Pipeline solution provides attractive, broad
U.S. Gulf Coast market optionality for Permian Basin
production
Kinder Morgan Texas Pipeline LLC (KMTP), a subsidiary of Kinder
Morgan, Inc. (NYSE: KMI), EagleClaw Midstream Ventures, LLC
(EagleClaw), a portfolio company of Blackstone Energy Partners, and
Apache Corporation (NYSE, NASDAQ: APA) today announced they have
signed a letter of intent for the development of the proposed
Permian Highway Pipeline Project (PHP 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
2.0 billion cubic feet per day (Bcf/d) of natural gas through
approximately 430 miles 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.
Natural gas supply will be sourced into the PHP Project from
multiple locations, including KMI’s, EagleClaw’s and Apache’s
existing systems in the Permian Basin, with additional
interconnections to both intrastate and interstate pipeline systems
in the Waha area. The PHP Project will hold capacity on KMI’s
intrastate pipeline systems in the market area, which will uniquely
enable it to deliver natural gas to the Katy market hub, the Agua
Dulce market hub, the Coastal Bend and Kinder Morgan Tejas headers
connected to the Freeport LNG export facility, the Cheniere header
connected to the Cheniere Corpus Christi LNG export facility, and
numerous pipelines along the Texas Gulf Coast.
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.
“The PHP Project is structured to provide unrivaled market
optionality for Permian producers,” said Sital Mody, Chief
Commercial Officer of Kinder Morgan Natural Gas Midstream. “By
contracting for space on KMI’s extensive intrastate systems, the
project will offer seamless nominations to the Katy and Agua Dulce
market hubs; pipeline headers into LNG export facilities on the
Texas Gulf Coast; multiple pipelines delivering gas into Mexico,
including Valley Crossing, NET Mexico, and KMI’s Border and
Monterrey pipelines; and numerous other intrastate and interstate
pipelines. Additionally, shippers on the project will be able to
contract for additional transportation, storage and gas sales
options with KMI, whose existing intrastate systems are directly
connected to most end users along the Texas Gulf Coast.”
“As investors throughout the energy value chain, with extensive
holdings of both midstream and upstream assets in the Permian
Basin, we have a firsthand understanding of the need for additional
takeaway capacity to unlock the full growth potential of the
Permian Basin,” said David Foley, CEO of Blackstone Energy
Partners. “We look forward to continuing to proactively address the
critical infrastructure needed to support producers, and we are
excited to establish a partnership on this important project
between EagleClaw, the largest privately-held natural gas gathering
and processing business in the Delaware Basin, and Kinder Morgan,
one of the nation’s most experienced pipeline developers and
operators.”
Bob Milam, CEO of EagleClaw, added, “EagleClaw has been in
extensive discussions with pipeline operators and customers on the
need for further downstream connectivity out of the Waha area for
the ever-increasing volumes of associated gas. We have evaluated
many different pipeline options over the last 18 months, and we
believe that this project has the best and broadest end-market
options that will maximize overall net-back value and end-market
flexibility for our customers.”
“Apache’s participation in this second greenfield gas pipeline
project out of the Permian Basin gives us additional operational
flexibility and market optionality, providing unparalleled access
not only to growing legacy markets along the Gulf Coast, but also
to expanding LNG and export markets. The estimated in-service date
of the PHP Project also coincides with growth and scale of our
production forecast for Alpine High as well as other Permian
production. Kinder Morgan is an industry leader with a proven track
record of developing and building capital intensive pipeline
infrastructure projects, and we are very pleased to be a part of
it,” said Brian Freed, Apache’s senior vice president, Midstream
and Marketing.
About Kinder Morgan,
Inc.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. It owns an interest in
or operates approximately 85,000 miles of pipelines and
152 terminals. KMI’s pipelines transport natural gas, refined
petroleum products, crude oil, condensate, CO2 and other products,
and its terminals transload and store petroleum products, ethanol
and chemicals, and handle such products as petroleum coke, metals
and ores. For more information, please visit
www.kindermorgan.com.
