DCP Midstream LP has agreed to participate in developing Kinder Morgan Texas Pipeline LLC’s (KMTP) proposed Gulf Coast Express Pipeline Project, the companies said Tuesday.

Gulf Coast Express would provide an outlet for increased natural gas production from the Permian Basin to markets along the Texas Gulf Coast. The project is designed to transport up to 1.7 million Dth/d of natural gas through 430 miles of 42-inch diameter pipeline from the Waha, TX, area to Agua Dulce, TX. The pipeline is expected to be in service in the second half of 2019, subject to shipper commitments.

“We are excited to be partnering with one of the larger natural gas marketers in the Permian Basin area, with DCP Midstream currently marketing approximately 600 MMcf/d of natural gas in that region,” said Kinder Morgan’s Duane Kokinda, president of natural gas midstream. “We believe DCP’s strong Permian position, when combined with the downstream market connectivity of Kinder Morgan’s Texas Intrastate network, creates a valuable project for both producers and markets.”

A nonbinding open season for firm service on the pipeline is in process. It is anticipated that DCP would be a partner and shipper on the pipeline, while KMI would build and operate it.

DCP is the largest natural gas liquids (NGL) producer and gas processor in the United States and operates about 1.3 Bcf/d of processing capacity in the targeted Permian supply area. DCP also operates Sand Hills, an NGL pipeline extending from the Permian to the Mont Belvieu, TX, market. Sand Hills pipeline is currently being expanded from 280,000 b/d to 365,000 b/d.

“This opportunity presents a welcome competitive alternative that adds diversity to the market and is complementary to our recently announced Sand Hills expansion,” said DCP CEO Wouter van Kempen. “DCP has a premier portfolio of integrated assets in the Permian offering a full range of services and solutions to our customers.”

Gas supply is expected to be sourced into the project from multiple locations, including existing receipt points along Kinder Morgan Inc.’s (KMI) KMTP and El Paso Natural Gas pipeline systems in the Permian, a proposed interconnection with the Trans-Pecos Pipeline, and additional interconnections to both intrastate and interstate pipeline systems in the Waha area.

Gas deliveries 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, KMI said.

The newly formed partnership isn’t the only entity targeting the Permian Basin. NAmerico Energy Holdings LLC’s newly formed Pecos Trail Pipeline Co. is planning a 468-mile intrastate gas system originating in West Texas and terminating at various points around Corpus Christi, TX. And Enterprise Products Partners LP plans to tap the Permian with a pipeline to carry NGLs to its fractionation and storage complex in Mont Belvieu.

Earlier this year DCP Midstream LLC and DCP Midstream Partners LP combined to create the largest NGL producer and gas processor in the United States. At the time expansion projects in the DJ Basin and on the Sand Hills Pipeline were announced.