Kinder Morgan announces $1 billion carbon dioxide expansion

HOUSTON — Kinder Morgan Energy Partners will spend about $1 billion as part of an effort to expand its enhanced oil recovery program in the Permian Basin.

The company plans to build a 213-mile, 16-inch diameter pipeline from Apache County, Ariz. to Torrance County, N.M. that will transport carbon dioxide to be used for projects owned by Kinder Morgan and others in the Permian Basin.

By sending carbon dioxide underground into reservoirs, producers can increase the amount of crude they recover because the gas expands and pushes additional oil to the well-bore.

The pipeline itself will cost about $300 million. The other $700 million will be used to drill wells at Kinder Morgan’s carbon dioxide field in Arizona.

Company officials say the project will likely be in service by the third quarter of 2016, though it’s still awaiting regulatory approvals. Jim Wuerth, president of the company’s carbon dioxide group, said the company believes in the future of enhanced oil recovery technology.

‘The project will help address the market’s growing demand for (carbon dioxide) and enable Permian Basin producers to increase oil production by using the product in EOR projects,” he said in a statement.

The pipeline project will employ 1,200 contractors during construction, the company said.