A Kinder Morgan Inc. subsidiary, DCP Midstream LP and a Targa Resources Corp. affiliate decided to proceed with their planned 1.92-Bcf/d Gulf Coast Express gas pipeline project in Texas after obtaining enough shipper support.
The final investment decision for the $1.7 billion project followed the execution of definitive joint venture agreements and long-term, binding transportation commitments for about 85% of the project's capacity, with the remaining expected to be subscribed by early 2018, according to a Dec. 21 news release. The developers plan to launch a binding open season for the remaining capacity in January 2018.
Committed shippers include DCP Midstream, Targa, Apache Corp. and Pioneer Natural Resources Co. Kinder Morgan Texas Pipeline LLC has committed volumes supported by a long-term purchase agreement that locks in the equivalent transport fee on the pipeline.
Gulf Coast Express would comprise a mainline totaling 447 miles from the Waha Hub in the Permian Basin of West Texas to a terminal near Agua Dulce, Texas, on the Gulf Coast and a 50-mile Midland lateral section connecting to the mainline and including associated compression facilities.
Under the agreement, Kinder Morgan would construct, own and operate a 50% stake in the project, while DCP Midstream and Targa would hold 25% equity interests each.
In a separate news release, Apache said it signed up for 500 MMcf/d of natural gas transportation capacity on the Gulf Coast Express pipeline. Apache anticipates the project to provide access to incremental demand for LNG exports and Mexico markets. As part of the deal, Apache gained an option to buy up to a 15% equity stake from Kinder Morgan.
"Today's announcement supplements previously contracted shipping capacity from the region and complements the significant field infrastructure we have built to accelerate the development program at Alpine High," said Brian Freed, senior vice president of midstream and marketing at Apache.
The Gulf Coast Express pipeline system is scheduled to begin service in October 2019, with construction expected to start in the first quarter of 2018.
