Houston-based company outlined progress on Permian gas and greener Gulf Coast supply plan
LNG News Editor:
Kinder Morgan Inc., the US pipeline giant transporting natural gas to LNG plants and to customers around America, reported a boost in demand from liquefaction plants and outlined progress on more Permian Basin natural gas for the Gulf Coast and on a greener gas supply plan.
That’s as the Houston-based company saw net income more than halve to $667 million compared with the $1.41 billion logged in the first quarter of 2021 because of a major weather event in the prior-year period that favoured revenues.
Cash flow
KMI also reported a plunge in distributable cash flow (DCF) when compared with that period to $1.45Bln compared with $2.33Bln in the first quarter of 2021.
“While these both represent a decrease from the first quarter of 2021, those 2021 results were positively impacted by the non-recurring earnings achieved during Winter Storm Uri,” said KMI President Kim Dang.
The February 13-17, 2021 North American winter storm was an ice and weather event that impacted electric power supplies and boosted natural gas needs across the United States and the region and particularly in Texas.
“Excluding Uri-related earnings from our 2021 results, earnings per share for the quarter were up 17 percent and DCF per share was up 16 percent as compared to the first quarter of 2021,” Dang explained.
Dang said that natural gas transport volumes were up 2 percent at the start of 2022 compared with the first quarter of 2021, with increases on Kinder Morgan Louisiana Pipeline (KMLP), Natural Gas Pipeline of America (NGPL) and Tennessee Gas Pipeline (TGP) due to increased deliveries to LNG customers and from the new Stagecoach assets in the US Northeast.
“These were partially offset by lower contributions from El Paso Natural Gas (EPNG) and Colorado Interstate Pipeline (CIG),” she added.
“Natural gas gathering volumes were up 12 percent from the first quarter of 2021 with higher volumes primarily on KinderHawk,” said Dang.
KMI Executive Chairman Richard D. Kinder said he believed the company was off to a great start in 2022.
“We continue to live within our cash flow, have reduced our debt by more than $11Bln since 2015, and plan for this year to be the fifth consecutive year of increased dividends,” stated the Chairman.
“During 2022 we expect to once again fund our expansion capital opportunities internally, meet or exceed our debt metric goal and return excess cash to our shareholders through a dividend increase and opportunistic share repurchases,” he explained.
Chief Executive Steve Kean said KMI continued to see growth in its base natural gas business as more customers sought to take advantage of the extensive firm transport and storage services offered.
“Our Stagecoach acquisition is fully integrated with our commercial and physical operations, producing the commercial opportunities we expected, and exceeding the acquisition model,” said Kean.
Stagecoach system
It also included four natural gas storage facilities with a total working gas capacity of 41 billion cubic feet.
KMI reported among the first-quarter highlights that due to the increasing need for additional gas takeaway from the Permian Basin, the company was in discussions regarding primarily compression expansion opportunities.
This could begin as early as the fourth quarter of 2023 on both the Permian Highway Pipeline and Gulf Coast Express Pipeline.
