Kinder Morgan Texas Pipeline LLC, a subsidiary of Kinder Morgan, Inc. and EagleClaw Midstream Ventures, LLC a portfolio company of Blackstone Energy Partners, have announced a final investment decision to proceed with the Permian Highway pipeline project (PHP project) after having executed definitive joint venture agreements and having secured sufficient firm transportation agreements with shippers.
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Nearly all capacity available on the system is subscribed and committed under long-term, binding transportation agreements. The remaining capacity is expected to be awarded shortly.
Shippers that have committed to the project include EagleClaw, Apache Corporation (Apache), and XTO Energy Inc., a subsidiary of Exxon Mobil Corporation, amongst others. As previously announced, KMTP and EagleClaw will be the initial partners, each with a 50% ownership interest in the project. KMTP will build and operate the pipeline.Apache will have the option to acquire equity from the initial partners and has announced its intent to assign that option to Altus Midstream, a new company announced by Apache and Kayne Anderson Acquisition Corp. on 8 August, 2018. KMI’s and EagleClaw’s ultimate ownership interest may vary between approximately 27% and 50%, depending on the outcome of ownership options held by anchor shippers.
The PHP project is expected to be in service in late 2020, assuming timely receipt of the requisite regulatory approvals.
“We are very pleased to have reached this important milestone and to have secured the commitments required for all parties to proceed,” said Sital Mody, President of Kinder Morgan Natural Gas Midstream. “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.”
“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 Jamie Welch, President and Chief Financial Officer of EagleClaw.
David Foley, Chief Executive Officer of Blackstone Energy Partners, added, “We are delighted to partner with Kinder Morgan and Apache to support a project that will meet the growing infrastructure needs of Permian Basin producers, support the continued growth of the US economy and create jobs for American workers.”
“We are excited to see the Permian Highway Pipeline move forward. This is a tremendous project with strong partners that will provide us with additional access to key natural gas markets,” said Brian Freed, Senior Vice President, Midstream and Marketing at Apache.The approximately US$2 billion PHP project will provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast and is designed to transport up to 2 billion ft3/d of natural gas through approximately 430 miles of 42 in. pipeline from the Waha to Katy, Texas, areas, with connections to the US Gulf Coast and Mexico markets.
Read the article online at: https://www.worldpipelines.com/project-news/07092018/agreements-signed-for-permian-highway-pipeline/