf/d in the same direction. Energy Transfer's 1.5 Bcf/d Hugh Brinson Pipeline will send gas east toward the Dallas area.

Despite this surge, there will be "a need for additional egress by early 2029," Commodity Insights analyst Nikolay Filchev said.

Midstream companies have focused on Texas intrastate projects for Permian egress in recent years. In addition to three projects adding capacity in 2026, other recent egress pipes like Matterhorn Express, Whistler and Permian Highway Pipeline have stayed within state lines, avoiding the US Federal Energy Regulatory Commission certificate process.

Another interstate project, DeLa Express, is currently in FERC's prefiling process but has faced some delays. Moss Lake Partners originally aimed to submit its application for a Section 7 certificate by February 2025, with a view to starting service in mid-2028. The company now expects to file its Section 7 application in the fourth quarter of 2025, it said April 15 in a monthly update to FERC (PF24-4).

DeLa Express "is in the process of revising its proposed schedule," it said in the April 15 update. The project is considering some reroutes that have been suggested during the prefiling process and "anticipates being able to provide another comprehensive update and summary of changes in mid to late Q2 2025."

DeLa Express would transport liquids-rich gas from Winkler County, Texas, to Calcasieu Parish, Louisiana, targeting NGLs and LNG export markets.