Trio show intent to develop Gulf Coast express pipeline

Kinder Morgan Texas Pipeline, a Kinder Morgan unit, DCP Midstream and a Targa Resources affiliate signed a letter of intent to develop the proposed Gulf Coast Express pipeline. 

The pipeline would provide an outlet for increased natural gas production from the Permian Basin to growing markets along the Texas Gulf Coast.

As part of the definitive agreements subject to negotiation, Targa and DCP Midstream would commit significant volumes to the proposed project, including certain volumes provided by Pioneer Natural Resources company, 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.

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.