Texas Court Clears Path for Kinder Morgan's Permian Highway Pipeline

HOUSTON (P&GJ) - A lawsuit challenging Texas' pipeline approval process was dismissed by a Travis County District Court judge, clearing the way for Kinder Morgan to continue its construction of a $2 billion natural gas pipeline from the Permian Basin to the Gulf Coast.

The lawsuit, which was brought by a group of landowners seeking to halt construction of Kinder Morgan's Permian Highway Pipeline (PHP) project, challenged a state licensing process that lets pipeline companies determine their own routes and acquire land without landowners' consent.

Judge Lora Livingston wrote Tuesday that the Texas Railroad Commission is not required to set standards for pipeline routes or the use of eminent domain to take private land for public good, as allowed under state law for operators that qualify as utilities.

"The court finds no authority for the proposition that the legislature has granted authority to the Commission to oversee the rights granted," she wrote.

Houston-based Kinder Morgan, which held that the eminent domain process is essential to ensuring no single landowner can block critical infrastructure, cheered the ruling.

"The court’s finding validates the process established in Texas for the development of natural gas utility projects, as well as the steps we have taken to comply with that process. We will continue to engage all stakeholders as we work to complete PHP.”

The $2 billion Permian Highway project will provide needed natural gas takeaway capacity to allow further development of the Permian Basin.

"Throughout its development, the route has been carefully evaluated to minimize potential impacts to the environment and landowners, while also being cost-effective and constructible," Kinder Morgan said.

Upon completion, Permian Highway will transport up to 2.1 Bcf/d of dry natural gas through approximately 430 miles of 42-inch pipeline from the Waha, Texas area to the Katy, Texas area, Texas Gulf Coast markets, and Hill Country area.

Kinder Morgan said the project is expected to provide almost $1 billion in additional revenue each year to the state of Texas and its counties to support local schools, first responders and other vital needs. Additionally, individual leaseholders are projected to receive more than $2 billion per year in new oil and natural gas royalties.

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