Kinder Morgan’s $2 billion Permian Highway natural gas pipeline became operational this week as the company said it is fully subscribed under long-term contracts.
The line entered full service on Jan. 1 carrying natural gas from the Permian Basin to the Gulf Coast, although gas had been flowing on weeks on the line during the commissioning process.
Kinder Morgan said the line provides about 2.1 billion cubic feet a day of capacity and helps reducing the flaring in the Permian. It is the latest natural gas line to become operational as the oil and gas industry seeks to ease the amount of flaring in the Permian, a situation in part caused by the lack of natural gas transportation to the Gulf Coast.
The lack of natural gas pipelines in the Permian resulted in negative natural gas prices at the Waha last year and in 2019, a situation in which some producers actually paid others to take their gas.
The owners of the new pipeline include units of Kinder Morgan , EagleClaw Midstream and Altus Midstream. Each owns 26.7% while an affiliate of an anchor shipper has 20% ownership.