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Released July 19, 2019 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--In a conference call on Wednesday, executives at Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) said the company had added about $400 million in projects to its backlog in the second quarter, bringing it to $5.7 billion. In addition to two natural gas pipelines in the Permian Basin that are in development, Kinder Morgan is considering adding a third and is making progress on its liquefied natural gas (LNG) facilities. In the conference call, Chief Executive Officer Steve Kean gave an update on these projects.
Kean said, "Our customers are anxious to have us get their gas out of the Permian so they can get their oil and NGLs [natural gas liquids] out as well. We got two projects to get the gas out, Gulf Coast Express (GCX) and Permian Highway, and we are in discussions on a possible third pipeline, which we're calling Permian Pass. GCX and Permian Highway are each about 2 billion [cubic] feet a day (Bcf/d) of capacity. Both are secured by long-term contracts, and both are in the execution stage."
The Gulf Coast Express Pipeline will move gas from the Permian to the Agua Dulce, Texas, area. While originally the pipeline was to have been at full capacity by October 1 of this year, Kean said it was slightly ahead of schedule and would begin moving the full 2 Bcf/d in the last 10 days to one week of September. "The pipe is in the ground, there is still commissioning work going on on the compressor and meter stations, but our expectation is for a slightly early in-service date," said Kean.
Construction on GCX began in the first half of 2018, and the pipeline is already fully subscribed. Committed shippers include DCP Midstream LP (NYSE:DCP) (Denver, Colorado), Targa Resources (NYSE:TRGP) (Houston), Apache Corporation (NYSE:APA) (Houston) and others. Troy Construction LLC (Houston) is the general contractor on the project, which has a total investment value (TIV) of $1.75 billion. For more information, see Industrial Info's project reports on Spread 1, Spread 2, spreads 3 and 4, and the Midland lateral.
The $2 billion, 430-mile Permian Highway Pipeline will move natural gas from the Waha, Texas, area to markets along the U.S. Gulf Coast and in Mexico. Kean said, "Permian Highway is receiving pipe and acquiring right of way. We hired our pipeline and construction firms, and we are on schedule for a completion in October 2020. We had a significant court decision last month, which essentially affirms the existing eminent domain process that has been in use for four decades in the state of Texas." Construction is set to begin later this year, with Troy Construction and Pumpco Incorporated (Giddings, Texas) as the general contractors. For more information, see Industrial Info's project report.
Summing up the progress on both projects, Kean said, "So both of our current projects are on schedule; both projects are at attractive returns; and both projects bring us additional opportunities in our downstream pipelines. Combined, they bring 4 Bcf/d of incremental gas to a system that moves about 5 Bcf/d today."
But the company may not stop there. Keane said, "We are working with customers on a third 2 Bcf/d pipeline--the Permian Pass Pipeline. This is a work in progress. It's not in the backlog at this point, certainly, but it is moving along. These Permian projects show us taking advantage of a very positive situation. There's large supply growth in Texas, and large demand growth in Texas."
Kinder Morgan also is developing two LNG projects, one on Elba Island in Georgia, and one that is just beginning in Mississippi. The Elba Island facility will eventually have 10 liquefaction units. Phase I, which is expected to be completed later this year, includes six units, while Phase II, set to begin construction this year, will add four units, bringing total site capacity to 4 million tons per year. Kean said Kinder Morgan was now complete on four of the units, although startup has been delayed. Kean said, "The cold box on the first unit is now uniformly cold at cryogenic temperatures, and we are ramping up the volume. We are producing LNG. Unevenness in the temperatures between the bottom and the top of the cold box had been plaguing our startup over the last several weeks. We are now past that and ramping up to full service. We expect to be in service on Unit 1 soon, and that unit represents 70% of project revenue. I'd like to be more definitive about the exact in-service date, but it is a function of whether we have to suspend the production of LNG for additional troubleshooting." IHI E&C International Corporation (Houston) is providing engineering, procurement and construction, while Jacobs Engineering Group Incorporated (NYSE:JEC) (Dallas, Texas) is the consultant. Phase II is expected to be completed in early 2021. For more information, see Industrial Info's project reports on Phase I, Phase II and the natural gas pretreatment unit.
Earlier this week, Kinder Morgan received some good news about another project, the Gulf LNG project in Pascagoula, Mississippi. The U.S. Federal Energy Regulatory Commission gave the company permission to construct the project at the site of a former import terminal. The facility will have two liquefaction units with a combined annual production capacity of 11.5 million tons. KBR Incorporated (NYSE:KBR) (Houston) is the engineer on the project, construction of which could begin late next year. The two phases of the project have a combined TIV of $8 billion. For more information, see Industrial Info's project report on Phase I and Phase II.
