Kinder Morgan Reports 'Momentous' Third Quarter
HOUSTON (P&GJ) — Kinder Morgan reported what CEO Steve Kean described as a "momentous" third quarter Wednesday as the company achieved a 13% increase in natural gas transport volumes and the completion of major pipeline and LNG projects in the period ended Sept. 30.
In late September, the Houston-based company's Gulf Coast Express Pipeline (GCX) and first of 10 planned liquefaction units at its Elba Island facility went into service.
During a conference call with investors, Kean said the company plans to begin commercial service on three more liquefaction units before the end of this year and start six more trains during the first half of next year.
"Startup activities are underway on units two and three," Kean said. "Units four through six are in the commissioning phase, and construction on the remaining units is largely complete.”
While GCX started ahead of schedule on Sept. 25, Kinder Morgan has faced start-up delays at its Elba facility, located on Georgia's Savannah River border with South Carolina, just off the Atlantic Coast. It’s first unit was originally scheduled to start earlier in the year, followed by one additional unit per month thereafter.
Despite the "drag on our financial performance" caused by those delays, Kean said that "we began recognizing approximately 70 percent of the full project revenues" when the first Elba liquefaction unit entered commercial service."
President Kim Dang highlighted the company's record-setting natural gas production as a key contributor to Kinder Morgan's "strong, companywide commercial, financial and operating performance in the third quarter.
“We also made excellent progress on our Permian Highway Pipeline project, with nearly 85 percent of the right-of-way secured along the route and construction activities underway on the western spread," Dang said, adding that slower-than-expected regulatory approvals have pushed the project's expected in-service date to early 2021.
"As with GCX, this project is critical to the development of resources and the reduction of flaring in the Permian Basin” she said.
Kinder Morgan's third quarter 2019 net income of $506 million compares with $693 million in the third quarter of 2018, when the company recognized a gain on its Trans Mountain sale to the government of Canada.
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