Kinder Morgan Inc. (KMI), based in Houston, said it would expand operating gas storage capacity at its Markham storage facility in Matagorda County along the Texas Gulf Coast in a recent statement of press
Kinder Morgan entered into an agreement with Underground Services Markham LLC, a subsidiary of Texas Brine Company LLC, to lease an additional cavern at the Markham storage facility to progressively supply more than six billion cubic feet (Bcf) of operating gas storage capacity and 650 million cubic feet. per day (MMcf/d) of withdrawal capacity through KMI’s Texas pipeline system, according to the release.
Anchor loaders have subscribed to about half of the available capacity under long-term agreements, and the project is expected to be in commercial service by January 2024, according to the press release.
Prior to the expansion, the operating gas storage capacity of the Markham storage facility was 21.8 Bcf with a peak natural gas delivery of 1.1 Bcf/day. It has multiple receiving and delivery locations that serve Kinder Morgan’s nearly 7,000-mile intrastate pipeline system, the company said.
According to Kinder Morgan Natural Gas Midstream President Tom Dender, the company’s storage portfolio was “critical” in providing “much-needed supply to numerous electric generation facilities” during the winter storm. Uri in February 2021. The increase in natural gas storage “will support Texas customers, especially during severe weather events,” Dender added.
“Storage capabilities on highly utilized assets are critical to supporting Texas’ ability to respond to an energy crisis and ensure energy reliability as renewables become a larger part of the state’s energy mix” , Dender said.
Strong gas returns
KMI’s nearly 70,000-mile intrastate and interstate natural gas pipeline network moves about 40 percent of U.S. natural gas production and includes 700 billion cubic feet of storage of natural gas, which is 15 percent of total U.S. natural gas storage capacity, CEO Steve Kean noted. “Our extensive and interconnected network continued to generate strong earnings this quarter, particularly in our pipeline and natural gas terminal business segments,” Kean said in the company’s first-quarter earnings release.
“Natural gas pipeline business segment financial performance increased in the first quarter of 2023 compared to the first quarter of 2022, primarily due to higher contributions from our Texas Intrastate system, Midcontinent Express Pipeline, El Paso Natural Gas and most of our gathering system assets,” Kinder Morgan President Kim Dang said in the statement.
The company reported net income attributable to Kinder Morgan in the first quarter of $679 million, compared to $667 million in the first quarter of 2022. It reported distributable cash flow of $1.374 billion in the first quarter, up from $1.455 billion in the same period in 2022. Adjusted earnings were $675 million in January-March 2023, compared with $732 million in the corresponding quarter of 2022.
Natural gas transported rose three percent in volume from the first quarter of 2022, driven by increases at El Paso Natural Gas, the company said. The company also reported natural gas gathering volumes rose 18 percent between January and March 2022, primarily from its Haynesville and Eagle Ford systems.
“Even as the U.S. Congress debates infrastructure reform that enables reform, the system we operate under today makes it difficult to allow new natural gas pipelines across much of the country. This, in turn, increases the value of our existing natural gas pipeline systems, resulting in a favorable contracting environment,” Kean said in the statement. “With a large portion of our existing natural gas pipeline network in Texas and Louisiana, we also benefit from our ability to expand to meet growing demand in the nation’s most infrastructure-friendly region.”
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