The Gulf Coast Express pipeline, a highly anticipated conduit for moving stranded natural gas out of the prolific US Permian basin, entered service on Wednesday.
With capacity for 2 billion cubic feet per day, the project is set to relieve takeaway constraints and reduce flaring, operator Kinder Morgan said.
“We are pleased to place GCX in service safely and ahead of schedule for our customers, helping to unlock tremendous value for the State of Texas," said Sital Mody, Kinder Morgan natural gas midstream president.
"We had over 3000 contractors deployed at times and more than six million contractor hours worked – all without a major safety incident during the construction phases of the project."
Kinder Morgan has a 34% share in GCX, with other equity holders including Altus Midstream, DCP Midstream and an affiliate of Targa Resources.
"With natural gas supplies projected to rise over the next 20 years from supply basins such as the Permian, our strong network of pipelines provides the ability to connect this supply to the growing markets along the Gulf Coast," Mody said.
"We look forward to delivering on additional infrastructure projects in the months to come."
The new pipeline is expected to finally help underpin stronger pricing for producers in the Permian, who have been forced with contend with rock-bottom and sometimes even negative pricing at the Waha hub.
"GCX will provide much-needed additional natural gas take-away pipeline capacity in the Permian region of western Texas and southeastern New Mexico," the US Energy Information Administration said regarding the region's gas price outlook.
In addition to Gulf Coast Express, a number of new pipelines are expected to come on line in the next few years to ease bottlenecks in the Permian.
Kinder Morgan plans two other 2 billion cfd projects and a consortium including private players MPLX and WhiteWater Midstream recently sanctioned their own 2 billion cfd pipeline out of the Permian.
