Houston-based Kinder Morgan said this week its $2 billion Permian Highway natural gas pipeline from Permian Basin to Katy entered full service Jan. 1. Gas has been flowing for weeks during the commissioning process. Energy traders told Reuters those flows boosted prices recently at Waha hub in west Texas. Kinder Morgan said Monday that Permian Highway is fully subscribed with long-term contracts. It provides capacity of about 2.1 billion cubic feet per day through 430 miles of pipe to also help reduce flaring.
“Permian is the biggest U.S. production area for crude oil and the second biggest for gas,” Reuters said. “Drillers in the Permian are seeking oil, which comes out of the ground with a lot of gas. Producers have burned or flared record amounts of gas in recent years due to a lack of pipeline capacity. That lack of capacity caused prices at the Waha to turn negative several times in 2019 and 2020, which means some producers paid others to take their gas.”
Kinder Morgan Texas Pipeline, subsidiary of KMI, operates the pipeline and with EagleClaw Midstream and Altus Midstream owns 26.7 percent each. An affiliate of an anchor shipper owns the other 20 percent.