Kinder Morgan Inc. (KMI) on Monday announced that the Permian Highway Pipeline (PHP) began full commercial in-service on Jan. 1, delivering natural gas from the Waha in West Texas to the Katy area near Houston, with connections to the Gulf Coast and Mexico markets.

PHP

The pipeline, which has multiple ownership interests but is operated by KMI subsidiary Kinder Morgan Texas Pipeline (KMTP), is fully subscribed under long-term contracts. KMI said PHP provides approximately 2.1 Bcf/d of natural gas capacity, helping to reduce gas flaring in the Permian Basin.

The new pipeline had been flowing volumes during the commissioning process for several weeks prior to full commercial in-service, KMI said.

“PHP will continue to provide environmental benefits and economic value to the state of Texas for many years to come,” said KMI Natural Gas Midstream President Sital Mody. “We believe that the Permian Basin will remain an important supply basin for decades, and our strong network of pipelines provides the ability to connect this supply to critical markets along the Gulf Coast.”

KMTP, EagleClaw Midstream LLC and Altus Midstream LP each hold an ownership interest of about 26.7%, and an affiliate of an anchor shipper has a 20% interest, KMI said.

In addition to EagleClaw, shippers include Apache Corp. and XTO Energy Inc., a subsidiary of ExxonMobil Corp. 

The pipeline is Kinder’s second out of the Permian. Gulf Coast Express went into service in September 2019. Kinder was planning a third Permian pipeline, prior to the Covid-19 pandemic, but the pandemic-induced oil market collapse of 2020 delayed those plans.

RBN Energy LLC analysts, however, have noted that by late 2020 Permian production had generally recovered from the depths reached last summer.

[Plan for natural gas pricing 10 years out with NGI’s Forward Look – forward curve data.]

KMI brought PHP online despite having to reroute a leg of the pipeline around a river crossing. That change reflected litigation that hampered work on the pipeline at various stages. Last year, management cited legal battles behind a decision to push the targeted startup to early 2021 from an earlier plan to begin in October.