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LNG, Permian Highway pipe flows boosted Kinder Morgan's Q3 transport volumes from SNL Daily Gas Report LNG, Permian Highway pipe flows boosted Kinder Morgan's Q3 transport volumesByline: S&P Global Platts Kinder Morgan Inc. increased the amount of natural gas it transported on its pipelines in the third quarter by about 2 Bcf/d, or 5%, from the prior quarter, according to earnings statements. Much of the increase can be attributed to higher deliveries to LNG facilities and robust flows along the Permian Highway pipeline, Kinder Morgan President Kimberly Allen Dang said on the company's Oct. 20 earnings call. With global gas prices racing to record highs in August and September as Europe and Asia competed for LNG cargoes, U.S. LNG feedgas demand averaged 10.5 Bcf/d during the third quarter, more than double the 4.4 Bcf/d averaged during the same quarter in 2020. Kinder Morgan has about 50% of the total U.S. LNG delivery market share, Dang said. The strong Permian Highway pipeline utilization can likely be attributed to Hurricane Ida. Permian gas supplies were called upon to make up supply shortfalls in the Gulf Coast region after the storm took most offshore gas production offline in late August, benefiting Permian-to-Gulf Coast pipelines like the 2.1-Bcf/d Permian Highway pipeline. While there is less visibility into intrastate pipeline operations, Platts Analytics modeled data showed that implied eastbound flows from the Permian reached year-to-date highs near 8 Bcf/d in early September. The gains in Kinder Morgan transport volumes from LNG feedgas and Permian Highway pipeline flows were "somewhat offset by declines on our West pipes due to the declining Rockies production, pipeline outages, and contract expirations," Dang said. Kinder's total flows to Mexico were also lower "as a result of a new third-party pipeline capacity added during the quarter," Dang added. While transport volumes had a robust quarter, the near-term outlook for large new-build projects is not as sunny. "It's no secret to anybody: [Midstream projects] are harder to permit and build," Thomas Martin, president of the natural gas pipeline business, said when asked about Kinder Morgan's lower spending outlook. The company has adjusted its outlook for spending growth from 2%-3% to 1%-2%, according to Martin. Martin's prognosis for new pipeline projects was not entirely pessimistic, though, with anticipated gas demand growth along the Texas and Louisiana Gulf Coast possibly moving the time frame up for when additional Permian takeaway capacity might be needed. "But really huge projects, I think, are probably not as likely to get done or permitted," Martin said. |
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