$3.3 Billion Deal to Acquire Kinder Morgan Canada, Cochin Pipeline by Pembina

Houston-based Kinder Morgan has agreed to sell Kinder Morgan Canada and the U.S. portion of the Cochin Pipeline system to Calgary-based Pembina Pipeline Corp in a US$3.3 billion deal.

The deal will expand Pembina's crude oil storage capacity and is expected to close late in the fourth quarter of 2019 or in the first quarter of 2020, subject to customary closing conditions, including KML shareholder and regulatory approvals.

The sale includes a significant crude oil storage and terminal business in Western Canada's key energy complex, including the Edmonton storage and terminal business and Vancouver Wharves, a bulk storage and export/import business.

The transaction includes 100% of the Cochin Pipeline system, including the Canadian portion owned by Kinder Morgan Canada and the U.S. portion, which accounts for nearly half of the deal US$1.54 billion. The Cochin pipeline system consists of 1,180 miles of pipeline that can transport 95,000 barrels per day.

"(The acquisition) represents an ideal opportunity to continue building on our low-risk, long-term, fee-for-service business model while extending our reach into the U.S. through a highly desirable cross-border pipeline, said Mick Dilger, Pembina's president and CEO. "Further, it will enhance our diversification as well as Pembina's customer service offering as a leading provider of integrated services to hydrocarbon producers in Western Canada."

This is an attractive transaction for (Kinder Morgan) KMI and (Kinder Morgan Canada) KML stockholders,” said Steve Kean, CEO of Houston-based Kinder Morgan. “It enables KMI to reduce leverage and gives us the flexibility to create additional value for shareholders through share buybacks, project investments, or both.”

Source:
pgjonline

$170 Million Expansion Projects Announced by Kinder Morgan

Kinder Morgan is planning to invest $170 million in several expansion projects along the Houston Ship Channel.

"The announced improvements only serve to enhance our position as the market-leading refined petroleum products storage hub on the U.S. Gulf Coast," Kinder Morgan President of Terminals John Schlosser said.

The expansion projects includes $125 million investment to boost pipeline connections and speed up loading at its Pasadena Terminal and the nearby Jefferson Street Truck Rack. A butane-on-demand blending system for 25 storage tanks at its Galena Park Terminal will be build using another $45 million.

Schlosser added, "This offers our customers unmatched supply optionality and liquidity and modal efficiencies as they aim to maximize storage and blending economics and access domestic and global energy markets in the most cost effective manner possible."

Source:
chron

Kinder Morgan Sues City of Kyle over Anti-Pipeline Ordinance

City of Kyle, an Austin suburb was sued by Kinder Morgan over the passage of an ordinance that the company says aims to keep the proposed $2 billion Permian Highway Pipeline project out of town.

The 430 miles, the 42-inch diameter Permian Highway Pipeline project will connect the fruitful Permian Basin of West Texas to the Katy natural gas hub near Houston and is designed to move 2 billion cubic feet of natural gas per day. The proposed route faces stiff opposition in the Texas Hill Country, Hays County and the City of Kyle.

The Kyle City Council passed an ordinance on July 2nd stating that all natural gas pipelines with a diameter of 30 inches or more would require a city permit. Kinder Morgan, in a 22-page lawsuit filed on Monday in U.S. District Court in Austin, alleges that the City of Kyle overstepped state and federal law.

“While municipalities have the authority to impose certain fees in discrete circumstances under Texas law, those fees must be both reasonably calculated and tied to the actual costs incurred by the city administering valid municipal regulations,” Kinder Morgan said in a statement.

The ordinance states that the pipelines must be buried at least 13 feet below the surface and be located at least 200 feet away from schools, day cares, hospitals, retirement homes and other sensitive facilities.

Kinder Morgan has also filed a complaint with the Railroad Commission and the company says the Permian Highway Pipeline’s route affects the fewest number of landowners and is environmentally sound.

Source:
chron

Kinder Morgan Moves Forward with South Texas Pipeline Connection

Kinder Morgan Inc., announced on Wednesday that the company will go ahead with the South Texas pipeline connection that would transport crude from Phillips 66’s Gray Oak pipeline in the Permian Basin to delivery points at the Houston Ship Channel.

