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Released April 22, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) is cautiously exploring its options to expand its capacity to transport, store and export natural gas and liquefied natural gas (LNG) amid a global surge in demand, fueled in part by the ongoing conflict in Ukraine. The company, which saw stronger-than-expected results in the first quarter, already is benefiting from significantly heightened use of its existing facilities. Industrial Info is tracking about $11.5 billion worth of active projects from Kinder Morgan, more than 90% of which is attributed to U.S.-based projects for LNG production and natural gas pipelines.
Click on the image at right for a graph detailing Kinder Morgan's active projects across the U.S. and Canada, by project type.
"Due to the increasing need for additional gas takeaway from the Permian Basin, we are in discussions regarding primarily compression-expansion opportunities that could come on beginning as early as the fourth quarter 2023, on both the Permian Highway Pipeline and Gulf Coast Express Pipeline," said Steve Kean, the chief executive officer of Kinder Morgan, in a quarterly earnings-related conference call. "Combined, these projects would add more than 1 billion cubic feet per day of additional takeaway capacity to the U.S. Gulf Coast."
Kinder Morgan Texas Pipeline LLC, the subsidiary that runs the Permian Highway and Gulf Coast Express pipelines, has been seeking permits since the beginning of the year for a third system in the area: the Permian Pass Pipeline, which would carry up to 2 billion cubic feet per day of natural gas about 400 miles from the Permian Basin to the Texas Gulf Coast.
The Permian Pass project was all but dead in mid-2020, when natural gas prices were at lows following the outbreak of COVID-19 and customers were reluctant to sign long-term deals needed to finance the project. But executives have been hearing calls to revive the project amid growing demand at home and abroad. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can learn more from a detailed project report.
"The market will fill up relatively quickly," said Thomas Martin, the president of Kinder Morgan's natural gas pipelines business, in the conference call. "We're estimating a greenfield pipe [such as Permian Pass] will now be needed some time in 2026, after all the expansions are done, to fill the immediate need. With that, and given the timeline on doing greenfield type projects, that would lend itself towards a final investment decision sometime early next year for that kind of a project."
Executives also said the surging demand for LNG would prove beneficial to the company's bottom line. "I anticipate that all of our present LNG export facilities will be running at capacity for the foreseeable future, and the contracts necessary to support the construction of new facilities in the next few years will be more attainable than they've been in the past," said Rich Kinder, the executive chairman of Kinder Morgan, in a quarterly earnings-related conference call.
One long-delayed project from Kinder Morgan that could benefit from the sudden burst in demand for LNG exports is its proposed Gulf LNG liquefaction export terminal in Pascagoula, Mississippi. An existing terminal at the same site began importing LNG in 2011, and it currently stores up to 160,000 cubic meters. But Kinder Morgan applied with the U.S. Federal Energy Regulatory Commission (FERC) in July 2015 to overhaul parts of the complex for an export terminal, after record production at U.S. shale plays resulted in a surplus of natural gas. The proposal languished for a few years until FERC approved it in July 2019.
Despite FERC's approval, Kinder Morgan announced the project had been "put on the backburner" in January 2020, in favor of more easily developed growth opportunities. In the fall of 2020, the U.S. Department of the Interior sought to revive and expedite the Gulf LNG export terminal, along with several similar projects, but Kinder Morgan remained silent on the matter. For more on that, see September 8, 2020, article - U.S. Interior Department Seeks to Expedite Energy, Mining Projects.
Kean was cautious when discussing the Gulf LNG export project in the conference call, but acknowledged interest in the project had revived: "We will work with that customer to see if there's something that would allow us to bring the potential for a brownfield liquefaction opportunity forward, but we don't have anything to announce there today." Subscribers can read more details in Industrial Info's project report.
Kinder Morgan, like most midstream developers, already was prioritizing expansions, repurposing and extensions of its existing assets before Russia's invasion of Ukraine. Two of Kinder Morgan's subsidiaries, Tennessee Gas Pipeline Company LLC and Southern Natural Gas Company LLC, have been seeking permits for the proposed Evangeline Pass Expansion Project in Louisiana and Mississippi since before the pandemic.
The Evangeline Pass expansion would provide Venture Global LNG Incorporated's (Arlington, Virginia) Plaquemines LNG export project in Cameron, Louisiana, with up to 1.1 billion cubic feet per day of natural gas, via additions to the subsidiaries' existing systems. Venture Global's project began construction earlier this year and is designed to produce 10 million metric tons per year of LNG for export. Subscribers can click here for a list of related projects in the Evangeline Pass expansion, and read a detailed project report on the Plaquemines LNG project.
Kinder Morgan also announced it is working with Cheniere Energy Incorporated (NYSE:LNG) (Houston) and other midstream operators to quantify and monitor greenhouse gas (GHG) emissions associated with the operation of natural gas gathering, processing, transmission and storage systems. The companies involved hope to "improve the overall understanding of GHG emissions and further the deployment of advanced monitoring technologies and protocols," according to a press release. Among the properties to be studied are select pipeline segments and compressor stations on Kinder Morgan's Tennessee Gas Pipeline, Louisiana Pipeline, and Natural Gas Pipeline of America systems.
