JV signs letter of intent for proposed US$2 billion pipeline

A joint venture (JV) has signed a letter of intent for a new US$2 billion pipeline to transport natural gas from Waha, Texas to the US Gulf Coast and Mexico.

The Kinder Morgan Texas Pipeline, EagleClaw Midstream Ventures and Apache Corporation JV announced on 25 June that it had signed the letter to develop the Permian Highway Pipeline Project, a proposed 692 km, 42 inch (1,067 mm) pipeline capable of transporting 28.3 million m3 of gas per day.

Product would be sourced from multiple locations, including the JV’s existing pipeline infrastructure in the Permian Basin, as well as other systems in the Waha area.

“The PHP Project is structured to provide unrivalled market optionality for Permian producers,” said Kinder Morgan Natural Gas Midstream Chief Commercial Officer Sital Mody.

“By contracting for space on Kinder Morgan’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 Kinder Morgan’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 Kinder Morgan, whose existing intrastate systems are directly connected to most end users along the Texas Gulf Coast.”

Kinder Morgan and EagleClaw will be the initial partners, with a 50 per cent ownership each, while Apache, who has been jointly developing the proposed project, has the option to acquire up to 33 per cent; Kinder Morgan will build the pipeline.

Kinder Morgan also said that given the level of producer inquiry, the company was also evaluating the economic and hydraulic feasibility of a 48 inch (1,219 mm) pipeline with increased transportation capacity.

The pipeline is expected to be in service in late 2020, subject to definitive agreements and construction permits.

For more information visit the Kinder Morgan website.

If you have a project you would like featured in Pipelines International contact Assistant Editor Chloe Jenkins at cjenkins@gs-press.com.au

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