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ExxonMobil joins Kinder Morgan on Permian Highway Pipeline Project

13/08/2018
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With production from the Permian Basin rapidly increasing, ExxonMobil has been looking for more outlets to transport its natural gas. Kinder Morgan’s $2 billion Permian Highway Pipeline has seemingly been chosen as the answer to this problem, with ExxonMobil signing on a as major customer this week to the Pipeline that will carry natural gas from West Texas to the Houston region.
The new Permian Highway Pipeline will transport up to 2 billion cubic feet per day of natural gas to Katy, Texas with connections to the US Gulf Coast and Mexico markets.
The $2 billion Permian Highway Pipeline (PHP) Project will provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast and is designed to transport up to 2 billion cubic feet per day (Bcf/d) of natural gas through approximately 430 miles of 42-inch pipeline from the Waha to Katy, Texas areas, with connections to the US Gulf Coast and Mexico markets. 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.

Under the letter of intent signed by ExxonMobil, XTO Energy (an ExxonMobil subsidiary) may contract for up to 450,000 dekatherms per day (Dth/d) of capacity on the pipeline.

Commenting on ExxonMobil’s participation in the project, Sital Mody, President of Kinder Morgan Natural Gas Midstream, said:

“We are very pleased to have an industry leader like ExxonMobil support our project and are encouraged by the significant progress we have made with our co-developers and other potential shippers to rapidly shore up commitments. We expect this development will accelerate our path to a final investment decision.”

Sara Ortwein, President of XTO Energy, commented:

“We are committed to supporting development of the infrastructure needed for our planned production growth in the Permian Basin. The Permian Highway Pipeline will provide additional capacity for reliable transportation of natural gas to the US Gulf Coast.”

Exxon’s Permian plans…

ExxonMobil is eyeing significant investment and growth in the Permian Basin, with plans in place to triple its oil and gas production in the Permian by 2025, whilst also spending more than $2 billion on transportation and terminal upgrades in West Texas. In addition, ExxonMobil has agreed to spend over $6 billion to buy the Permian acreage of Fort Worth’s prominent Bass family, which would more than double Exxon’s Permian acreage holdings.

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ExxonMobil joins Kinder Morgan on Permian Highway Pipeline Project - Time to read 3 min
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