Kinder Morgan reported second-quarter 2019 net income of $518 million, compared with a net loss of $180 million in the prior-year quarter.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, eight 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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Kean said, "Our customers are anxious to have us get their gas out of the Permian so they can get their oil and NGLs [natural gas liquids] out as well. We got two projects to get the gas out, Gulf Coast Express (GCX) and Permian Highway, and we are in discussions on a possible third pipeline, which we're calling Permian Pass. GCX and Permian Highway are each about 2 billion [cubic] feet a day (Bcf/d) of capacity. Both are secured by long-term contracts, and both are in the execution stage."
The Gulf Coast Express Pipeline will move gas from the Permian to the Agua Dulce, Texas, area. While originally the pipeline was to have been at full capacity by October 1 of this year, Kean said it was slightly ahead of schedule and would begin moving the full 2 Bcf/d in the last 10 days to one week of September. "The pipe is in the ground, there is still commissioning work going on on the compressor and meter stations, but our expectation is for a slightly early in-service date," said Kean.
Construction on GCX began in the first half of 2018, and the pipeline is already fully subscribed. Committed shippers include DCP Midstream LP (NYSE:DCP) (Denver, Colorado), Targa Resources (NYSE:TRGP) (Houston), Apache Corporation (NYSE:APA) (Houston) and others. Troy Construction LLC (Houston) is the general contractor on the project, which has a total investment value (TIV) of $1.75 billion. For more information, see Industrial Info's project reports on Spread 1, Spread 2, spreads 3 and 4, and the Midland lateral.
The $2 billion, 430-mile Permian Highway Pipeline will move natural gas from the Waha, Texas, area to markets along the U.S. Gulf Coast and in Mexico. Kean said, "Permian Highway is receiving pipe and acquiring right of way. We hired our pipeline and construction firms, and we are on schedule for a completion in October 2020. We had a significant court decision last month, which essentially affirms the existing eminent domain process that has been in use for four decades in the state of Texas." Construction is set to begin later this year, with Troy Construction and Pumpco Incorporated (Giddings, Texas) as the general contractors. For more information, see Industrial Info's project report.
Summing up the progress on both projects, Kean said, "So both of our current projects are on schedule; both projects are at attractive returns; and both projects bring us additional opportunities in our downstream pipelines. Combined, they bring 4 Bcf/d of incremental gas to a system that moves about 5 Bcf/d today."
But the company may not stop there. Keane said, "We are working with customers on a third 2 Bcf/d pipeline--the Permian Pass Pipeline. This is a work in progress. It's not in the backlog at this point, certainly, but it is moving along. These Permian projects show us taking advantage of a very positive situation. There's large supply growth in Texas, and large demand growth in Texas."
Kinder Morgan also is developing two LNG projects, one on Elba Island in Georgia, and one that is just beginning in Mississippi. The Elba Island facility will eventually have 10 liquefaction units. Phase I, which is expected to be completed later this year, includes six units, while Phase II, set to begin construction this year, will add four units, bringing total site capacity to 4 million tons per year. Kean said Kinder Morgan was now complete on four of the units, although startup has been delayed. Kean said, "The cold box on the first unit is now uniformly cold at cryogenic temperatures, and we are ramping up the volume. We are producing LNG. Unevenness in the temperatures between the bottom and the top of the cold box had been plaguing our startup over the last several weeks. We are now past that and ramping up to full service. We expect to be in service on Unit 1 soon, and that unit represents 70% of project revenue. I'd like to be more definitive about the exact in-service date, but it is a function of whether we have to suspend the production of LNG for additional troubleshooting." IHI E&C International Corporation (Houston) is providing engineering, procurement and construction, while Jacobs Engineering Group Incorporated (NYSE:JEC) (Dallas, Texas) is the consultant. Phase II is expected to be completed in early 2021. For more information, see Industrial Info's project reports on Phase I, Phase II and the natural gas pretreatment unit.
Earlier this week, Kinder Morgan received some good news about another project, the Gulf LNG project in Pascagoula, Mississippi. The U.S. Federal Energy Regulatory Commission gave the company permission to construct the project at the site of a former import terminal. The facility will have two liquefaction units with a combined annual production capacity of 11.5 million tons. KBR Incorporated (NYSE:KBR) (Houston) is the engineer on the project, construction of which could begin late next year. The two phases of the project have a combined TIV of $8 billion. For more information, see Industrial Info's project report on Phase I and Phase II.
Kinder Morgan reported second-quarter 2019 net income of $518 million, compared with a net loss of $180 million in the prior-year quarter.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, eight 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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
