HOUSTON--(BUSINESS WIRE)--Kinder Morgan Texas Pipeline LLC (KMTP), a subsidiary of Kinder Morgan,
Inc. (NYSE: KMI), EagleClaw Midstream Ventures, LLC (EagleClaw), a
portfolio company of Blackstone Energy Partners, and Apache Corporation
(NYSE, NASDAQ: APA) today announced they have signed a letter of intent
for the development of the proposed Permian Highway Pipeline Project
(PHP Project), which will provide an outlet for increased natural gas
production from the Permian Basin to growing market areas along the
Texas Gulf Coast. The approximately $2 billion PHP Project is designed
to transport up to 2.0 billion cubic feet per day (Bcf/d) of natural gas
through approximately 430 miles of 42-inch pipeline from the Waha,
Texas, area to the U.S. Gulf Coast and Mexico markets. Given the level
of producer inquiry, KMI is also evaluating the economic and hydraulic
feasibility of a 48-inch pipeline with increased transportation
capacity. 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.
Natural gas supply will be sourced into the PHP Project from multiple
locations, including KMI’s, EagleClaw’s and Apache’s existing systems in
the Permian Basin, with additional interconnections to both intrastate
and interstate pipeline systems in the Waha area. The PHP Project will
hold capacity on KMI’s intrastate pipeline systems in the market area,
which will uniquely enable it to deliver natural gas to the Katy market
hub, the Agua Dulce market hub, the Coastal Bend and Kinder Morgan Tejas
headers connected to the Freeport LNG export facility, the Cheniere
header connected to the Cheniere Corpus Christi LNG export facility, and
numerous pipelines along the Texas Gulf Coast.
KMTP and EagleClaw will be the initial partners (50 percent ownership
each), and Apache, who has been jointly developing the proposed project,
will have an option to acquire up to 33 percent equity in the project
from the initial partners. Apache and EagleClaw will be significant
shippers on the proposed pipeline, with Apache planning to commit up to
500,000 dekatherms per day. KMTP will build and operate the pipeline.
“The PHP Project is structured to provide unrivaled market optionality
for Permian producers,” said Sital Mody, Chief Commercial Officer of
Kinder Morgan Natural Gas Midstream. “By contracting for space on KMI’s
extensive intrastate systems, the project will offer seamless
nominations to the Katy and Agua Dulce market hubs; pipeline headers
into LNG export facilities on the Texas Gulf Coast; multiple pipelines
delivering gas into Mexico, including Valley Crossing, NET Mexico, and
KMI’s Border and Monterrey pipelines; and numerous other intrastate and
interstate pipelines. Additionally, shippers on the project will be able
to contract for additional transportation, storage and gas sales options
with KMI, whose existing intrastate systems are directly connected to
most end users along the Texas Gulf Coast.”
“As investors throughout the energy value chain, with extensive holdings
of both midstream and upstream assets in the Permian Basin, we have a
firsthand understanding of the need for additional takeaway capacity to
unlock the full growth potential of the Permian Basin,” said David
Foley, CEO of Blackstone Energy Partners. “We look forward to continuing
to proactively address the critical infrastructure needed to support
producers, and we are excited to establish a partnership on this
important project between EagleClaw, the largest privately-held natural
gas gathering and processing business in the Delaware Basin, and Kinder
Morgan, one of the nation’s most experienced pipeline developers and
operators.”
Bob Milam, CEO of EagleClaw, added, “EagleClaw has been in extensive
discussions with pipeline operators and customers on the need for
further downstream connectivity out of the Waha area for the
ever-increasing volumes of associated gas. We have evaluated many
different pipeline options over the last 18 months, and we believe that
this project has the best and broadest end-market options that will
maximize overall net-back value and end-market flexibility for our
customers.”
