Kinder Morgan Permian pipeline advances
Houston company, partner to go ahead with $2 billion project
The Houston pipeline company Kinder Morgan and its partner said they will move forward with proposed $2 billion Permian Highway Pipeline project to transport natural gas from West Texas to Houston and other hubs.
The project, a joint venture of Kinder Morgan and EagleClaw Midstream of Midland, is part of the race to build gas and oil pipelines from the booming Permian Basin to refineries, chemical companies and export terminals along the Gulf Coast. Permian production has stalled because of pipeline shortages to carry the oil and gas from the remote region to markets.
The 430-mile Kinder Morgan project is backed by customer commitments from Exxon Mobil Corp. and Houston-based Apache Corp., which also has the option of buying a one-third stake in the pipeline through its proposed spinoff company, Altus Midstream. For now, Kinder Morgan and EagleClaw are 50-50 partners.
The 42-inch pipeline is slated for completion by the end of 2020 and would stretch from Waha in Pecos County to Katy.
From Katy, the natural gas could flow to Gulf Coast and Mexican markets via existing pipelines. The project is designed to transport 2 billion cubic feet of natural gas per day.
“With the continued growth in drilling activity in the Permian Basin,” EagleClaw President Jamie Welch said, “this project will help to provide key infrastructure for producers to move natural gas to the best premium markets along the Gulf Coast and South Texas.”
The Permian Highway Pipeline would supply gas to electricity generators in Texas and Mexico
and liquefied natural gas export complexes under construction in Freeport and Corpus Christi.
Kinder Morgan proposed the project in June with EagleClaw, a private firm backed by the New York private equity giant Blackstone Group.
Earlier this week, EagleClaw said it was buying another Permian pipeline company, Caprock Midstream of Humble, for $950 million to expand its West Texas footprint.
Kinder Morgan also is leading the construction of the $1.7 billion Gulf Coast Express Pipeline that would carry natural gas from south of the Permian to just west of Corpus Christi in Agua Dulce. Apache also is an anchor customer on that project, slated for completion in fall 2019.
As for crude oil, Exxon Mobil said in June it plans to create a joint venture with Houston’s Plains All American Pipeline to construct a multibillion-dollar pipeline stretching from west of Midland to the Houston and Beaumont areas.
In addition to crude, the pipeline would carry condensate, a very light and volatile oil.