LNG

Kinder Morgan Inc. (KMI), the leading US pipeline feed-gas company for liquefied natural gas plants and a key energy infrastructure developer, reported lower second-quarter net profits amid steady cash flow as it responded to volatile market conditions.

The company said profits declined to $586 million during the three months to the end of June from $635M in the second quarter of 2022.

“The KMI board and management team are fully committed to the use of our strong cash flow to benefit our shareholders,” said Executive Chairman Richard D. Kinder.

“We focus on maintaining a strong balance sheet while internally funding capital projects that produce returns well in excess of our cost of capital - including projects that are part of the ongoing energy evolution,” the Chairman stated,

KMI’s distributable cash flow amounted to $1.07 billion compared with $1.17Bln in the prior-year quarter.

Asset values

“KMI once again saw the value of its existing natural gas transportation and storage assets that are able to respond to volatile market conditions caused by extreme weather events and an increasingly intermittent resource-based electric grid,” said Chief Executive Steve Kean.

“Our 700 billion cubic feet of operated natural gas storage capacity is particularly useful in back-stopping intermittent renewable electricity resources,” Kean explained.

“Financial contributions from the Natural Gas Pipeline business segment were up relative to the second quarter of 2022 and ahead of budget,” added the CEO.

“Our Terminals business segment also over-performed relative to both the second quarter of 2022 and budget,” stated Kean.

KMI President Kim Dang said that the performance of the Natural Gas Pipelines business improved in the second quarter of 2023 versus the prior-year quarter.

Dang cited higher contributions from Midcontinent Express Pipeline, the Texas Intrastate system, El Paso Natural Gas (EPNG), the Stagecoach asset and the Tennessee Gas Pipeline (TGP), partially offset by lower contributions from the company's Eagle Ford gathering system assets.

Natural gas transport volumes were up 5 percent year-over-year, primarily from increases on EPNG due to returning a pipeline to service and the retirement of a coal-fired power plant.

Texas Intrastate

KMI said that the Texas Intrastate system benefited from a variety of existing shippers and new contracts, partially offset by reduced volumes on the Tennessee Gas Pipeline.

“Natural gas gathering volumes were up 19 percent from the second quarter of 2022 across most of our systems,” Dang explained. 

Among several new projects, KMI said that the two-phase $678M Evangeline Pass venture will include modifications and enhancements to portions of the TGP and Southern Natural Gas systems in Mississippi and Louisiana, enabling the delivery of the full FERC-certificated project volumes to Venture Global’s proposed Plaquemines LNG facility.

“Construction activities are underway for phase 1 of the project, which includes general operational upgrades enabling TGP to provide approximately 900 million cubic feet per day of natural gas transportation capacity to Venture Global’s facility,” said KMI.

Dang added that contributions from the Products Pipelines business segment were down compared with the second quarter of 2022, saying this was largely due to the impact in the prior-year period of sharply rising commodity prices.

“The crude and condensate business was also impacted by lower re-contracting rates in the Eagle Ford. Total refined products volumes were relatively flat compared to the second quarter of 2022,” Dang said.

Kinder Morgan Inc. (KMI) the leading US pipeline feed-gas company for liquefied natural gas plants and a key energy infrastructure developer, reported an increase in fourth-quarter net income and planned to expand its network to meet soaring LNG feed-gas demand.

Kinder Morgan Inc (KMI), the leading US pipeline feed-gas company for liquefied natural gas plants and a key energy infrastructure developer, reported third-quarter net income of $576 million, up from $495M in the prior-year quarter, as the executive team forecast a continuing and deepening LNG boom on the Gulf Coast.

Kinder Morgan Inc., the US pipeline giant transporting natural gas to LNG plants and to customers around America, said it now provided 50 percent of the feed-gas used by US LNG export plants and was planning more pipeline expansions to serve liquefaction facilities.

Kinder Morgan Inc., the US pipeline giant transporting natural gas to LNG plants and to customers around America, gave a fourth-quarter conference call describing its performance with Executive Chairman Richard D. Kinder saying there was “a long runway for fossil fuels, especially natural gas” in the nation.

KMI had reported net income of $637 million compared with $607M in the same three months of 2020 with distributable cash flow of $1.09 billion compared with $1.25Bln in the fourth quarter of 2020.

Adjusted earnings were $609M for the quarter versus $604M in the fourth quarter of 2020.

“Our assets once again generated robust adjusted earnings and strong coverage of this quarter’s dividend,” said KMI Executive Chairman Richard D. Kinder.

