Image courtesty of Billy Smith II, Staff
Kinder Morgan Texas Pipeline (KMTP), EagleClaw, a portfolio company of Blackstone Energy Partners, and Apache Corporation announced they have signed a letter of intent for the development of the proposed Permian Highway Pipeline Project, which will provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast. The approximately $2 billion PHP Project is designed to transport up to 560 million cubic metres per day of natural gas through approximately 690 km of 42-inch pipeline from the Waha, Texas, area to the U.S. Gulf Coast and Mexico markets. Given the level of producer inquiry, KMI is also evaluating the economic and hydraulic feasibility of a 48-inch pipeline with increased transportation capacity. The PHP Project is expected to be in service in late 2020, subject to the execution of definitive agreements and the receipt of construction permits.
KMTP and EagleClaw will be the initial partners (50 percent ownership each), and Apache, who has been jointly developing the proposed project, will have an option to acquire up to 33 percent equity in the project from the initial partners. Apache and EagleClaw will be significant shippers on the proposed pipeline, with Apache planning to commit up to 500,000 dekatherms per day. KMTP will build and operate the pipeline.
