Permian Highway expansion in-service date slips, KMI earnings up 2%

The in-service date for Kinder Morgan Inc.’s (KMI) 550-MMcfd expansion of the Permian Highway (PHP) natural gas pipeline has slipped to December 2023, with KMI attributing the delay to supply-chain constraints.

The 2.1-bcfd PHP, owned by KMI, Kinetik Holdings Inc., and ExxonMobil Corp., ships gas 430 miles from the Waha area in the Permian basin to the US Gulf Coast. The expansion was originally expected to have entered service Nov. 1, 2023 (OGJ Online, June 29, 2022).

Work is under way on all three of the compressor stations involved in Tennessee Gas Pipeline’s (TGP) $263-million, 115-MMcfd East 300 upgrade project. TGP is adding gas-fired compression at two of the stations and in February began building the third, a 19,000-hp electric-driven unit in West Milford, NJ. The company has entered a long-term, binding agreement with Consolidated Edison Co. of New York Inc. to supply the additional gas to its distribution system. Pending receipt of all required permits, the project has an expected in-service date of Nov. 1, 2023.

Permitting has begun for a $180-million TGP project to build a new 32-mile, 30-in OD pipeline that will ship 245-MMcfd gas from the existing TGP system to Tennessee Valley Authority’s proposed 1,450-Mw powerplant at an existing site in Cumberland, Tenn. Pending permits and clearances, the project is expected to enter service Sept. 1, 2025.

Earnings, operations

KMI had first-quarter 2023 net income of $679 million, compared with $667 million in first-quarter 2022. Natural gas transport volumes were up 3% compared with first-quarter 2022, primarily due to increases on El Paso Natural Gas driven by Line 2000’s return to service, cooler weather, and the retirement of a coal-fired power plant. Gas gathering volumes were up 18% from year-on-year, gains coming primarily from KMI’s Haynesville and Eagle Ford systems.

Crude and condensate volumes, by contrast, were down 5%, with unfavorable basis differentials hindering shipments on the 84,000-b/d Double H pipeline. The crude and condensate business was also impacted by lower Eagle Ford shale recontracting rates.

Refined products volumes were flat compared with first-quarter 2022. Gasoline volumes were up 1% year-on-year and diesel volumes were down 11%. Jet fuel volumes continued their strong rebound, up 12% versus first-quarter 2022.