Kinder Morgan, EagleClaw move forward on Permian gas pipeline in Texas

Kinder Morgan Texas Pipeline (KMTP) and EagleClaw Midstream Ventures announced plans Wednesday to proceed with the Permian Highway Pipeline Project, a 430-mile pipeline proposed in Texas.

The two organizations signed a definitive joint venture agreement whereby each will have a 50 percent ownership interest in the project. That may vary, however, depending on the outcome of ownership options held by anchor shippers. The partners have already secured transportation agreements with shippers, including EagleClaw, Apache Corporation, and XTO Energy. Apache will have the option to acquire equity from the initial partners.

KMTP will build and operate the pipeline, which is estimated to cost approximately $2 billion. The pipeline will bring natural gas from the Permian Basin to the areas along the Texas Gulf Coast. It is designed to transport up to 2 billion cubic feet per day of natural gas through approximately 430 miles of 42-inch pipeline from the Waha to Katy, Texas, areas.

“We are very pleased to have reached this important milestone and to have secured the commitments required for all parties to proceed,” Sital Mody, president of Kinder Morgan Natural Gas Midstream, said. “With a route identified and the project nearly fully subscribed, we expect to begin stakeholder outreach, environmental surveys, and right-of-way activities in the coming months.”

The pipeline is expected to be operational in 2020.

“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,” Jamie Welch, president and CEO of EagleClaw, said.