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Will Permian Gas Demand Unlock Stronger Long-Term Growth for EPD?
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Key Takeaways
EPD sees Permian natural gas and NGL production growing 34% through 2030, up from its prior 23% forecast.
EPD's Permian gas processing volumes rose 12% to a record 4.6 Bcf/d in Q3 2026, reflecting strong demand.
EPD's $6.3B growth project targets rising gas and NGL volumes through new plants and pipeline expansions.
Enterprise Products Partners L.P.EPD is well-positioned to benefit from rising natural gas production in the Permian Basin, which is expected to drive demand for its gathering, processing and transportation infrastructure. During its third-quarter 2026 earnings call, management raised its forecast for Permian natural gas and natural gas liquids (“NGL”) production growth between 2025 and 2030 to 34%, up from its previous projection of 23%. The revised outlook reflects higher gas-to-oil ratios in the basin, indicating that producers are extracting more natural gas alongside crude oil, thereby creating growth opportunities for EPD's midstream operations.
The leading North American midstream energy player is benefiting from this trend, with its Permian natural gas processing inlet volumes increased 12% year over year to a record 4.6 billion cubic feet per day (Bcf/d) in the third quarter of 2026. Enterprise Products' Permian processing volumes have recorded a three-year compound annual growth rate of 19%, reflecting sustained demand for its infrastructure.
To handle rising volumes, the partnership plans to commission its Athena processing plant, with a capacity of 300 million cubic feet per day (MMcf/d), in the fourth quarter of 2026, bringing its total Permian processing capacity to nearly 5 Bcf/d. Management indicated that going forward, the stronger production outlook supports the addition of nearly two processing plants annually, with several new facilities scheduled to enter service through early 2029.
Beyond natural gas processing, rising Permian production is expected to generate additional NGL volumes, supporting higher utilization of EPD's integrated pipelines, fractionation facilities, storage assets and export terminals. The partnership's $6.3 billion portfolio of major growth projects under construction, including new processing plants, the Bahia NGL Pipeline expansion and additional fractionation capacity, is designed to accommodate these growing volumes. With rising Permian gas supplies and continued infrastructure expansion, EPD is well-positioned to strengthen its long-term earnings and cash flow, although the pace of growth will depend on production trends and timely project execution.
Permian Gas Growth Benefits TRGP & ET
Rising natural gas production in the Permian Basin is creating growth opportunities for other major midstream energy players, including Targa Resources Corp. (TRGP - Free Report) and Energy Transfer LP (ET - Free Report) .
Targa Resources is benefiting from increasing natural gas production in the Permian Basin, as its gas volumes rose by more than 900 MMcf/d year over year in the third quarter of 2026. During its latest earnings call, management indicated that Permian volume growth in 2027 is expected to remain similar to 2026 levels, supported by customer activity and new commercial agreements. TRGP announced plans to advance additional processing plants in the Midland and Delaware Basins, strengthening its ability to handle growing natural gas production. These developments position Targa Resources for continued double-digit Permian volume growth over the coming years.
Energy Transfer is expanding its Permian natural gas infrastructure to capitalize on increasing production and transportation requirements. In its latest earnings call, management highlighted that Permian processing volumes rose about 8%, supported by new facilities and improved plant utilization. ET commissioned its Mustang Draw II processing plant in October and approved the Bear II plant, which is expected to add 200 MMcf/d of processing capacity by the third quarter of 2027. The company expects the second phase of its Hugh Brinson Pipeline to enter service in the first quarter of 2027, increasing transportation capacity to more than 2.3 Bcf/d and supporting natural gas flows from the Permian Basin.
EPD’s Price Performance, Valuation & Estimates
Enterprise Products shares have gained 18.1% over the past year compared with the industry’s 60.8% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, EPD trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 10.35X. This is lower than the broader industry average of 12.77X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD's fourth-quarter 2026 and full-year 2026 earnings has seen downward revisions over the past seven days. Meanwhile, estimates for first-quarter 2027 earnings have remained constant.