Kinder Morgan's first-quarter 2022 results came in above analyst expectations, despite an overall drop in revenues and profits that was attributed to first-quarter 2021's Winter Storm Uri, an extraordinary circumstance that made that quarter's results an outlier. Profits stood at $667 million in first-quarter 2022, compared with $1.41 billion in the same period last year. Revenues were reported to be $4.29 billion, compared with $5.21 billion in first-quarter 2021.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
Click on the image at right for a graph detailing Kinder Morgan's active projects across the U.S. and Canada, by project type."Due to the increasing need for additional gas takeaway from the Permian Basin, we are in discussions regarding primarily compression-expansion opportunities that could come on beginning as early as the fourth quarter 2023, on both the Permian Highway Pipeline and Gulf Coast Express Pipeline," said Steve Kean, the chief executive officer of Kinder Morgan, in a quarterly earnings-related conference call. "Combined, these projects would add more than 1 billion cubic feet per day of additional takeaway capacity to the U.S. Gulf Coast."
Kinder Morgan Texas Pipeline LLC, the subsidiary that runs the Permian Highway and Gulf Coast Express pipelines, has been seeking permits since the beginning of the year for a third system in the area: the Permian Pass Pipeline, which would carry up to 2 billion cubic feet per day of natural gas about 400 miles from the Permian Basin to the Texas Gulf Coast.
The Permian Pass project was all but dead in mid-2020, when natural gas prices were at lows following the outbreak of COVID-19 and customers were reluctant to sign long-term deals needed to finance the project. But executives have been hearing calls to revive the project amid growing demand at home and abroad. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can learn more from a detailed project report.
"The market will fill up relatively quickly," said Thomas Martin, the president of Kinder Morgan's natural gas pipelines business, in the conference call. "We're estimating a greenfield pipe [such as Permian Pass] will now be needed some time in 2026, after all the expansions are done, to fill the immediate need. With that, and given the timeline on doing greenfield type projects, that would lend itself towards a final investment decision sometime early next year for that kind of a project."
Executives also said the surging demand for LNG would prove beneficial to the company's bottom line. "I anticipate that all of our present LNG export facilities will be running at capacity for the foreseeable future, and the contracts necessary to support the construction of new facilities in the next few years will be more attainable than they've been in the past," said Rich Kinder, the executive chairman of Kinder Morgan, in a quarterly earnings-related conference call.
One long-delayed project from Kinder Morgan that could benefit from the sudden burst in demand for LNG exports is its proposed Gulf LNG liquefaction export terminal in Pascagoula, Mississippi. An existing terminal at the same site began importing LNG in 2011, and it currently stores up to 160,000 cubic meters. But Kinder Morgan applied with the U.S. Federal Energy Regulatory Commission (FERC) in July 2015 to overhaul parts of the complex for an export terminal, after record production at U.S. shale plays resulted in a surplus of natural gas. The proposal languished for a few years until FERC approved it in July 2019.
Despite FERC's approval, Kinder Morgan announced the project had been "put on the backburner" in January 2020, in favor of more easily developed growth opportunities. In the fall of 2020, the U.S. Department of the Interior sought to revive and expedite the Gulf LNG export terminal, along with several similar projects, but Kinder Morgan remained silent on the matter. For more on that, see September 8, 2020, article - U.S. Interior Department Seeks to Expedite Energy, Mining Projects.
Kean was cautious when discussing the Gulf LNG export project in the conference call, but acknowledged interest in the project had revived: "We will work with that customer to see if there's something that would allow us to bring the potential for a brownfield liquefaction opportunity forward, but we don't have anything to announce there today." Subscribers can read more details in Industrial Info's project report.
Kinder Morgan, like most midstream developers, already was prioritizing expansions, repurposing and extensions of its existing assets before Russia's invasion of Ukraine. Two of Kinder Morgan's subsidiaries, Tennessee Gas Pipeline Company LLC and Southern Natural Gas Company LLC, have been seeking permits for the proposed Evangeline Pass Expansion Project in Louisiana and Mississippi since before the pandemic.
The Evangeline Pass expansion would provide Venture Global LNG Incorporated's (Arlington, Virginia) Plaquemines LNG export project in Cameron, Louisiana, with up to 1.1 billion cubic feet per day of natural gas, via additions to the subsidiaries' existing systems. Venture Global's project began construction earlier this year and is designed to produce 10 million metric tons per year of LNG for export. Subscribers can click here for a list of related projects in the Evangeline Pass expansion, and read a detailed project report on the Plaquemines LNG project.
Kinder Morgan also announced it is working with Cheniere Energy Incorporated (NYSE:LNG) (Houston) and other midstream operators to quantify and monitor greenhouse gas (GHG) emissions associated with the operation of natural gas gathering, processing, transmission and storage systems. The companies involved hope to "improve the overall understanding of GHG emissions and further the deployment of advanced monitoring technologies and protocols," according to a press release. Among the properties to be studied are select pipeline segments and compressor stations on Kinder Morgan's Tennessee Gas Pipeline, Louisiana Pipeline, and Natural Gas Pipeline of America systems.
Kinder Morgan's first-quarter 2022 results came in above analyst expectations, despite an overall drop in revenues and profits that was attributed to first-quarter 2021's Winter Storm Uri, an extraordinary circumstance that made that quarter's results an outlier. Profits stood at $667 million in first-quarter 2022, compared with $1.41 billion in the same period last year. Revenues were reported to be $4.29 billion, compared with $5.21 billion in first-quarter 2021.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
