Kinder: Permian gas line interest significant
Houston, 25 April (Argus) — Bids for capacity on Kinder Morgan’s proposed Gulf Coast Express pipeline significantly exceeded the planned capacity 1.7 Bcf/d (48mn m³/d), potentially leading to a larger project that would connect west Texas natural gas supplies to the Gulf coast.
The US infrastructure company is still evaluating the bids received during a non-binding open season that closed late last week. Based on the level of interest, Kinder Morgan could increase the size of the pipeline, the company told Argus.
Kinder Morgan is jointly developing the Gulf Coast Express pipeline with DCP Midstream, a leading gas marketer in the Permian basin and anchor shipper. The project will allow supplies from the Permian, the second largest US field, to meet growing demand on the Texas coast.
Output from the Permian basin has been in the spotlight as producers ramp up drilling there to take advantage of low development costs and higher energy prices. Waha gas prices so far this month have traded at an average 32¢/mmBtu discount to the Henry Hub, compared with 17¢/mmBtu a year earlier. That expanding discount is a sign of growing production.
Written by Argus