Energy Transfer Approves $1.6 Billion Gas Pipe as AI Use Soars

(Bloomberg) -- Energy Transfer LP formally committed to building a $1.6 billion pipeline that will move natural gas from eastern Louisiana across Mississippi, a move that comes as data centers and export terminals boost demand for the fuel.

The 215-mile (346-kilometer) South Mississippi Pipeline project will have the capacity to ship as much as 1.2 billion cubic feet of gas per day, the company said in a statement Tuesday. Energy Transfer expects to operate the project and own 51%, with the rest of the stake coming from customers.

The project will "give shippers greater access to natural gas from multiple basins across the southeastern US," according to the statement.

Energy Transfer and other pipeline operators are rushing to put gas conduits into service as consumption of the fuel soars, driven by liquefied natural gas export terminals along the Gulf Coast and new power plants serving AI data centers. The infrastructure boom is stoking concern that the data center buildout will undo 15 years worth of greenhouse gas reductions from US electricity generation.

The Dallas-based company's shares rose 0.8% before the start of regular trading in New York.

Energy Transfer is holding a binding open season for additional customer commitments to the project, which is set to end Nov. 25. The pipeline is expected to start up in 2030.

Energy Transfer also added equipment to boost gas flows on its Rover Pipeline system in the Midwest, which the expansion coming online Nov. 1, according to the statement. It also entered into two agreements to provide 150,000 million British thermal units per day of gas transportation to two power plants under construction in Missouri.