Kinder Morgan Moves Ahead with the Gulf Coast Express Pipeline



Gulf Coast Express Pipeline project

On December 21, 2017, Kinder Morgan (KMI), DCP Midstream (DCP), and Targa Resources (TRGP) announced an FID (final investment decision) to proceed with the Gulf Coast Express Pipeline project. Nearly 85% of the project’s capacity is subscribed under long-term transportation agreements. The company expects the remaining capacity to be subscribed by early 2018.

Shippers committed to the project include DCP Midstream, Targa Resources, Apache (APA), and Pioneer Natural Resources (PXD). Kinder Morgan Texas Pipeline LLC, a subsidiary of Kinder Morgan, has also committed volumes on the project.

The project

The Gulf Coast Express Pipeline project is expected to cost ~$1.7 billion. The project is designed to transport 1.9 Bcf/d (billion cubic feet per day) of natural gas from the Waha Hub near Coyanosa, Texas, in the Permian Basin to near Agua Dulce, Texas. The project is expected to be complete in late 2019.

Kinder Morgan will build, operate, and own a 50% interest in the project. DCP Midstream and Targa Resources will each hold 25% interest in the project. Apache has an option to purchase up to a 15% stake in the project from Kinder Morgan.

“We are excited to be moving forward on this much-needed infrastructure project, with construction planned to commence in the first quarter of 2018,” said Kinder Morgan Natural Gas Midstream President Duane Kokinda.

Kinder Morgan last week

Kinder Morgan rose 0.7% in the week ending December 22, 2017. The stock rose 1.7% on Thursday—the day that the FID on the Gulf Coast Express Pipeline project was announced. The SPDR S&P 500 ETF (SPY) (SPX-INDEX) rose 0.4% last week.

Crude oil prices rose 2% last week. To learn more about latest factors impacting crude oil, read Bullish Drivers Could Support Crude Oil Futures Next Week.

Next, we’ll discuss what Kinder Morgan’s moving averages indicate about its expected short-term performance.

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