Kinder Morgan Texas Pipeline (KMTP), DCP Midstream and an affiliate of Targa Resources have signed a letter of intent (LoI) for the joint development of Gulf Coast Express pipeline project.
As per the terms, Kinder Morgan will build and operate the GCX Project with a stake of 50%. DCP Midstream and Targa on the other hand would have a stake of 25% each.
For DCP Midstream, the partnership will help expand its portfolio of integrated assets and customer offerings in the Permian Basin to complement its Sand Hills expansions.
On the other hand, Targa is expected to enhance its capabilities of providing its customers with flexibility and access to premier markets through its Permian Basin footprint.
Expected to have a capacity of around 1.92 billion cubic feet per day (Bcf/d), the GCX Project will have a lateral into the Midland Basin. The lateral, in turn, will be made up of a 36inch pipeline of 80km length along with Targa-owned associated compression to serve gas processing facilities and facilities owned jointly by Pioneer and Targa.
According to the partners, the 42inch pipeline is expected to be operational in the second half of 2019. It will be subject to completion of shippers’ agreements and a final investment decision by the partners.
Kinder Morgan natural gas midstream president Duane Kokinda said: “With DCP Midstream and Targa, we now have two of the premier gathering and processing supply aggregators in the Permian Basin on board, as well as one of the Basin’s largest producers with Pioneer.
“The commitments of these parties confirm our premise that combining supply source optionality in the Basin with unparalleled market access on the Agua Dulce end provides an attractive takeaway solution for the parties developing natural resources in the Permian Basin.”