Kinder Morgan (KM) has announced plans to build a $2 billion (€1.7 billion) natural gas pipeline, co-publishing a letter of intent with EagleClaw Midstream Ventures, Blackstone Energy Partners and Apache Corporation.
As part of the Permian Highway Pipeline project, the proposed route will start at Permian Basin and carry natural gas to growing markets along the Texas Gulf Coast. An estimated 2 billion cubic feet of gas will be transported via the pipeline daily.
Sital Mody, Chief Commercial Officer of Kinder Morgan Natural Gas Midstream explains: “the PHP Project is structured to provide unrivalled market optionality for Permian producers. By contracting for space on KM’s extensive intrastate systems, the project will offer seamless nominations to the Katy and Agua Dulce market hubs; pipeline headers into LNG export facilities on the Texas Gulf Coast; multiple pipelines delivering gas into Mexico, including Valley Crossing, NET Mexico, and KMI’s Border and Monterrey pipelines; and numerous other intrastate and interstate pipelines. Additionally, shippers on the project will be able to contract for additional transportation, storage and gas sales options with KMI, whose existing intrastate systems are directly connected to most end users along the Texas Gulf Coast.”
If approved, production on the pipeline will begin in late 2020 and cover a total route of 430 miles.
Bob Milam, CEO of EagleClaw adds: “EagleClaw has been in extensive discussions with pipeline operators and customers on the need for further downstream connectivity out of the Waha area for the ever-increasing volumes of associated gas. We have evaluated many different pipeline options over the last 18 months, and we believe that this project has the best and broadest end-market options that will maximize overall net-back value and end-market flexibility for our customers.”
The letter of intent follows Kinder Morgan’s recent decision to abandon plans for a Trans Mountain pipeline expansion, eventually selling the existing route to the Canadian Government for £3.5 billion (€3 billion).