Kinder Morgan, DCP Midstream and Targa Resources Enter into Letter of Intent to Jointly Develop Pipeline Project

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Kinder Morgan Texas Pipeline LLC, a subsidiary of Kinder Morgan, Inc., DCP Midstream, LP, and an affiliate of Targa Resources Corp. have signed a letter of intent to jointly develop the proposed Gulf Coast Express Pipeline Project, which would provide an outlet for increased natural gas production from the Permian Basin to growing markets along the Texas Gulf Coast. The participation of the three parties involved with the Gulf Coast Express Pipeline Project is subject to negotiation and execution of definitive agreements. As part of the definitive agreements, Targa Resources and DCP Midstream would commit significant volumes to the proposed project, including certain volumes provided by Pioneer Natural Resources Company, a joint owner in Targa Resources’ WestTX Permian Basin system and one of the largest producers in the Permian Basin.

The capacity of the Gulf Coast Express Pipeline Project is expected to be approximately 1.92 billion cubic feet per day and would include a lateral into the Midland Basin, consisting of approximately 50 miles of 36-inch pipeline and associated compression to serve gas processing facilities owned by Targa, along with facilities owned jointly by Targa and Pioneer. The expected in-service date of the pipeline continues to be scheduled for the second half of 2019, pending the timely completion of definitive agreements with shippers and a final investment decision by the three parties. Per the terms of the letter of intent, Kinder Morgan would build, operate and own a 50 percent interest in the project, with DCP Midstream and Targa Resources each holding a 25 percent interest.

“We are thrilled to have Targa join DCP Midstream and Kinder Morgan in developing the project and to add both Targa and Pioneer as major customers on the proposed system,” said Kinder Morgan Natural Gas Midstream President Duane Kokinda. “With DCP Midstream and Targa, we now have two of the premier gathering and processing supply aggregators in the Permian Basin on board, as well as one of the Basin’s largest producers with Pioneer. The commitments of these parties confirm our premise that combining supply source optionality in the Basin with unparalleled market access on the Agua Dulce end provides an attractive takeaway solution for the parties developing natural resources in the Permian Basin.”

It is anticipated that natural gas supply will be sourced into the project from multiple locations, including existing receipt points along Kinder Morgan’s Texas Pipeline and El Paso Natural Gas pipeline systems in the Permian Basin, a proposed interconnection with the Trans-Pecos Pipeline, and additional interconnections to both intrastate and interstate pipeline systems in the Waha area. Deliveries of natural gas into the Agua Dulce area will include points into Kinder Morgan’s existing Gulf Coast network, intrastate affiliates (KM Tejas and KM Border pipelines), the Valley Crossing pipeline, the NET Mexico header, and multiple other intrastate and interstate natural gas pipelines.

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