Kinder Morgan Bolsters Role in Gulf, International Gas Markets

Researched by Industrial Info Resources (Sugar Land, Texas)--Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas), which handles about 40% of U.S. natural gas throughput, expects "tremendous growth" in gas demand and production over the coming years, driven primarily by gas exports to Mexico and liquefied natural gas (LNG) exports to much of the world. A recent acquisition in southern Texas is further boosting the company's role in the gas markets, and it continues to explore opportunities in the development of renewable natural gas (RNG). Industrial Info is tracking more than $12.5 billion worth of active and planned projects from Kinder Morgan, about $3.5 billion of which is attributed to natural gas pipelines.

Click on the image at right for a graph detailing Kinder Morgan's active and planned projects, by type.

In a quarterly earnings-related conference call, Rich Kinder, the executive chairman of Kinder Morgan, said most of the company's expansion opportunities are concentrated along the Gulf Coast, "where permitting and construction usually moves more quickly than elsewhere." The company recently brought an expansion of its Permian Highway Pipeline across Texas into service, adding 550 million standard cubic feet per day of takeaway capacity from the Permian Basin to Katy, Texas, which is near the Houston Ship Channel.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline Project Database can click here for a list of projects related to the Permian Highway Pipeline expansion.

Later this year, Kinder Morgan expects to kick off construction on parts of its Evangeline Pass Expansion Project, which is designed to provide up to 2 billion standard cubic feet per day of additional gas capacity on its Tennessee Gas Pipeline (TGP) and Southern Natural Gas (SNG) systems in Louisiana and Mississippi. The company plans to begin construction this summer on a compressor station in Chalmette, Louisiana, as well as a series of modifications to existing compressor stations across Mississippi and Louisiana. Subscribers can read a detailed report on the Chalmette project, and click here for a full list of reports for active and planned projects related to the Evangeline Pass Expansion.

"During the fourth quarter, we put $965 million of projects in service and added $344 million to the backlog, which currently stands at approximately $3 billion," said Kim Dang, the chief executive officer of Kinder Morgan, in the conference call. "Despite the decline versus last quarter, we're still confident in our ability to spend at the high end of the $1 billion to $2 billion per year discretionary capex [capital-expenditure] range for the next few years. Our confidence is supported by the roughly 20% expected growth in the natural gas market between now and 2030, driven by LNG exports, exports to Mexico, and industrial demand."

In December, Kinder Morgan closed its $1.815 billion acquisition of NextEra Energy Partners' South Texas assets, called STX Midstream, which is a series of natural gas pipeline systems that connect the Eagle Ford Shale to growing demand markets in Mexico and along the Gulf Coast. The acquisition includes a 90% interest in the NET Mexico Pipeline, with an affiliate of Petroleos Mexicanos (Pemex) (Mexico City) holding the remaining 10%, and full interest in the Eagle Ford Midstream system.

The 120-mile NET Mexico Pipeline carries 2.1 billion standard cubic feet per day from Robstown, Texas, to Ciudad Camargo, in the Mexican state of Tamaulipas. The 105-mile Eagle Ford Midstream system carries 4.9 billion standard cubic feet per day from LaSalle County to Nueces County in Texas. Subscribers to Industrial Info's GMI Pipeline database can read detailed profiles of the NET Mexico and Eagle Ford Midstream systems.

Although its contribution to fourth-quarter earnings were "relatively small," Kinder Morgan's RNG business is set for a major expansion, with two new plants in their final commissioning stages: the $48.5 million Twin Bridges Plant in Danville, Indiana, and the $48.5 million Liberty Plant in Monticello, Indiana. These facilities would join the existing Prairie View RNG Plant in Wyatt, Indiana, in turning methane produced at landfills into pipeline-grade RNG. Subscribers can read detailed reports on the Twin Bridges and Liberty projects, and read a detailed profile of the Prairie View Plant.

"They are not running as consistently as we would like them to run," Dang said of the three RNG plants. "I think that's what we're focused on now. We recently took over operations from Waste Management Incorporated (NYSE:WM) (Houston), and we think that once we really get our arms around this, we will be able to get these to run very consistently."

Kinder Morgan's net income for the fourth quarter was reported to be $594 million, compared with $670 million in the same period of 2022. The decrease was attributed to increased interest expense, which had been anticipated in the company's 2023 budget guidance. Kinder Morgan finished the year slightly behind its budget, primarily due to lower commodity prices.

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of reports for active and planned projects from Kinder Morgan.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).