Kinder Morgan Green Lights Permian Natural Gas Pipeline Expansion Project

(Reuters) — Pipeline operator Kinder Morgan Inc. gave the greenlight to financing expanded capacity on a natural gas pipeline that brings fuel from fields in west Texas to export hubs near Houston, the company said on Wednesday.

The expansion comes as several new LNG processing plants have been proposed along the U.S. Gulf Coast to meet rising demand in Europe and Asia. The proposed LNG plants would require about 3.1 billion cubic feet per day (Bcf/d) of new gas supply.

The 428-mile (689-km) Permian Highway Pipeline, owned by Kinder Morgan, Kinetik Holdings and Exxon Mobil, now carries 1.2 Bcf/d from the Permian Basin of west Texas and New Mexico.

The expansion would add 550 MMcf/d with the higher capacity available starting in November, 2023, Kinder Morgan said. The project still requires approvals and permitting.

"The project will alleviate transportation constraints out of the Permian Basin," said Sital Mody, president of Kinder Morgan's natural gas midstream business.

A separate gas pipeline expansion that carries natural gas from the Permian Basin to points along the south Texas coast, remains under consideration, a spokesperson said. That project, called the Gulf Coast Express (GCX) expansion, would add nearly 570 MMcf/d to existing capacity.

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

GCX is owned by Kinder Morgan, ArcLight Capital and DCP Midstream and delivers gas to hubs outside Corpus Christi, Texas.

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