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Kinder Morgan takes another step to expand Permian gas lines

May 17 (Reuters) – Kinder Morgan Inc (KMI.N) has added another project to the list of proposed pipelines aimed at moving increasing amounts of natural gas from the Permian shale to Texas with its announced opening season for expansion from the Gulf Coast Express pipe to Texas.

If the solicitation generates enough interest, Kinder said in a statement Monday that Gulf Coast Express would increase the pipe’s capacity by nearly 0.570 billion cubic feet per day (bcfd).

The opening season for the Gulf Coast Express expansion follows another opening season by Kinder in April to expand the Permian Highway gas line by nearly 0.650 bcfd.

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One billion cubic feet is enough gas for about 5 million American homes.

The Permian in western Texas and eastern New Mexico is the largest shale oil producing basin in the United States.

Energy companies have increased their drilling activity in the Permian in recent months as oil prices surged above $100 a barrel. This oil comes out of the ground with a lot of gas, called associated gas.

With Permian associated gas production also rapidly increasing and demand for gas from new liquefied natural gas export plants on the Gulf Coast, several companies are looking to add new gas lines to the region, including power units. ‘Energy Transfer LP (ET.N) and MPLX LP (MPLX.N). Read more

Kinder said the Gulf Coast Express project will primarily involve compression expansions to increase Permian gas deliveries to South Texas markets.

Pending customer commitments, Kinder said the target commissioning date for the Gulf Coast Express project is December 1, 2023.

The commissioning date of the Permian road project is October 1, 2023.

Gulf Coast Express is operated by Kinder’s Texas Pipeline subsidiary and is jointly owned by units of Kinder (34%), DCP Midstream LP (DCP.N) (25%), ArcLight Capital Partners LLC (25%) and Kinetik Holdings Inc (KNTK.O) (16%).

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Reporting by Scott DiSavino Editing by Marguerita Choy

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