Kinder Morgan is now considering expanding capacity on its El Paso Natural Gas line in west Texas by 500mn cf/d (14mn m³/d), more than three times the minimum amount announced by the company earlier this year.
The midstream company in April said it was seeking firm transportation commitments for about 150mn cf/d of existing capacity on the El Paso line through a binding open season, and that it would consider expanding capacity by about 900mn cf/d if there was enough market interest. The expansion would boost flows to the Waha hub in west Texas and could supply gas to the company's proposed 1.6 Bcf/d Gulf Coast Express pipeline.
Kinder Morgan has received some "significant volume opportunities" for expansions on the El Paso line, with capacity totaling about 500mn cf/d on one of its open seasons, chief executive Steve Kean said during an earnings call yesterday.
Kean said the expansions would likely require installing relatively little new infrastructure, such as back pressure valves and additional meters, meaning they would not take "a significant amount of capital" to put in place.
The El Paso line primarily moves gas from Texas to markets farther west, but the company could boost its capacity in the other direction. This would give producers in parts of Texas and southeastern New Mexico more access to Waha intrastate pipeline connections, such as Energy Transfer's 1.4 Bcf/d Trans-Pecos pipeline, Kinder Morgan's Texas system and the Gulf Coast Express line.
Kean said the company is making progress on Gulf Coast Express but has not yet put that line into the company's official backlog, or project queue.
The Gulf Coast Express and El Paso Natural Gas expansions would provide increased takeaway capacity amid a drilling boom in the Permian basin. The increased flows could help feed rising demand from Mexico and LNG exports.
