Kinder Morgan temporarily halts work on part of Permian Highway Pipeline after suspicious device found

Houston — Kinder Morgan temporarily shut down work on a section of its up to 2.1 Bcf/d Permian Highway Pipeline that is scheduled to begin service in early 2021 following the discovery of a suspicious device Sept. 1, the operator said.

The Texas pipeline is among a number of US natural gas infrastructure projects that have faced opposition from landowners and environmental groups.

There was no immediate word on the extent of the shutdown or how long it would last. A spokesman for the Texas Department of Public Safety, Sgt. Deon Cockrell, said only that the "surrounding area" was impacted.

Permian Highway Pipeline contractors discovered a suspicious device at a work site in Blanco County, Texas, Kinder Morgan spokeswoman Melissa Ruiz said in an e-mailed statement. It was not immediately clear if the device was dangerous.

"Work in the immediate vicinity has halted, the area has been cleared and secured, and local, state and federal law enforcement agencies are managing the response," Ruiz said. "A Unified Command Center has been established, and an investigation is underway."

She referred further questions to law enforcement.

In September 2018, Kinder Morgan made a positive final investment decision to build Permian Highway Pipeline, which is being designed to boost takeaway capacity from the Permian Basin to the US Gulf Coast.

Permian Highway Pipeline will transport gas through 430 miles of 42-inch diameter pipeline from the Waha, Texas, area to the Gulf Coast and Mexico markets. Shippers include EagleClaw Midstream Ventures, Apache and ExxonMobil's XTO Energy.

Kinder Morgan, which moves more than a third of the gas consumed in the US, is building and will operate the pipeline. It, EagleClaw Midstream and Altus Midstream each hold an ownership interest in the project of approximately 26.6%, and an affiliate of an anchor shipper has a 20% interest.

Over the years, PHP has faced multiple legal obstacles from landowners and communities along the route. Among the disputes: the compensation amounts the pipeline company was offering to pay for rights of way acquired through eminent domain condemnations.

Kinder Morgan already operates the Gulf Coast Express gas pipeline in the Permian, which entered service in 2019.

While traditionally an oil play, significant amounts of associated gas being lifted is luring increased midstream activity to the Permian. Transporting the resources to the Gulf Coast is critical because of the export and petrochemical infrastructure located there. The pipeline network also allows for greater flows to Mexico, which is heavily reliant on US gas to meet its power generation needs.