Permian to Gulf Coast pipeline could alleviate bottlenecks, reduce flaring

Pipeline will deliver natural gas from Permian to Gulf Coast

Adrian Hedden
Carlsbad Current-Argus
  • Gulf Coast Express Pipeline went into service on Sept. 25.
  • Capacity is about 2 billion cubic feet per day
  • Could increase takeaway capacity and reduce flaring of natural gas

A natural gas pipeline meant to solve the Permian Basin’s recent struggles with takeaway capacity went into service this week, sending gas from West Texas to the Gulf Coast.

Kinder Morgan’s Gulf Coast Express Pipeline Project began commercial service on Sept. 25, delivering natural gas from the Waha area of West Texas to Agua Dulce near the Texas Gulf Coast.

The pipeline, a joint venture between Kinder Morgan and Targa Resources, was fully subscribed under long-term contracts, read a news release, and has the capacity to deliver about 2 billion cubic feet per day of incremental natural gas capacity to the refinery and export markets on the Gulf Coast.

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About 447 miles of 42-inch pipeline will comprise the mainline of the project, originating at the Waha Hub near Coyanosa, Texas and terminating at Agua Dulce.

A lateral portion of the line will consist of about 50 miles of 36-inch pipeline and associated compression, transporting natural gas processed at Targa’s facilities in the Midland Basin area to a connection with the mainline.

In total, the project was expected to cost about $1.75 billion, creating about 2,500 construction jobs and 15 full-time positions after construction.

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The blue line represents the path of the mainline of Kinder Morgan's Gulf Coast Express Pipeline.

The Gulf Coast Express could also create about $35 million in tax revenue to state and local governments, the release read.

The added infrastructure could also help alleviate takeaway constraints which threaten prices, said Kinder Morgan Natural Gas Midstream President Sital Mody, while reducing the use of venting and flaring.

“We are pleased to place GCX in service safely and ahead of schedule for our customers, helping to unlock tremendous value for the State of Texas,” he said. “I am very proud of our team’s ability to execute.”

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Mody said more than 3,000 contractors were deployed to the project, with more than 6 million hours worked.

He said the project solidified Kinder Morgan’s position in the booming Permian Basin, expected to continue its growth in production for the foreseeable future.

“With natural gas supplies projected to rise over the next 20 years from supply basins such as the Permian, our strong network of pipelines provides the ability to connect this supply to the growing markets along the Gulf Coast,” Mody said. “We look forward to delivering on additional infrastructure projects in the months to come.”

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Kinder Morgan owns a 34 percent interest in the pipeline and serves as its operator.

Other equity holders include Altus Midstream, DCP Midstream and Targa Resources.

In total, Kinder Morgan owns interest in or operates about 84,000 miles of pipelines and 157 terminals, the release read, transporting natural gas, refined petroleum, crude oil, condensate and carbon dioxide. 

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“Our mission is to provide energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of people, communities and businesses,” read a Kinder Morgan statement. “Our vision is delivering energy to improve lives and create a better world.”

Venting and flaring grew in Texas throughout the last five years, per data from the U.S. Energy Information Administation (EIA).

The EIA’s most recent data showed and increase from 47.5 billion cubic feet of natural gas were vented or flared in 2012, more than doubling to about 101 billion cubic feet in 2017.

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That meant the Lone Star State had the highest volume of vented or flared natural gas in the country, with North Dakota in second at about 88 billion cubic feet in 2017, a growth of just about 10 billion from 2012’s total of 79 billion in 2012.

Wyoming was third at about 9 billion cubic feet of natural gas vented or flared in 2017, a substantial decline from 2012’s total of 45 billion cubic feet of vented or flared natural gas.

New Mexico also saw a decline from about 12 billion cubic feet in 2012 to just about 3 billion in 2017, records show.

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A 2018 report titled “Vast energy resources wasting away in the Texas Permian Basin” from the Environmental Defense Fund called on Permian Basin operators to continue reducing venting and flaring to protect the environment and increase revenue for local communities and state governments.

“As production ramps up in the Permian Basin, now is the time for regulators to take steps to reduce flaring pollution and waste, and create a level playing field for all operators,” the report read. “Reduced flaring is beneficial for the environment and helps preserve our state’s resources.”

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Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.