Kinder Morgan's TGP System Aims to Improve Sourcing, Add Capacity Along Gulf Coast

Researched by Industrial Info Resources (Sugar Land, Texas)--Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) is planning to reduce methane emissions at its Tennessee Gas Pipeline (TGP) subsidiary through "responsibly sourced" natural gas. The midstream giant announced a strategic agreement with Southwestern Energy Company (NYSE:SWN) (Houston) in which it will receive and transport the gas to markets in the Northeast via the TGP system. Industrial Info is tracking about $11.5 billion in active Kinder Morgan projects, nearly all of which are located in states serviced by TGP.

In a press release, Kinder Morgan defined "responsibly sourced" gas as "natural gas that has been produced from a natural gas well and transported by companies whose operations have been independently verified as meeting certain environmental, social and governance standards, particularly related to methane emission reductions." Those standards are set by ONE Future Coalition, a group of 50 natural gas companies working to reduce methane emissions across their value chains.

ONE Future coalition aims to achieve a 1% or lower methane intensity level, or 99% methane efficiency, by 2025, according to Kinder Morgan.

Click on the image at right for a graph detailing active projects associated with TGP, by project type.

The deal with Southwestern follows criticism from environmental advocates surrounding Kinder Morgan's proposed Evangeline Pass Expansion Project on part of the TGP system. TGP and Southern Natural Gas Company LLC, a Kinder Morgan subsidiary based in states along the U.S. Gulf Coast, plan to add up to 2 billion cubic feet per day of additional natural gas capacity on Kinder Morgan's systems in Louisiana and Mississippi. Major components of the project include:

• a pipeline lateral in St. Bernard Parish, Louisiana, that will add 9.1 miles of 36-inch diameter pipeline; see project report
• a pipeline loop in Plaquemines Parish, Louisiana, that will add four miles of 36-inch pipeline; see project report
• construction of the Rose Hill Compressor Station near Quitman, Mississippi, which will include a pair of turbine-driven compressor gas packages; see project report
• construction of Compressor Station 529 near Chalmette, Louisiana, which will include a single turbine-driven compressor gas package; see project report

Earlier this year, the U.S. Federal Energy Regulatory Commission (FERC) surprised many players and observers in the pipeline industry by directly attempting to assess the Evangeline Pass Expansion's potential to worsen climate change, a first for the federal agency. Although FERC ultimately approved the project, saying it could not determine whether its emissions would exceed acceptable levels, it acknowledged the project "would increase the atmospheric concentration of greenhouse gases, in combination with past and future emissions from all other sources, and would contribute to climate change," according a draft statement issued in July.

Southern Natural Gas Company already is at work on a series of modifications to its compressor station in Bay Springs, Mississippi. TGP is seeking permits for a series of modifications to five of its own compressor stations. Subscribers can learn more from Industrial Info's project report on the Bay Springs station, or see a full list of proposed TGP modifications.

TGP also is seeking a series of unit additions and modifications to compressor stations as part of its East 300 Upgrade Project, which is designed to increase natural gas capacity on the existing TGP pipeline system by 115 million standard cubic feet per day. Affected stations include:

• Libertyville Station in Sussex, New Jersey; see project report
• West Milford Station in Paterson, New Jersey; see project report
• West Clifford Station in Union Dale, Pennsylvania; see project report
• Pigeon Station in Marienville, Pennsylvania; see project report

The East 300 project would most directly benefit Consolidated Edison Company of New York, a subsidiary of Consolidated Edison Incorporated (NYSE:ED) (New York, New York), as it would provide more gas to New York state. But some elected officials in New Jersey and Pennsylvania, as well as organizations such as the New Jersey Sierra Club, have voiced opposition due to concerns over respiratory risks, chemical emissions and other factors, according to NorthJersey.com.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.