Kinder Morgan joins DCP Midstream on Permian pipeline project

Houston’s Kinder Morgan said it’s partnering with DCP Midstream on plans to build a 430-mile natural gas pipeline from West Texas’ Permian Basin to the Corpus Christi region.

Although the details and financial information aren’t being revealed, DCP Midstream will serve as partner and customer on the Gulf Coast Express Pipeline to move natural gas liquids from the booming Permian Basin. Kinder Morgan will build and operate the pipeline.

DCP was founded by Houston companies Phillips 66 and Spectra Energy. However, Canada’s Enbridge acquired Spectra this year, so Enbridge now owns DCP with Phillips 66. DCP holds a sizable natural gas liquids production and processing footprint in West Texas.

The pipeline project is designed to take advantage of increasing Permian oil and gas production to carry more gas to the Texas Gulf Coast, where it can be consumed locally, refined and exported, or shipped to Mexico. The 42-inch pipeline, which could be completed in late 2019, would specifically trek from Waha, Texas, to Agua Dulce, west of Corpus Christi.

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Although everyone in the Permian is drilling for oil, most of the wells drilled also produce associated natural gas liquids. That extra gas is why producers don’t need to drill specifically for gas in West Texas.

The proposed project can tap into Kinder Morgan’s existing Permian-area pipeline network, as well as Dallas-based Energy Transfer Partners’ new Trans-Pecos Pipeline, which will ship gas from West Texas to Mexico.

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