Kinder Morgan and its partners are moving forward with the Permian Highway Pipeline expansion.
Permian Highway Pipeline, LLC (PHP) has reached a final investment decision (FID) to proceed with its expansion project after securing binding firm transportation agreements for all available capacity, according to a statement from Kinder Morgan.
PHP is jointly owned by subsidiaries of Kinder Morgan, Inc. (KMI), Kinetik Holdings Inc. (KNTK), and ExxonMobil (XOM), with an ownership interest of 26.7%, 53.3%, and 20%, respectively.
The project will increase PHP’s capacity by approximately 550 million cubic feet per day (MMcf/d). The project will involve primarily additional compression on PHP to increase natural gas deliveries from the Waha area to multiple mainline connections, Katy, Texas, and various U.S. Gulf Coast markets, according to a statement from Kinder Morgan. The target in-service date for the project is anticipated to be November 1, 2023.
“We are excited to have achieved FID on this very important expansion,” Kinder Morgan Natural Gas Midstream president Sital Mody said in a statement. “The project will alleviate transportation constraints out of the Permian Basin so as to further support meeting our domestic and global energy needs.”
Jamie Welch, president and CEO of Kinetik, said in a statement that the expansion is particularly timely, as it will foster future natural gas production growth in West Texas and provide several liquefaction facilities along the Texas Gulf Coast with more affordable, reliable supply.
“In addition, approximately 30 of Kinetik’s customers will gain access to premium priced markets and transportation flow assurance, which is critical to minimizing flared volumes,” Welch added.
Kinder Morgan is a top 10 holding in the Alerian Energy Infrastructure ETF (ENFR), which weights the security at 5.04% as of June 30. ENFR also holds Kinetik Holdings, weighted at 0.35%, according to VettaFi.
The largest holdings in ENFR as of June 30 include Enbridge (ENB, 10.55%), Enterprise Products Partners LP (EPD, 8.46%), TC Energy Corporation (TRP, 7.21%), Energy Transfer LP (ET, 6.38%), and Cheniere Energy Inc. (LNG, 5.62%), according to VettaFi.
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