By Stephen Nakrosis 
 

Kinder Morgan Texas Pipeline LLC and EagleClaw Midstream Ventures, LLC said Wednesday the companies have made a final investment decision to proceed with the Permian Highway Pipeline Project, which is intended to provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast.

The companies said almost all capacity available on the system is subscribed and committed under long-term, binding transportation agreements, with the remainder expected to be awarded shortly. Shippers that have committed to the project include EagleClaw, Apache Corporation and XTO Energy Inc., a subsidiary of Exxon Mobil Corp.

Kinder Morgan Texas Pipeline is a subsidiary of Kinder Morgan, Inc. (KMI). EagleClaw Midstream Ventures is a portfolio company of Blackstone Energy Partners.

The project is expected to cost about $2 billion, and is designed to transport up to 2 billion cubic feet per day of natural gas about 430 miles. The pipeline should be in service by late 2020, the companies said.

Sital Mody, President of Kinder Morgan Natural Gas Midstream, said, "With a route identified and the project nearly fully subscribed, we expect to begin stakeholder outreach, environmental surveys and right-of-way activities in the coming months."

KMTP and EagleClaw will be the initial partners, with each holding a 50% ownership interest in the project, which KMTP will build and operate.

Apache Corp. has the option to acquire equity from the initial partners and said it would assign that option to Altus Midstream. Last month, Apache and Kayne Anderson Acquisition Corp. (KAAC) announced an agreement to create the Altus Midstream Company, which will own options for equity participation in five planned pipelines from the Permian Basin to various points along the Texas Gulf Coast.

 

--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

 

(END) Dow Jones Newswires

September 05, 2018 17:38 ET (21:38 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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