View the Zacks #1 Rank List
Image: Bigstock
Will Permian Gas Demand Unlock Stronger Long-Term Growth for EPD?
Key Takeaways
Enterprise Products Partners L.P. EPD is well-positioned to benefit from rising natural gas production in the Permian Basin, which is expected to drive demand for its gathering, processing and transportation infrastructure. During its third-quarter 2026 earnings call, management raised its forecast for Permian natural gas and natural gas liquids (“NGL”) production growth between 2025 and 2030 to 34%, up from its previous projection of 23%. The revised outlook reflects higher gas-to-oil ratios in the basin, indicating that producers are extracting more natural gas alongside crude oil, thereby creating growth opportunities for EPD's midstream operations.
The leading North American midstream energy player is benefiting from this trend, with its Permian natural gas processing inlet volumes increased 12% year over year to a record 4.6 billion cubic feet per day (Bcf/d) in the third quarter of 2026. Enterprise Products' Permian processing volumes have recorded a three-year compound annual growth rate of 19%, reflecting sustained demand for its infrastructure.
To handle rising volumes, the partnership plans to commission its Athena processing plant, with a capacity of 300 million cubic feet per day (MMcf/d), in the fourth quarter of 2026, bringing its total Permian processing capacity to nearly 5 Bcf/d. Management indicated that going forward, the stronger production outlook supports the addition of nearly two processing plants annually, with several new facilities scheduled to enter service through early 2029.
Beyond natural gas processing, rising Permian production is expected to generate additional NGL volumes, supporting higher utilization of EPD's integrated pipelines, fractionation facilities, storage assets and export terminals. The partnership's $6.3 billion portfolio of major growth projects under construction, including new processing plants, the Bahia NGL Pipeline expansion and additional fractionation capacity, is designed to accommodate these growing volumes. With rising Permian gas supplies and continued infrastructure expansion, EPD is well-positioned to strengthen its long-term earnings and cash flow, although the pace of growth will depend on production trends and timely project execution.
Permian Gas Growth Benefits TRGP & ET
Rising natural gas production in the Permian Basin is creating growth opportunities for other major midstream energy players, including Targa Resources Corp. (TRGP - Free Report) and Energy Transfer LP (ET - Free Report) .
Targa Resources is benefiting from increasing natural gas production in the Permian Basin, as its gas volumes rose by more than 900 MMcf/d year over year in the third quarter of 2026. During its latest earnings call, management indicated that Permian volume growth in 2027 is expected to remain similar to 2026 levels, supported by customer activity and new commercial agreements. TRGP announced plans to advance additional processing plants in the Midland and Delaware Basins, strengthening its ability to handle growing natural gas production. These developments position Targa Resources for continued double-digit Permian volume growth over the coming years.
Energy Transfer is expanding its Permian natural gas infrastructure to capitalize on increasing production and transportation requirements. In its latest earnings call, management highlighted that Permian processing volumes rose about 8%, supported by new facilities and improved plant utilization. ET commissioned its Mustang Draw II processing plant in October and approved the Bear II plant, which is expected to add 200 MMcf/d of processing capacity by the third quarter of 2027. The company expects the second phase of its Hugh Brinson Pipeline to enter service in the first quarter of 2027, increasing transportation capacity to more than 2.3 Bcf/d and supporting natural gas flows from the Permian Basin.
EPD’s Price Performance, Valuation & Estimates
Enterprise Products shares have gained 18.1% over the past year compared with the industry’s 60.8% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, EPD trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 10.35X. This is lower than the broader industry average of 12.77X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD's fourth-quarter 2026 and full-year 2026 earnings has seen downward revisions over the past seven days. Meanwhile, estimates for first-quarter 2027 earnings have remained constant.
Image Source: Zacks Investment Research
EPD currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.