Kinder Morgan Texas Pipeline LLC (KMTP), a subsidiary of Kinder Morgan, Inc.; EagleClaw Midstream Ventures, LLC, a portfolio company of Blackstone Energy Partners; and Apache Corporation announced that Exxon Mobil Corporation has signed a letter of intent to support the proposed Permian Highway Pipeline Project (PHP Project).

The approximately $2-billion PHP Project will provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast and is designed to transport up to 2 billion cubic feet per day (Bcf/d) of natural gas through approximately 430 miles of 42-inch pipeline from the Waha to Katy, Texas, areas, with connections to the US Gulf Coast and Mexico markets. The PHP Project is expected to be in service in late 2020, subject to the execution of definitive agreements and the receipt of construction permits.

Under the letter of intent, ExxonMobil subsidiary XTO Energy may contract for up to 450,000 dekatherms per day (Dth/d) of capacity on the pipeline.

(A dekatherm (Dth) is a unit of energy used primarily to measure natural gas, developed in about 1972 by the Texas Eastern Transmission Corporation. A dekatherm is equal to 10 therms or 1,000,000 British thermal units (MMBtu) or 1.055 GJ. 450,000 dekatherms is equivalent to approximately 450 million cubic feet of natural gas.)

As previously announced, KMTP and EagleClaw will be the initial partners, each with a 50% ownership interest in the project. Apache and EagleClaw will both be significant shippers on the proposed pipeline, with each entity planning to commit up to 500,000 Dth/d to the project. Apache will also have the option to acquire equity from the initial partners. KMTP will build and operate the pipeline.