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Kinder Morgan, DCP Midstream, & Targa Sign LOI to Jointly Develop Gulf Coast Express Pipeline Project

Kinder Morgan, Inc., October 5, 2017

Kinder Morgan Texas Pipeline LLC (KMTP), a subsidiary of Kinder Morgan, Inc., DCP Midstream, LP (DCP Midstream), and an affiliate of Targa Resources Corp. (Targa) have signed a letter of intent with respect to the joint development of the proposed Gulf Coast Express Pipeline Project (GCX 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 GCX Project is subject to negotiation and execution of definitive agreements among KMTP, DCP Midstream and Targa. As part of the definitive agreements, Targa and DCP Midstream would commit significant volumes to the proposed project, including certain volumes provided by Pioneer Natural Resources Company (Pioneer), a joint owner in Targa’s WestTX Permian Basin system and one of the largest producers in the Permian Basin.

The capacity of the GCX Project is expected to be approximately 1.92 billion cubic feet per day (Bcf/d) 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, as well as 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, KMI would build, operate and own a 50 percent interest in the GCX Project, and DCP Midstream and Targa would each hold a 25 percent equity interest in the project.

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.

We are excited to have the opportunity to expand our portfolio of integrated assets and customer offerings in the Permian which would complement our Sand Hills expansions,” said Wouter van Kempen, chairman, president and CEO of DCP Midstream. “This is a strong collaboration of players that draws upon our combined capabilities to provide a competitive and capital efficient solution to the industry.

We are excited to be joining KMI and DCP Midstream in the development of the GCX Project. Given our significant Permian Basin footprint, continuing to provide our customers with flexibility and access to premier markets is always our focus, and we believe that the GCX Project would further enhance those capabilities,” said Joe Bob Perkins, CEO of Targa.

It is anticipated that natural gas supply would be sourced into the project from multiple locations, including existing receipt points along KMI’s KMTP 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 would include points into KMTP’s existing Gulf Coast network, KMI-owned 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.

About Kinder Morgan

Kinder Morgan, Inc. is one of the largest energy infrastructure companies in North America. It owns an interest in or operates approximately 84,000 miles of pipelines and 155 terminals. KMI’s pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2 and other products, and its terminals transload and store petroleum products, ethanol and chemicals, and handle products such as steel, coal and petroleum coke. It is also a leading producer of CO2 that we and others use for enhanced oil recovery projects primarily in the Permian basin. For more information please visit www.kindermorgan.com.

About DCP Midstream

DCP Midstream, LP is a midstream master limited partnership, with a diversified portfolio of assets, engaged in the business of gathering, compressing, treating, processing, transporting, storing and selling natural gas; producing, fractionating, transporting, storing and selling NGLs and recovering and selling condensate. DCP owns and operates more than 60 plants and 64,000 miles of natural gas and natural gas liquids pipelines, with operations in 17 states across major producing regions and leads the midstream segment as the largest natural gas liquids producer, the largest natural gas processor and one of the largest marketers in the U.S. Denver, Colorado based DCP is managed by its general partner, DCP Midstream GP, LP, which is managed by its general partner, DCP Midstream GP, LLC, which is 100% owned by DCP Midstream, LLC. DCP Midstream, LLC is a joint venture between Phillips 66 and Enbridge. For more information, please visit www.dcpmidstream.com.

About Targa Resources

Targa Resources Corp. is a leading provider of midstream services and is one of the largest independent midstream energy companies in North America. Targa owns, operates, acquires, and develops a diversified portfolio of complementary midstream energy assets. The Company is primarily engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting, and selling NGLs and NGL products, including services to LPG exporters; gathering, storing, and terminaling crude oil; storing, terminaling, and selling refined petroleum products. For more information, please visit www.targaresources.com.


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