Kin­der Mor­gan, DCP Mid­stream and Targa Re­sources En­ter into let­ter of in­tent to jointly de­velop Gulf Coast Ex­press Pipe­line Project

The McLeod River Post - - The Patch -

Midland Basin Lat­eral Added to the Project Scope; Sig­nif­i­cant Vol­umes to be Com­mit­ted to the Project

Kin­der Mor­gan Texas Pipe­line LLC (KMTP), a sub­sidiary of Kin­der Mor­gan, Inc., DCP Mid­stream, LP (DCP Mid­stream) and an af­fil­i­ate of Targa Re­sources Corp. (Targa) to­day (Oct.4) an­nounced they have signed a let­ter of in­tent with re­spect to the joint de­vel­op­ment of the pro­posed Gulf Coast Ex­press Pipe­line Project (GCX Project), which would pro­vide an out­let for in­creased nat­u­ral gas pro­duc­tion from the Per­mian Basin to grow­ing mar­kets along the Texas Gulf Coast. The par­tic­i­pa­tion of the three par­ties in­volved with the GCX Project is sub­ject to ne­go­ti­a­tion and ex­e­cu­tion of de­fin­i­tive agree­ments among KMTP, DCP Mid­stream and Targa. As part of the de­fin­i­tive agree­ments, Targa and DCP Mid­stream would com­mit sig­nif­i­cant vol­umes to the pro­posed project, in­clud­ing cer­tain vol­umes pro­vided by Pi­o­neer Nat­u­ral Re­sources Com­pany (NYSE: PXD) (Pi­o­neer), a joint owner in Targa’s WestTX Per­mian Basin sys­tem and one of the largest pro­duc­ers in the Per­mian Basin.

The ca­pac­ity of the GCX Project is ex­pected to be ap­prox­i­mately 1.92 bil­lion cu­bic feet per day (Bcf/d) and would in­clude a lat­eral into the Midland Basin, con­sist­ing of ap­prox­i­mately 50 miles of 36-inch pipe­line and associated com­pres­sion to serve gas pro­cess­ing fa­cil­i­ties owned by Targa, as well as fa­cil­i­ties owned jointly by Targa and Pi­o­neer. The ex­pected in-ser­vice date of the pipe­line con­tin­ues to be sched­uled for the sec­ond half of 2019, pend­ing the timely com­ple­tion of de­fin­i­tive agree­ments with ship­pers and a fi­nal in­vest­ment de­ci­sion by the three par­ties. Per the terms of the let­ter of in­tent, KMI would build, op­er­ate and own a 50 per­cent in­ter­est in the GCX Project, and DCP Mid­stream and Targa would each hold a 25 per­cent eq­uity in­ter­est in the project.

“We are thrilled to have Targa join DCP Mid­stream and Kin­der Mor­gan in de­vel­op­ing the project and to add both Targa and Pi­o­neer as ma­jor cus­tomers on the pro­posed sys­tem,” said Kin­der Mor­gan Nat­u­ral Gas Mid­stream Pres­i­dent Duane Kokinda. “With DCP Mid­stream and Targa, we now have two of the premier gath­er­ing and pro­cess­ing sup­ply ag­gre­ga­tors in the Per­mian Basin on board, as well as one of the Basin’s largest pro­duc­ers with Pi­o­neer. The com­mit­ments of these par­ties con­firm our premise that com­bin­ing sup­ply source op­tion­al­ity in the Basin with un­par­al­leled mar­ket ac­cess on the Agua Dulce end pro­vides an at­trac­tive take­away so­lu­tion for the par­ties de­vel­op­ing nat­u­ral re­sources in the Per­mian Basin.”

“We are ex­cited to have the op­por­tu­nity to ex­pand our port­fo­lio of in­te­grated as­sets and cus­tomer of­fer­ings in the Per­mian which would com­ple­ment our Sand Hills ex­pan­sions,” said Wouter van Kem­pen, chair­man, pres­i­dent and CEO of DCP Mid­stream. “This is a strong col­lab­o­ra­tion of play­ers that draws upon our com­bined ca­pa­bil­i­ties to pro­vide a com­pet­i­tive and cap­i­tal ef­fi­cient so­lu­tion to the in­dus­try.”

“We are ex­cited to be join­ing KMI and DCP Mid­stream in the de­vel­op­ment of the GCX Project. Given our sig­nif­i­cant Per­mian Basin foot­print, con­tin­u­ing to pro­vide our cus­tomers with flex­i­bil­ity and ac­cess to premier mar­kets is al­ways our focus, and we be­lieve that the GCX Project would fur­ther en­hance those ca­pa­bil­i­ties,” said Joe Bob Perkins, CEO of Targa.

It is an­tic­i­pated that nat­u­ral gas sup­ply would be sourced into the project from mul­ti­ple lo­ca­tions, in­clud­ing ex­ist­ing re­ceipt points along KMI’s KMTP and El Paso Nat­u­ral Gas pipe­line sys­tems in the Per­mian Basin, 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 would in­clude points into KMTP’s ex­ist­ing Gulf Coast net­work, KMI-owned in­trastate af­fil­i­ates (KM Te­jas and KM Bor­der pipe­lines), the Val­ley Cross­ing pipe­line, the NET Mex­ico header, and mul­ti­ple other in­trastate and in­ter­state nat­u­ral gas pipe­lines.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.