Permian Highway Pipeline LLC (PHP) this week launched a binding open season to solicit commitments for a project that would expand its capacity by about 650 MMcf/d, pending a final investment decision.

The expansion would bring PHP’s total capacity to about 2.75 Bcf/d.

Co-owner Kinder Morgan Inc. (KMI) announced the open season. Kinder Morgan Texas Pipeline is the operator of PHP.

A foundation shipper has already executed long-term binding transportation agreements for half of the planned expansion capacity, KMI said.

The project would primarily involve compression expansions on PHP to increase natural gas deliveries from the Waha area of West Texas to multiple mainline connections, including Katy, TX, and various Gulf Coast markets.

Pending additional customer commitments, KMI said the targeted in-service date for the project is October 2023.

The open season extends through May 13, though KMI said it reserves the right to extend the period if needed.  

PHP is jointly owned by subsidiaries of KMI, Kinetik Holdings Inc. and ExxonMobil, with an ownership interest of 26.7%, 53.3% and 20%, respectively.

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The expansion plan comes as the U.S. Energy Information Administration (EIA) expects total natural gas production to expand.

EIA said in its latest Drilling Productivity Report (DPR) last week that it expects total natural gas output from the key U.S. production regions to climb 721 MMcf/d from April to May, reaching nearly 91 Bcf/d.

Of the seven regions — the Anadarko, Appalachian and Permian basins, as well as the Bakken, Eagle Ford, Haynesville and Niobrara formations — only the Anadarko is expected to see natural gas output decrease from April to May.  

Appalachia (up 197 MMcf/d), the Bakken (up 27 MMcf/d), the Eagle Ford (up 110 MMcf/d), the Haynesville (up 245 MMcf/d), the Niobrara (up 3 MMcf/d) and the Permian (up 154 MMcf/d) will all contribute output growth for the period, according to the DPR modeling.

Meanwhile, the U.S. rig count moved two units higher to 695 for the week ended April 22, data from oilfield services provider Baker Hughes Co. show. That compared with 438 rigs running in the year-earlier period.

The Texas Independent Producers and Royalty Owners said exploration and production companies  have begun to respond to “higher commodity prices and the call to increase domestic production to address global supply shortages.”