Permian Highway Pipeline in Expansion Project FID

Permian Highway Pipeline LLC (PHP) has announced a final investment decision to proceed with its expansion project after securing binding firm transportation agreements for all available capacity, one of PHP’s parent companies, Kinder Morgan Inc, has revealed.

The project will increase PHP’s capacity by approximately 550 million cubic feet per day, according to Kinder Morgan, which said the project will involve primarily additional compression on PHP to increase natural gas deliveries from the Waha area to multiple mainline connections. The target in-service date for the project is anticipated to be November 1, 2023, Kinder Morgan highlighted.

“We are excited to have achieved FID on this very important expansion,” Kinder Morgan Natural Gas Midstream President Sital Mody said in a company statement.

“The project will alleviate transportation constraints out of the Permian Basin so as to further support meeting our domestic and global energy needs,” Mody added in the statement.

Jamie Welch, the president and CEO of Kinetik, another parent company of PHP, said, “this expansion couldn’t come at a more critical time, as it will foster future natural gas production growth in West Texas and provide several liquefaction facilities along the Texas Gulf Coast with more affordable, reliable supply”.

“In addition, approximately 30 of Kinetik’s customers will gain access to premium priced markets and transportation flow assurance, which is critical to minimizing flared volumes,” Welch added.

Back in April this year, Kinder Morgan revealed that PHP had announced a binding open season to solicit commitments for an expansion project on its system. In a company statement at the time, Kinder Morgan noted that, upon achieving a final investment decision, the project will increase PHP’s capacity by nearly 650 million cubic feet per day. The binding open season began on April 25 and ended on May 13.

In January 2021, Kinder Morgan announced that the PHP began full commercial in-service on January 1, 2021. Kinder Morgan noted at the time that the pipeline had been flowing volumes during the commissioning process for several weeks prior to full commercial in-service. PHP is jointly owned by subsidiaries of Kinder Morgan, Kinetik Holdings, and ExxonMobil, with an ownership interest of 26.7 percent, 53.3 percent and 20 percent, respectively.

PHP is not the only development progressing on Kinder Morgan’s roster. In May this year, the company revealed that Gulf Coast Express Pipeline LLC (GCX) announced an open season to solicit commitments for an expansion project on its system. Upon achieving a final investment decision, the project will increase GCX’s capacity by nearly 570 million cubic feet per day, according to Kinder Morgan.

GCX is jointly owned by subsidiaries of Kinder Morgan, DCP Midstream LP, an affiliate of ArcLight Capital Partners LLC, and Kinetik Holdings with an ownership interest of 34 percent, 25 percent, 25 percent and 16 percent respectively. Kinder Morgan Texas Pipeline is the operator of GCX.

To contact the author, email andreas.exarheas@rigzone.com