Sept. 06–Houston’sKinder Morgan and Midland-based EagleClaw Midstream said they’ve authorized the proposed $2 billion Permian Highway Pipeline project to transport natural gas from West Texas to Houston and other hubs.
The project is part of the race to build gas and oil pipelines from the booming Permian Basin to refining and port hubs near Houston and Corpus Christi. Permian production is currently stalling from pipeline shortages to carry the oil and gas out of rural and landlocked West Texas.
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The 430-mile Kinder Morgan project is backed by customer support from Exxon Mobil 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 West Texas’Pecos County to Katy near Houston. From Katy, the natural gas could flow to U.S. 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, 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,” said EagleClaw President Jamie Welch.
Some of the main uses of the Permian Highway Pipeline are to supply gas for electricity generation in Texas and Mexico and for new liquefied natural gas export complexes under construction in Freeport and Corpus Christi.
Kinder Morgan just proposed the project in June in the new partnership with EagleClaw, a private firm that’s financially backed by the New York private equity giant Blackstone Group.
Earlier this week, EagleClaw said it’s buying another Permian pipeline company, Humble-based Caprock Midstream, for $950 million to expand its West Texas footprint.
Back to Kinder Morgan, the Houston firm already is leading the construction of the $1.7 billion Gulf Coast Express Pipeline that would stretch farther south from 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’sPlains All American Pipeline to construct a multibillion-dollar pipeline stretching from west of Midland to the Houston and Beaumont areas that would carry oil and condensate.
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