Earlier today Kinder Morgan Texas Pipeline LLC (KMTP), DCP Midstream, LP (Ticker: DCP) and an affiliate of Targa Resources Corporation (Ticker: TRGP) announced a final investment decision (FID) to proceed with the Gulf Coast Express Pipeline Project (GCX Project).
The companies executed definitive joint venture agreements and also secured sufficient firm transportation agreements with shippers. Roughly 85% of the project capacity is subscribed and committed under long-term, binding transportation agreements, and the partners plan to have the remaining capacity subscribed in early 2018.
Kinder Morgan Texas Pipeline will build, operate and own 50% interest in the project, while DCP Midstream and Targa will each hold a 25% equity interest in the project.
400+ miles of takeaway
The pipeline will cost approximately $1.7 billion to construct and will be have a flow capacity of 1.92 Bcf/d of natural gas. The Mainline project portion will include will include 82 miles of 36 inch pipeline and 365 miles of 42 inch pipeline, which will originate at the Waha Hub near Coyanosa, Texas and terminate near Augu Dulce, Texas. In addition to the Mainline project, the Midland Lateral project portion consists of approximately 50 miles of 36-inch pipeline and associated compression, which connects with the Mainline.
The pipeline is projected to be completed and in service by October of 2019, pending the receipt of necessary regulatory approvals.
Shippers
A few of the shippers included in the project are DCP midstream, Targa, Apache Corporation, and Poineer Natural Resources Company. Kinder Morgan Texas Pipeline also has committed volumes that are backstopped by a long-term purchase agreement that locks in the equivalent transport fee on the pipeline.
Apache Corporation secured 500 MMcf/d of natural gas transport capacity via the GCX Project. As a substantial shipper to the GCX Project, Apache also secured the option to purchase a 15% equity stake in the pipeline from Kinder Morgan.
Source: Targa Resources
