Khan raced out of the blocks at the Oceanico Victoria course in the Algarve with three birdies in the first four holes and also birdied the last two to reach 13-under 131 for the tournament.
“I started great, birdied the first two holes and that settled me down quickly,” Khan said. “I think that you have to be positive around this course. If the wind gets up a little bit, it can be a little bit more testing.”
The 219th-ranked Khan has twice won European Tour events but has had a fitful season so far, his best finish being a fifth place in France in July.
“It’s not been a brilliant year overall, but I always feel good coming around this course and enjoy playing in Portugal,” Khan said. “I think the thing is to enjoy the position I’m in and enjoy the pressure – hopefully I’m leading – and carry that on into the weekend.”
Davies signed for a 67 including seven birdies and two bogeys to back up his opening-round 65, with Aguilar carding a 66 and Kingston shooting 68 to join the Welshman on 12 under.
Germany’s Martin Kaymer, the top-ranked player in the tournament at No. 6, stayed in touch with a 68 to lie 9 under, four shots off the lead.
“Overall, I’m happy,” Kaymer said. “You can shoot very, very low here, but it’s about making the putts. If I can make more of those then I have a chance.”