Kinder Morgan Texas Pipeline, EagleClaw Midstream Ventures and Apache Corporation plan to develop the Permian Highway Pipeline Project for the region’s growing natural gas production.
The consortium of companies have signed a letter of intent for the project which will provide an outlet for increased natural gas production for the Permian Basin to growing market areas along the Texas Gulf Coast.
The $2 billion project is designed to transport up to 2 billion cubic feet per day of natural gas through 430 miles of 42-inch pipeline from the Waha, Texas area to the US Gulf Coast and Mexico markets.
The project is expected to be in service in late 2020. Natural gas supply will be sourced into the project from multiple locations, including KMI’s, EagleClaw’s and Apache’s existing systems in the Permian Basin, with additional interconnections to both intrastate and interstate pipeline systems in the Waha area.
Kinder Morgan and EagleClaw will be the initial partners, with 50% ownership each, and Apache will have an option to acquire up to 33% equity in the project from the initial partners.
Apache and EagleClaw will be significant shippers on the proposed pipeline, with Apache planning to commit up to 500,000 dekatherms per day. Kinder Morgan will build and operate the pipeline.
Sital Mody, CCO of Kinder Morgan Natural Gas Midstream, says: ‘The project is structured to provide unrivalled market optionality for Permian producers.
‘By contracting for space on KMI’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.