Natural gas is moving through two new metered interconnects on Kinder Morgan’s Gulf Coast Express pipeline near Agua Dulce hub in south Texas. Natural Gas Intelligence said June 16 it’s “the clearest sign yet that the 570 million cfd expansion is starting up on schedule and easing a glutted Permian Basin.” The 497-mile GCX pipeline – jointly owned by Kinder Morgan subsidiaries and affiliates of ArcLight Capital Partners – transports 2.55 billion-to-2.57 billion cubic feet of natural gas per day from Coyanosa in west Texas to Agua Dulce.
The $455 million expansion project involves only compression additions rather than new pipelines, and it addresses a bottleneck in Permian Basin by providing additional eastbound egress from Waha hub to south Texas. Permian continues to see rapid growth in associated gas growth, but takeaway capacity struggled to keep pace. After Kinder Morgan announced its Permian gas egress expansion project had reached service, market observers noted an immediate positive reaction in Permian cash prices. GCX expansion allows producers to monetize associated natural gas rather than flare or curtail it.
Agua Dulce is a key hub feeding multiple LNG export terminals, including Brownsville, Corpus Christi and Port Arthur, and it helps satisfy rising domestic power generation needs in Texas.
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