On October 21, Kinder Morgan said Natural Gas Pipeline Company of America (NGPL) reached a final investment decision on its Permian Link project, an approximately $4.2 billion, roughly 434-mile line backed by long-term take-or-pay contracts to serve new power generation for an A-rated hyperscaler.
Published in Brief No. 5 · · Also on LinkedIn ↗
Reviewed by Georges C. Nama, Esq., licensed by the Supreme Court of Texas.
On October 21, 2026, Kinder Morgan announced in its third-quarter 2026 earnings release that Natural Gas Pipeline Company of America (NGPL), one of its equity investments, had reached a final investment decision on the Permian Link Project. According to the release, the project is designed to provide approximately 2.8 billion cubic feet per day (Bcf/d) of natural gas transportation capacity through approximately 434 miles of new pipeline, with related compression, metering and interconnect facilities. The total cost is estimated at approximately $4.2 billion, of which Kinder Morgan’s share is approximately $1.6 billion. The company said the project will serve new power generation for an A-rated hyperscaler, which it did not name, and is supported by long-term, take-or-pay transportation agreements. Subject to the timely receipt of required permits and approvals, Permian Link is expected to enter service in the third quarter of 2030. Kinder Morgan said its expansion project backlog rose to $14.4 billion.
The project shows that Permian gas takeaway can now be underwritten by power demand tied to hyperscalers, the large cloud and data-center operators, not only by producers and LNG buyers. When a pipeline is underwritten by long-term take-or-pay agreements, much of the volume risk shifts to the shippers, which generally pay for reserved capacity whether or not they use it. For producers, gas marketers and power developers, this suggests that capacity on new Permian lines may be committed years in advance, making the timing of negotiations and the terms of precedent agreements, credit support and in-service-date provisions central to any deal.
What it means for U.S. companies
U.S. companies that buy, sell or move Permian gas should expect that new takeaway capacity may be committed under long-term contracts tied to large, creditworthy power buyers well before construction begins. Producers seeking firm capacity, power developers sourcing fuel supply, and data-center operators negotiating energy arrangements may benefit from reviewing transportation agreements carefully, including reservation charges, term, assignment rights, credit requirements and remedies if a project’s in-service date slips past its expected 2030 target.
Related reading
Our oil, gas and energy practice page explains how we draft and review joint operating agreements, farmouts, drilling and gas sales contracts, and host government agreements for U.S. companies and investors. Our Africa–U.S. transactions page covers deal structuring, due diligence and cross-border compliance, including the U.S. Foreign Corrupt Practices Act. Before you sign, read 5 Mistakes That Sink Africa–U.S. Deals (and How to Avoid Them), and find every item of that edition in the Oil & Gas Intelligence Brief.
Sources: Kinder Morgan (SEC Form 8-K, Exhibit 99.1) ↗ · Oil & Gas Journal ↗ · Pipeline & Gas Journal ↗
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The Oil & Gas Intelligence Brief summarizes publicly available information and links to its sources. It is general information, not legal advice, and reading it does not create an attorney-client relationship. Facts can change after publication; always check the official source.
