Houston’s Kinder Morgan is ready to move forward with its $1.7 billion gas pipeline from West Texas to the Corpus Christi area after signing on Apache Corp. as a major customer.
The project, expected to be in operation by October 2019, is meant to capitalize off of the ongoing shale boom in West Texas’ Permian Basin. While companies are primarily drilling for oil, there’s also a lot of associated natural gas produced from the shale rock – even more than initially projected.
The goal is to ship the gas to industrial and port hubs near Corpus Christi and Houston, where the gas can be shipped to power plants for electricity generation, to liquefied natural gas export terminals, or to Mexico, which is increasingly importing more American gas for its power generation.
The 500-mile project is 50 percent owned by Kinder Morgan with the other 25 percent slices of the pie belonging to Houston’s Targa Resources and DCP Midstream, which is a joint venture between Houston’s Phillips 66 and Calgary-based Enbridge. Construction is expected to start in the first quarter of 2018.
As part of its deal as an anchor customer, Houston-based Apache has the option of buying a 15 percent stake from Kinder Morgan. Apache said the project is much needed to move gas from West Texas and will complement Apache’s developing Alpine High fields in southwestern Texas.
The pipeline is one of more than 15 proposed projects to expand or construct pipelines that will traverse Texas from the Permian Basin to Houston, Corpus Christi and Beaumont. Most of the pipelines are for crude oil or natural gas liquids.
Competing projects include the planned Pecos Trail pipeline to Corpus Christi, which is proposed by Houston-based NAmerican Partners, a 2-year old venture backed by private equity.
Also, Houston-based Tellurian announced plans this week for the proposed Permian Global Access Pipeline, a 625-mile project from West Texas to southwestern Louisiana, to serve Tellurian’s planned Driftwood LNG export terminal and other projects. The pipeline is the biggest part of a $7 billion network Tellurian announced.
As for Kinder Morgan’s project, the 500-mile pipeline network would transport 1.92 billion cubic feet of gas a day. Irving-based Pioneer Natural Resources also is signed on as a major customer.
The 42-inch pipeline would specifically trek from Waha, Texas to Agua Dulce, which is just west of Corpus Christi. The proposed project can tap into Kinder Morgan’s existing Permian-area pipeline network, as well as Dallas-based Energy Transfer Partners’ new Trans-Pecos Pipeline, which will ship gas from West Texas to Mexico.
This first appeared on the Houston Chronicle – an Energy Voice content partner. For more click here.
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