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Kinder Morgan Seeks Support for Gulf Coast Express

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Kinder Morgan has kicked off an open season for a new pipeline in Texas just as it has announced the conclusion of an open season for an expansion project in Canada.

Kinder Morgan Texas Pipeline LLC, a subsidiary of Kinder Morgan Inc., announced March 22 the start of a non-binding open season for firm natural gas transportation service on its proposed Gulf Coast Express Pipeline project. The new pipeline will provide an outlet for increased natural gas production from the Permian Basin to growing markets along the Texas Gulf Coast. The project is designed to transport up to 1.7 billion cubic feet per day (Bcf/d) of natural gas through approximately 430 miles of 42-in. pipeline from the area near Waha to Agua Dulce, Texas. The pipeline will be in service in the second half of 2019, subject to shipper commitments.

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Natural gas supply will be sourced into the project from multiple locations, including existing receipt points along the Kinder Morgan Texas Pipeline and El Paso Natural Gas pipeline systems in the Permian Basin. Other sources include a proposed interconnection with the Trans-Pecos Pipeline and additional interconnections to both intrastate and interstate pipeline systems in the Waha area. Deliveries of natural gas into the Agua Dulce area will include points into Kinder Morgan Texas Pipeline’s existing Gulf Coast network, Kinder Morgan-owned intrastate affiliates (KM Tejas and KM Border pipelines), the Spectra Valley Crossing pipeline, the NET Mexico header and multiple other intrastate and interstate natural gas pipelines.

“The Gulf Coast Express Pipeline project connects growing natural gas supplies in the Permian Basin with expanding markets for natural gas on the Texas Gulf Coast, including export markets via liquefied natural gas and deliveries into Mexico, while providing shippers flow assurance and margin enhancement through a wide variety of interconnecting pipelines,” said Kinder Morgan Natural Gas Midstream president Duane Kokinda. “We believe Agua Dulce is a natural destination for incremental Permian production due to the existing and planned pipeline infrastructure in that area.”

The open season bid period began on March 22 and runs until April 20.

Open Season for Trans Mountain Expansion Concludes

Trans Mountain has successfully concluded a supplemental open season for 22,000 barrels per day (bpd) of capacity on its planned expanded pipeline, subject only to final shipper board approval for that volume. The company is pleased to have all available long-term firm service capacity now contracted on the pipeline with a diverse group of 13 customers.

Collectively the firm shippers have made 15- and 20-year commitments of 707,500 bpd or roughly 80 percent of the capacity on the expanded pipeline, with the other 20 percent reserved for spot volumes as required by the Canadian National Energy Board (NEB).

“We’re very pleased with the swift and positive conclusion of this open season, demonstrating the continued strong market support for our project and the much-needed access to new markets it brings to Canadian producers and the secure supply of Canadian crude to refineries throughout the Pacific basin,” said Ian Anderson, president of Kinder Morgan Canada.

Next steps for the project include arranging acceptable financing and a final investment decision by Kinder Morgan. Construction is set to begin in fall 2017 and the project is expecting an in-service date of late 2019.

In November 2016, the Canadian government approved Kinder Morgan Canada’s plan to expand the existing 1,150-km Trans Mountain Pipeline system between Edmonton, Alberta, and Burnaby, British Columbia. The project is subject to 157 Conditions from the NEB that covers the life span of the project, and 37 Conditions attached to the Environmental Certificate received from the Government of British Columbia in January.

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