Above: Marathon Petroleum Corp. is among the oil and gas producers to continue investing in capacity over the next few years. Shown, LNG export terminal, Kitimat, British Columbia
February, 2026- Big oil and natural gas companies let investors and other stakeholders know when they are ready to pull the trigger and put their earnings to work.
In December, Chevron Corp. said it expects to spend at least $18 billion during 2026, including $10.5 billion in the United States.
Nearly $6 billion is expected for U.S. shale and tight assets that include Permian, DJ and Bakken fields, underpinning anticipated U.S. production of more than 2 million barrels of oil equivalent per day. Global offshore capex is expected to be $7 billion, primarily supporting growth in Guyana, the Eastern Mediterranean region and the Gulf of Mexico.
Marathon Petroleum’s Los Angeles Refinery.
Dallas-based Energy Transfer LP plans to expand its Transwestern Pipeline to increase the supply of natural gas to markets throughout Arizona and New Mexico from its asset base in the Permian Basin. The company says that the Transwestern Desert Southwest pipeline expansion will provide reliable economic supplies of natural gas to support the long-term energy needs for utilities and energy providers in the region driven by population growth, high-tech industry demand and data center expansion.
The Desert Southwest pipeline expansion project consists of 516 miles of 42-inch diameter pipeline and nine compressor stations in Arizona, New Mexico and Texas. The design capacity of the pipeline is 1.5 billion cubic feet per day. The $5.3 billion project is expected to be in service by the fourth quarter of 2029.
Energy Transfer stated that the project “promotes American industry [in part] by prioritizing U.S. steel pipe manufacturers.”
In November, Calgary-based Enbridge Inc. reached a final investment decision on its Mainline Optimization Phase 1 project. This phase will add capacity to the company’s Mainline network and Flanagan South Pipeline (FSP) to meet customer demand for incremental egress, increasing deliveries of Canadian heavy oil to key refining markets in the U.S. Midwest (PADD II) and Gulf Coast (PADD III). The additional capacity should be available in 2027.
In September, BP allocated $5 billion on the Tiber-Guadalupe project in the Gulf of Mexico, approving its second new production platform in less than two years in the region and further underscoring the significance of the U.S. Gulf to its global strategy.
The Tiber-Guadalupe will be BP’s seventh oil and gas production hub in the Gulf, featuring a new floating production platform with the capacity to produce 80,000 barrels of crude oil per day. Production is expected to start in 2030.
ExxonMobil said Nov. 20 that it is increasing the capacity of the Enterprise Products Bahia Natural Gas Liquids (NGL) pipeline by 400,000 barrels per day, boosting total throughput to 1 million barrels per day. The company did not provide a cost estimate for this expansion.
The investment includes an extension to connect NGL production from ExxonMobil’s Cowboy Central Delivery Point in Eddy County, New Mexico. The Cowboy Connector Pipeline connects ExxonMobil’s growing production in the Permian Basin to U.S. Gulf Coast refining and chemical facilities, and enables access to export logistics to serve global markets.
ConocoPhillips, in its third-quarter 2025 earnings report, updated capital guidance for its Willow project in Alaska to be between $8.5 billion and $9 billion, primarily due to general inflation and localized North Slope and marine cost escalation. Willow was near 50 percent completion, and the company expects first oil in early 2029.
RISKS AND OPPORTUNITIES
In an article published Dec. 8, commodities analysts at the Netherlands-based bank ING stated, “We continue to hold onto our bearish outlook for the oil market in 2026.” They also cited “clear supply risks hanging over the market.”
The bank predicts that oil market surpluses are set to rise in 2026, following OPEC+’s decision to unwind supply cuts at a quicker-than-expected pace.” Non-OPEC supply is also expected to grow at a healthy clip despite price weakness during 2025.
“Global oil stocks should continue to build through the year, keeping downward pressure on prices. We forecast that ICE Brent will average $57 per barrel over the year, with the key assumption being that Russian oil flows continue unabated despite U.S. sanctions on Rosneft and Lukoil.”
If sanctions (levied as a result of Russia’s war on Ukraine) prove more effective than the market expects, that “leaves upside for oil prices. However, Russia has managed to keep oil flowing since 2022 despite sanctions and embargoes,” as exporters use intermediaries and provide large discounts for buyers.
ING analysts said that despite the oil rig count in the U.S. falling 15 percent during 2025, crude oil production continued to hit record highs. “However, given the current low prices and the outlook under pressure, we expect U.S. crude oil production will start to soften.”
If the West Texas Intermediate bench price consistently stays below $60 per barrel, that “leaves room for larger declines in 2027 production.” The report cited a Dallas Federal Reserve Bank energy survey that found “producers need, on average, $65 a barrel to profitably drill a new well. This is above where the entire WTI for - ward curve is trading.”