About EagleClaw Midstream Ventures,
LLC
EagleClaw Midstream Ventures, LLC is focused on rapid response
to the midstream infrastructure requirements of Permian producers.
The Company provides comprehensive gathering, transportation,
compression, processing and treating services necessary to bring
natural gas, natural gas liquids and crude oil to market. EagleClaw
currently has long term dedications for over 300,000 acres from a
broad number of successful and active producers in the Delaware
basin. For more information, please visit
www.eagleclawmidstream.com.
About Blackstone
Blackstone Energy Partners is Blackstone's energy-focused
private equity business, with a successful record built on our
industry expertise and partnerships with exceptional management
teams. Blackstone has invested over $15 billion of private equity
globally across a broad range of sectors within the energy
industry. Blackstone (NYSE: BX) is one of the world's leading
investment firms. Our asset management businesses, with over $450
billion in assets under management, include investment vehicles
focused on private equity, real estate, public debt and equity,
non-investment grade credit, real assets and secondary funds, all
on a global basis. Further information is available at
www.blackstone.com.
About Apache Corporation
Apache Corporation is an oil and gas exploration and production
company with operations in the United States, Egypt and the United
Kingdom. Apache posts announcements, operational updates, investor
information and copies of all press releases on its website,
www.apachecorp.com, and on its Media and Investor Center mobile
application, which is available for free download from the Apple
App Store and the Google Play store.
Important Information Relating to
Kinder Morgan’s Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995 and Section 21E of the Securities and Exchange Act of 1934.
Generally the words “expects,” “believes,” anticipates,” “plans,”
“will,” “shall,” “estimates,” and similar expressions identify
forward-looking statements, which are generally not historical in
nature. Forward-looking statements are subject to risks and
uncertainties and are based on the beliefs and assumptions of
management, based on information currently available to them.
Although Kinder Morgan believes that these forward-looking
statements are based on reasonable assumptions, it can give no
assurance that any such forward-looking statements will
materialize. Important factors that could cause actual results to
differ materially from those expressed in or implied from these
forward-looking statements include the risks and uncertainties
described in Kinder Morgan’s reports filed with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for
the year-ended December 31, 2017 (under the headings “Risk Factors”
and “Information Regarding Forward-Looking Statements” and
elsewhere) and its subsequent reports, which are available through
the SEC’s EDGAR system at www.sec.gov and on our website at
ir.kindermorgan.com. Forward-looking statements speak only as of
the date they were made, and except to the extent required by law,
Kinder Morgan undertakes no obligation to update any
forward-looking statement because of new information, future events
or other factors. Because of these risks and uncertainties, readers
should not place undue reliance on these forward-looking
statements.
Important Information Relating to
Apache’s Forward-Looking Statements
This press release includes forward-looking statements. Except
for the historical information contained herein, the matters
discussed in this press release are forward-looking statements that
involve certain risks and uncertainties, such as Apache’s
expectations regarding future results, capital expenditures,
project completions, liquidity and financial market conditions.
These risks and uncertainties include, among other things,
insufficient cash from operations, adverse market conditions,
governmental regulations and other factors discussed in Apache’s
filings with the U.S. Securities and Exchange Commission. If any of
these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results or outcomes may vary
materially from those expected. Apache disclaims any intention or
obligation to update publicly or reverse such statements, whether
as a result of new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20180625006227/en/
KMI Media RelationsMelissa Ruiz, (713)
420-6397newsroom@kindermorgan.comorKMI Investor
Relations(713)
369-9490km_ir@kindermorgan.comwww.kindermorgan.comorEagleClawJamie
Welch, (713) 621-7300jwelch@eagleclawmidstream.comorBlackstone
Media RelationsPaula Chirhart, (212)
583-5011Paula.chirhart@blackstone.comorApache Media
RelationsCastlen Kennedy, (713)
296-7189castlen.kennedy@apachecorp.comorApache Investor
RelationsGary Clark, (713)
296-6472gary.clark@apachecorp.com
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