ExxonMobil announces plans to join Permian Highway Pipeline

By ExxonMobil | August 13, 2018

Kinder Morgan Texas Pipeline LLC, a subsidiary of Kinder Morgan Inc., EagleClaw Midstream Ventures LLC, a portfolio company of Blackstone Energy Partners, and Apache Corporation have announced that Exxon Mobil Corporation has signed a letter of intent to support the proposed Permian Highway Pipeline Project. Under the letter of intent, ExxonMobil subsidiary XTO Energy may contract for up to 450,000 dekatherms per day (Dth/d) of capacity on the pipeline.

The approximately $2 billion PHP Project will provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast and is designed to transport up to 2 billion cubic feet per day (Bcf/d) of natural gas through approximately 430 miles of 42-inch pipeline from the Waha to Katy, Texas, areas, with connections to the U.S. Gulf Coast and Mexico markets. The PHP Project is expected to be in service in late 2020, subject to the execution of definitive agreements and the receipt of construction permits.

As previously announced, KMTP and EagleClaw will be the initial partners, each with a 50 percent ownership interest in the project. Apache and EagleClaw will both be significant shippers on the proposed pipeline, with each entity planning to commit up to 500,000 Dth/d to the project. Apache will also have the option to acquire equity from the initial partners. KMTP will build and operate the pipeline.

“We are committed to supporting development of the infrastructure needed for our planned production growth in the Permian Basin,” said Sara Ortwein, President, XTO Energy. “The Permian Highway Pipeline will provide additional capacity for reliable transportation of natural gas to the U.S. Gulf Coast.”

“We are very pleased to have an industry leader like ExxonMobil support our project and are encouraged by the significant progress we have made with our co-developers and other potential shippers to rapidly shore up commitments,” said Sital Mody, President of Kinder Morgan Natural Gas Midstream. “We expect this development will accelerate our path to a final investment decision.”