Tenaris is building a new rail spur in Midland, Texas, and restarting heat treatment and finishing operations in Koppel, Pennsylvania.
UPGRADES
Industry invests in rolling and processing capacity as energy demand is projected to grow
Since late summer 2025, at least four major pipe and tube producers operating in the United States announced significant investments in their capacity to make or process products bound for the energy sector. In addition, three North American steel producers that roll pipe and tube, among other products, have merged, the impacts of which are yet to be felt in the domestic steel sector more broadly.
PIPELINE INFRASTRUCTURE
Welspun Tubular LLC is spending $150 million to build a longitudinally submerged arc welded (LSAW) line pipe mill and coat - ing facility at its existing site in Little Rock, Arkansas.
Welspun Corp Ltd. Managing Director and CEO Vipul Mathur explained, “As global energy demand continues to evolve, this expansion will enable us to offer a comprehensive pipeline solution for our customers, addressing the increasing demand in U.S. energy infrastructure.”
He claimed that Welspun Little Rock will be the only facility in the United States capable of manufacturing line pipes ranging from 6 inches to 56 inches, meeting the “complete specifications required for both the oil and gas and infrastructure sectors.”
The company expects to hire up to 300 people to operate the new LSAW line.
In October 2024, Welspun pledged to invest $100 million to expand and upgrade its high frequency induction welded (HFIW) pipe manufacturing facility in Little Rock. This expansion, to be completed during first quarter, will create 175 jobs.
ExxonMobil gas project in the Permian Basin. ExxonMobil gas project in the Permian Basin.
THREADING LINES
Vallourec, whose North American head - quarters are in Houston, pledged Nov. 10 to invest $48 million to expand its operations in Youngstown, Ohio. The company will build a new premium threading line within its existing steelmaking, rolling and finishing operations.
“This addition will offer a competitive, fully integrated domestic manufacturing route and strengthen Vallourec’s position in the oil country tubular goods (OCTG) market in the U.S.,” the company stated.
This new line will increase capacity to thread VAM high-torque connections, which are increasingly used in onshore wells with long laterals.
Construction is expected to be completed by early 2027, with no disruption to current operations. Vallourec expects to hire up to 40 full-time employees to operate the threading line.
Philippe Guillemot, group chairman and CEO of Vallourec, said, “This expansion reflects Vallourec’s long-term vision and continued investment in the U.S. market. By strengthening our industrial base in Youngstown, we are building on the region’s manufacturing legacy and supporting all energies with high-performance, locally produced solutions.”
U.S. Steel Corp. will also install a premium thread line this year at its Fairfield Tubular Operations in Alabama. This project, expected to cost $75 million, is part of a larger capital deployment strategy in partnership with Nippon Steel.
Products from Fairfield Tubular Operations primarily serve the energy sector, including oil and gas customers.
“We’re strengthening our ability to deliver high-quality, American-made tubular products with greater efficiency and reliability,” said Scott Dorn, senior vice president, tubular solutions, for U.S. Steel.
ExxonMobil’s oil and gas production in the Permian Basin is expected to surpass 800,000 barrels per day in 2027.
TRANSPORTATION
Tenaris is building a new rail spur in Midland, Texas. The new section of railroad will directly connect the company’s yard with the Union Pacific railway, allowing pipe to be safely unloaded by rail. Construction on the rail spur is planned to start in early 2026 with its completion forecasted later the same year.
The $12.5 million investment will allow nearly one third of the yard’s volume to be received by rail, increasing efficiency, reducing cost and minimizing the number of trucks on the road for safer operations and decreased carbon emissions.
“Our Midland service center is the heart of our operations in the Permian Basin,” according to Tenaris U.S. President Guillermo Moreno. “Since its opening, we have only seen its potential grow, now serving as Tenaris’s largest pipe yard worldwide.”
Tenaris said that its Midland service center has been key “to consolidating the Rig Direct mill-to-well service model in the U.S., enabling the company to partner with oil and gas operators of all sizes to support their drilling projects through an integrated service framework that fosters collaboration.”
MERGER
At the end of July 2025, Atlas Holdings formed a new entity, Orion Steel Companies, upon completing its acquisition of Evraz North America. Evraz, with operations in the U.S. and Canada, makes steel for rail, energy, infrastructure and industrial end markets.
Orion Steel also owns and operates Rocky Mountain Steel Mills in Pueblo, Colorado; Oregon Steel Mills in Portland; and Interpro Pipe and Steel in Regina, Saskatchewan, and locations across Alberta, Canada.
Collectively, Orion employs 3,400 people who run two EAF melt shops, 12 rolling mills and 17 recycling facilities. The company can produce up to 2.3 million tons of raw steel and 3.5 million tons of finished steel, including pipe and tubing products.
