Three big Permian pipeline projects are underway, with one operable this October, demand to move product is high and at least one more is likely in the cards
While the Whistler gas pipeline project is getting underway and Kinder Morgan moves ahead with its Permian Highway Pipeline (PHP), there may be more pipeline plans on the way.
Kinder Morgan CEO Steve Kean indicated in its first quarter financial results conference call that the pipelines underway may not actually satisfy the need for Permian Basin takeaway.
“If you look at the projections, they would show you that a GCX a year almost is what’s required in order to satisfy the need for takeaway capacity and to unlock the value of the other commodities out of the Permian.
“I don’t know that it’s going to be anything like that pace or that it’s going to be at that pace.
“But there’s certainly interest already in Phase 3.
“There’s nothing to announce, and of course it’s not in the backlog because we’re not under contract or anything, but the demand to get out of the Permian continues to grow and the desire to be able to unlock the value that’s in oil and the NGLs, as well as the natural gas, continues to put pressure on the need for additional takeaway capacity.”
NASDAQ analysis indicates a need for another Permian pipeline no sooner than 2022, and while Kinder Morgan may have ideas about an unannounced pipeline, LNG developer Tellurian has proposed the Permian-to-Lousiana Permian Global Access natural gas pipeline with a more than 2 Bcf/d capacity that could start in 2023.
Meanwhile midstreamer MPLX and its partners are moving forward with the Whistler Pipeline Project to move gas from the Permian to the Texas Gulf Coast, a project that was set to go online next year, but has been moving too slowly to keep that deadline.
Initially including Targa Resources, NextEra Energy, WhiteWater Midstream and Ridgemont Energy Partners; MPLX has seen two of those partners drop out and is now working with three privately-held companies to partner in the venture going forward.
The pipeline isn’t filled yet, but new takeaway contracts are expected in the next few months.
And Kinder Morgan continues with partner ExxonMobil to work on the PHP, due to go online next year, and KM’s Gulf Coast Express, which could be online as soon as this October.