Kinder Morgan to move ahead with Texas natural gas pipeline expansion

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The headquarters of U.S. energy exporter and pipeline operator Kinder Morgan Inc. is seen in Houston, Texas, U.S. September 27, 2020. REUTERS/Gary McWilliams

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HOUSTON, June 29 (Reuters) - Pipeline operator Kinder Morgan Inc (KMI.N) gave the greenlight to financing expanded capacity on a natural gas pipeline that brings fuel from fields in west Texas to export hubs near Houston, the company said on Wednesday.

The expansion comes as several new liquefied natural gas (LNG) processing plants have been proposed along the U.S. Gulf Coast to meet rising demand in Europe and Asia. The proposed LNG plants would require about 3.1 billion cubic feet per day of new gas supply.

The 428-mile (689-km) Permian Highway Pipeline, owned by Kinder Morgan, Kinetik Holdings and Exxon Mobil (XOM.N), now carries 2.1 billion cubic feet per day (cfd) from the Permian Basin of west Texas and New Mexico.

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The expansion would add 550 million cfd with the higher capacity available starting in November, 2023, Kinder Morgan said. The project still requires approvals and permitting.

"The project will alleviate transportation constraints out of the Permian Basin," said Sital Mody, president of Kinder Morgan's natural gas midstream business.

A separate gas pipeline expansion that carries natural gas from the Permian Basin to points along the south Texas coast, remains under consideration, a spokesperson said. That project, called the Gulf Coast Express (GCX) expansion, would add nearly 570 million cfd to existing capacity.

GCX is owned by Kinder Morgan, ArcLight Capital and DCP Midstream (DCP.N) and delivers gas to hubs outside Corpus Christi, Texas.

(This story corrects pipeline capacity to 2.1 bln cubic feet, from 1.2 bln in paragraph three)

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Reporting by Gary McWilliams; editing by Richard Pullin

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