“The company provides our investors with dependable value grounded on stable cash flows and a time-honored corporate philosophy: fund our expansion capital opportunities internally, maintain a healthy balance sheet, and return excess cash to our shareholders through dividend increases and/or share repurchases,” stated the Executive Chairman.

“In short, there is a long runway for fossil fuels and especially natural gas. Investing in the energy sector has been very lucrative recently with the energy sector, the best-performing of the S&P 500 (top stocks) during 2021,” Kinder explained.

“We expect that favorable view to continue in 2022, and the year has started out that way,” he added.

“Within the energy segment, I would argue that midstream pipelines are a good way of playing this trend. They generally have less volatility and less commodity exposure than upstream and most have solid and growing cash flow underpinned by contracts to a large extent with their shippers. We believe KMI is a particularly good fit for investors,” he declared.

Payments

“We paid down over $12Bln in debt since 2016 and 2022 marks the fifth consecutive year we have increased our dividend, growing it over those years from $0.50 per share to $1.11 per share,” he told analysts in the conference call.

KMI Chief Executive Steve Kean stated in his contribution that he was especially proud of his more than 10,000 KMI co-workers who “remained laser-focused on safety, operational excellence, and customer service” the past three months.

“We closed out 2021 as a record year financially, beginning with our outstanding commercial and operational performance during Winter Storm Uri,” added Kean.

“As we complete our 25th year, future prospects for the company look very bright. Our business model, predominantly take-or-pay and fee-based, long-term contracts with creditworthy customers, remains durable,” explained the CEO.

“Our interconnected network of transportation and storage infrastructure is now recognized as even more valuable in the marketplace,” stated Kean.

“With multiple new deals and arrangements for transporting responsibly-sourced or certified natural gas, we are leveraging our status as a low-methane emissions intensity leader within our sector,” said the CEO.

Domestic and LNG

“Our assets remain well positioned to serve growing domestic markets and export locations for LNG and Mexico. Over the next 25 years we plan to build on continued strong performance in our base businesses while exploring exciting new opportunities,” Kean concluded.

KMI President Kim Dang acknowledged that transported volumes were down 3 percent, or about 1.1 million dekatherms per day ,versus the fourth quarter 2020, primarily driven by a continued decline in Rockies production and pipeline outages.

“Physical deliveries to LNG facilities off of our pipeline averaged about 5 million dekatherms per day that's a 33 percent increase versus the fourth quarter of 2020,” stated Deng.

“Our market share of LNG deliveries remains around 50 percent. Exports to Mexico were down in the quarter when compared to the fourth quarter of 2020 as a result of third-party pipeline capacity recently added to the market,” she stated.

“Overall deliveries to power plants were up slightly, at least in part, partially driven by coal supply issues, while LDC deliveries were down as a result of lower heating degree days,” explained Deng

“Our natural gas gathering volumes were up 6 percent in the quarter. For gathering volumes, though, I think the more informative comparison is the sequential quarter,” she added.

“So compared with the third quarter of this year, volumes were up 7 percent, with a big increase in Haynesville volumes, which were up 19 percent and Bakken volumes, which were up 9 percent,” analysts were told.

Oct 21 (LNGJ) - Kinder Morgan Inc., the US pipeline giant transporting natural gas to LNG plants and to customers around America, reported third-quarter net income of $495 million compared with $455M in the same three months of 2020 and with adjusted earnings of $505M.

   “In our base natural gas business, we continue to benefit from growing global natural gas demand. Our assets are well positioned to serve growing domestic markets and export locations for LNG and Mexico,” said KMI Chief Executive Officer Steve Kean. “And with 700 billion cubic feet of high deliverability natural gas storage capacity, we are also very well-positioned to move gas domestically when and where it’s needed most,” Kean added.

Kinder Morgan Inc., the US pipeline and terminals company and whose earnings measure the wellbeing of the US and oil and gas industry and the growing LNG sector, posted a wider net loss in the second quarter versus the same period of 2020 because of South Texas natural gas issues.

Kinder Morgan, the US natural gas pipeline operator and stakeholder in LNG exports and projects, reported first-quarter net income of $1.40 billion compared was a net loss of $306M in the prior-year quarter and said a new Louisiana pipeline expansion to serve Train 6 at Sabine Pass LNG was on track.

US pipeline and storage company Kinder Morgan said it expected the first Train of its Elba Island LNG export plant near Savannah in Georgia to come on stream in the first quarter of 2019 while the company was also benefitting from the feed-gas needs at other liquefaction ventures.

Kinder Morgan, one of the main US pipeline operators and owner of two LNG facilities, said it could now move forward with modifying its Gulf LNG import facility in Mississippi to handle exports as it is already doing with its Elba Island plant near Savannah, Georgia.