Kinder Morgan and EagleClaw Authorize $2 Billion Permian Highway Pipeline

Kinder Morgan and Midland-based EagleClaw Midstream said they’ve authorized the proposed $2 billion Permian Highway Pipeline project to transport natural gas from West Texas to Houston and other hubs.

Exxon Mobil and Houston-based Apache Corp are both major customers of the project. Apache Corp also has the option of buying a one-third stake in the pipeline through its proposed spinoff company, Atlus Midstream. Kinder Morgan and EagleClaw are currently 50-50 partners.

"With the continued growth in drilling activity in the Permian Basin, this project will help to provide key infrastructure for producers to move natural gas to the best premium markets along the Gulf Coast and South Texas," said EagleClaw President Jamie Welch.

The PHP Project will serve as an additional outlet for the increase in natural gas production that links the Permian Basin to the growing markets that stretch across the Texas Gulf Coast.

The project would transport a maximum of 2 billion ft^3/d of natural gas that crosses 430 miles of 42-inch pipeline from the Waha, Texas area to US Gulf Coast and Mexico markets.

Kinder Morgan is also looking at the feasibility of a 48-inch pipeline to increase transportation capacity. 

The project is expected to be in service in late 2020.

Source:
Reuters

 

EagleClaw Midstream To Pay $950 Million to Buy Rival Caprock

Blackstone-backed pipeline company EagleClaw Midstream Ventures LLC said on Wednesday it would buy rival Caprock Midstream Holdings for about $950 million.

Midstream companies are investing in the Permian Basin as a surge of oil and gas production has outstripped transport capacity.

EagleClaw will buy Caprock from Dallas-based private equity firm Energy Spectrum Capital and Caprock Midstream Management.

Caprock will be renamed to EagleClaw Midstream II and operate as a sister entity to EagleClaw after the deal closes this year.

EagleClaw Midstream is a portfolio company of Blackstone Energy Partners, Blackstone’s energy-focused private equity business.

Source:
Reuters

Kinder Morgan Adds Exxon Mobil as Major Customer for Permian Highway Pipeline

Kinder Morgan has added on Exxon Mobil as a major customer for its planned $2 billion Permian Highway Pipeline that will carry natural gas from West Texas to the Houston region.

Exxon is looking for more outlets to transport its natural gas from the rapidly increasing Permian Basin production. A lot of valuable associated gas comes out of the Permian despite crude oil being the main focus of production.

Kinder Morgan proposed the Permian Highway Pipeline project in June as they partnered with Midland-based EagleClaw Midstream. Eagle claw is financially backed by the private equity giant Blackstone Group out of New York.

The goal is to have the pipeline open by the end of 2020. Route details are still being finalized, but the main uses for the project include supplying gas for electricity generation in Texas and Mexico as well as supplying new liquefied natural gas export complexes currently under construction in Freeport and Corpus Christi.

Source:
Houston Chronicle

Investor Blackstone to Purchase Pipeline Assets in Permian for $2 Billion

Leading investment firm Blackstone Group will acquire pipeline company EagleClaw Midstream Ventures for approximately $2 billion, joining the rise of pipeline buyers in the booming Permian Basin.

In the transaction expected to close by end of July, Blackstone will acquire more than 375 miles of natural gas pipelines from EagleClaw, the largest privately held midstream operator in the Permian's Delaware Basin.

EagleClaw will keep its name and leading staff under the purchase and will operate as a Blackstone portfolio company.

“As we begin a new chapter, we will continue to deliver the same outstanding level of service our customers expect while we work with Blackstone to deploy additional capital and to expand our footprint in the Delaware Basin," said EagleClaw President and CEO Bob Milam.

"Blackstone has a deep understanding of the compelling fundamentals of the upstream and midstream economics in the Permian, an outstanding reputation as an investor in the energy sector and the scale to take EagleClaw to the next level. We are proud to have their support and look forward to a long and successful relationship," Milam added in a statement.

The Permian Basin is seeing a significant increase in activity and investment due to rising oil prices. According to Baker Hughes, the total number of rigs drilling in the Permian rose to 339 last week, which is the most it has been in more than two years.

Source:
Bloomberg
Blackstone Group