Is ONE Gas’ US$120 Million Hugo Pipeline Deal Altering The Investment Case For OGS?

• On December 18, 2025, ONE Gas, Inc. announced a joint infrastructure initiative involving a US$150–US$160 million, 43‑mile natural gas pipeline to deliver over 100 billion cubic feet annually to Western Farmers Electric Cooperative’s Hugo Plant in southeast Oklahoma, with completion targeted for the third quarter of 2028.
• The project, with ONE Gas investing about US$120 million to underpin 400 megawatts of gas‑fueled generation by 2029, highlights how regulated utilities can use long‑term infrastructure partnerships to support regional economic growth and energy reliability.
• We’ll now examine how ONE Gas’s US$120 million pipeline commitment to supply the Hugo Plant could reshape its investment narrative.

Rare earth metals are the new gold rush. Find out which 35 stocks are leading the charge.

ONE Gas Investment Narrative Recap

To own ONE Gas, you generally have to believe in steady, regulated returns from essential gas infrastructure across its three core states, even as long term decarbonization pressures build. The Hugo pipeline announcement looks additive but not transformational near term, with the key short term swing factor still being how effectively regulators allow cost recovery on rising capital and operating spending.

The most relevant recent announcement here is ONE Gas’s reaffirmed 2025 earnings guidance, which points to gradual profit growth while capital needs stay high. Set against the US$120 million Hugo commitment, it frames the project as part of a wider capex cycle that could support earnings if regulation remains constructive, or tighten free cash flow if it does not.

Yet, against this steady story, investors still need to be aware that sustained high capital expenditure could...

Read the full narrative on ONE Gas (it's free!)

ONE Gas' narrative projects $2.6 billion revenue and $322.7 million earnings by 2028. This requires 3.5% yearly revenue growth and about a $75 million earnings increase from $247.7 million today.

Uncover how ONE Gas' forecasts yield a $86.07 fair value, a 9% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community currently has 1 fair value estimate clustered at about US$73.92 per share, showing how a single view can differ from market pricing. You can weigh that against the risk that ONE Gas’s rising capital needs, including the Hugo pipeline and other system projects, may pressure cash flows if regulators do not fully support cost recovery.

Explore another fair value estimate on ONE Gas - why the stock might be worth as much as $73.92!

Build Your Own ONE Gas Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your ONE Gas research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free ONE Gas research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ONE Gas' overall financial health at a glance.

Seeking Other Investments?

Opportunities like this don't last. These are today's most promising picks. Check them out now:

• Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.
• This technology could replace computers: discover 28 stocks that are working to make quantum computing a reality.
• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com