“Apache’s participation in this second greenfield gas pipeline project
out of the Permian Basin gives us additional operational flexibility and
market optionality, providing unparalleled access not only to growing
legacy markets along the Gulf Coast, but also to expanding LNG and
export markets. The estimated in-service date of the PHP Project also
coincides with growth and scale of our production forecast for Alpine
High as well as other Permian production. Kinder Morgan is an industry
leader with a proven track record of developing and building capital
intensive pipeline infrastructure projects, and we are very pleased to
be a part of it,” said Brian Freed, Apache’s senior vice president,
Midstream and Marketing.
About Kinder Morgan, Inc.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. It owns an interest in or
operates approximately 85,000 miles of pipelines and 152 terminals.
KMI’s pipelines transport natural gas, refined petroleum products, crude
oil, condensate, CO2 and other products, and its terminals
transload and store petroleum products, ethanol and chemicals, and
handle such products as petroleum coke, metals and ores. For more
information, please visit www.kindermorgan.com.
About EagleClaw Midstream Ventures, LLC
EagleClaw Midstream Ventures, LLC is focused on rapid response to the
midstream infrastructure requirements of Permian producers. The Company
provides comprehensive gathering, transportation, compression,
processing and treating services necessary to bring natural gas, natural
gas liquids and crude oil to market. EagleClaw currently has long term
dedications for over 300,000 acres from a broad number of successful and
active producers in the Delaware basin. For more information, please
visit www.eagleclawmidstream.com.
About Blackstone
Blackstone Energy Partners is Blackstone's energy-focused private equity
business, with a successful record built on our industry expertise and
partnerships with exceptional management teams. Blackstone has invested
over $15 billion of private equity globally across a broad range of
sectors within the energy industry. Blackstone (NYSE: BX) is one of the
world's leading investment firms. Our asset management businesses, with
over $450 billion in assets under management, include investment
vehicles focused on private equity, real estate, public debt and equity,
non-investment grade credit, real assets and secondary funds, all on a
global basis. Further information is available at www.blackstone.com.
About Apache Corporation
Apache Corporation is an oil and gas exploration and production company
with operations in the United States, Egypt and the United Kingdom.
Apache posts announcements, operational updates, investor information
and copies of all press releases on its website, www.apachecorp.com,
and on its Media and Investor Center mobile application, which is
available for free download from the Apple App Store and the Google Play
store.
Important Information Relating to Kinder
Morgan’s Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995 and
Section 21E of the Securities and Exchange Act of 1934. Generally the
words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,”
“estimates,” and similar expressions identify forward-looking
statements, which are generally not historical in nature.
Forward-looking statements are subject to risks and uncertainties and
are based on the beliefs and assumptions of management, based on
information currently available to them. Although Kinder Morgan believes
that these forward-looking statements are based on reasonable
assumptions, it can give no assurance that any such forward-looking
statements will materialize. Important factors that could cause actual
results to differ materially from those expressed in or implied from
these forward-looking statements include the risks and uncertainties
described in Kinder Morgan’s reports filed with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for the
year-ended December 31, 2017 (under the headings “Risk Factors” and
“Information Regarding Forward-Looking Statements” and elsewhere) and
its subsequent reports, which are available through the SEC’s EDGAR
system at
www.sec.gov
and on our website at ir.kindermorgan.com. Forward-looking statements
speak only as of the date they were made, and except to the extent
required by law, Kinder Morgan undertakes no obligation to update any
forward-looking statement because of new information, future events or
other factors. Because of these risks and uncertainties, readers should
not place undue reliance on these forward-looking statements.
Important Information Relating to Apache’s
Forward-Looking Statements
This press release includes forward-looking statements. Except for
the historical information contained herein, the matters discussed in
this press release are forward-looking statements that involve certain
risks and uncertainties, such as Apache’s expectations regarding future
results, capital expenditures, project completions, liquidity and
financial market conditions. These risks and uncertainties include,
among other things, insufficient cash from operations, adverse market
conditions, governmental regulations and other factors discussed in
Apache’s filings with the U.S. Securities and Exchange Commission. If
any of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results or outcomes may vary
materially from those expected. Apache disclaims any intention or
obligation to update publicly or reverse such statements, whether as a
result of new information, future events or otherwise.