“We wanted to find a way to get Permian barrels to KMCC (Kinder Morgan Crude and Condensate pipeline),” which delivers crude from the Eagle Ford Shale in South Texas to Houston Ship Channel destinations, Chief Executive Officer Steven Kean said.

Kinder Morgan and Phillips 66 began soliciting shipper commitments for the connection in February. The company plans to spend $10 million on the project this year and expects the connection could carry 100,000 barrels per day.

The service is expected to begin by the end of 2019 and has contracts to start transporting 75,000 barrels per day for up to three years. The company is also considering converting an underutilized natural gas pipeline to carry crude from the Bakken shale in North Dakota and the Denver-Julesburg basin in Colorado.

Source:
reuters

Kinder Morgan's Gulf LNG Project Gets Green Light from FERC

The Federal Energy Regulatory Commission gave Kinder Morgan the approval to build its Gulf LNG export project in Mississippi in a 3-1 vote. The proposed project would add 11.5 million metric tons of new capacity to Kinder Morgan's terminal in Pascagoula, Mississippi, which would include two liquefaction plants.

Some Democrats opposed and concerned about LNG terminals' impacts on climate change, but FERC Chairman Neil Chaterjee praised the vote tweeting, "This is big news for the US & our allies. Today's approval of #GulfLNG is significant for the economy & America's geopolitical interests."

The company initially developed the Gulf LNG site as a liquefied natural gas import terminal in 2009. But with record production from U.S. shale plays creating a surplus of natural gas, the company filed an application with FERC in July 2015 seeking permission to redevelop part of the site as an export terminal.

The project will also modify the existing Gulf LNG Pipeline allow for bidirectional flow. It's the fifth LNG export project the agency has approved so far this year.

Source:
chron

Open Season Announced for Bakken Crude Transportation

A binding joint tariff open season to solicit commitments for crude oil transportation service was announced by Kinder Morgan and Tallgrass Energy.

The crude oil transportation services starts from Bakken origin points on the Hiland Crude system, which is currently capable of moving approximately 88,000 barrel per day from Bakken origin points to Guernsey, WY.

Then through the Pony Express system, which is currently capable of moving approximately 375,000 barrel per day from Guernsey to Cushing, OK, connecting to three refineries along the way.

The binding open season begins July 1, 2019, at 4 p.m. Central Time and is expected to end on July 28, 2019, at 5 p.m. Central Time. Upon completion of a confidentiality agreement, additional documents and details related to the open season will be made available.

Source:
pgjonline

Kinder Morgan Approved by Court to Continue with $2 Billion Pipeline Project

On Tuesday, a Texas judge ruled that Kinder Morgan Inc. does not need approval from the Texas energy regulator in order to start working on a $2 billion natural gas pipeline project. Based on the new ruling, land can be taken and utilized by pipeline operators, if they qualify as utilities, for the public good without landowner’s consent. Standards for routing pipeline projects or private land-takings are no longer required by the Texas Railroad Commission (TRC).

Prior to the ruling, a lawsuit was made by some Texas landowners and officials who argued the TRC was not properly supervising or seeking public approval for Kinder Morgan’s Permian Highway pipeline. Kinder Morgan’s counterargument was that the decision was in the state legislature’s hands when it came to changes in the pipeline permitting process.

Tom Martin, a Kinder Morgan Executive, stated after the ruling that, “the court’s finding validates the process established in Texas for the development of natural gas utility projects.”

The pipeline is set to be about 400 miles long, stretching from West Texas to the United States Gulf Coast and carrying 2 billion cubit feet every day of natural gas. Landowners worry that “sensitive environmental features,” along the lines of endangered species habitats, residential neighborhoods and historic sites, will be affected. An advocate for Texas landowner’s rights, the Texas Real Estate Advocacy and Defense Coalition, is considering further legal actions.

Source:
Reuters

Trans Mountain Pipeline Expansion Project Receives Approval from Canadian Government

Canadian Prime Minister Justin Trudeau’s government approved the C$9.3 billion Trans Mountain pipeline expansion project that will link Alberta’s oil sands to a port near Vancouver, British Columbia.  

The pipeline was purchased by the government from Kinder Morgan a year ago to ensure its expansion. The pipeline project has set Canadian provinces against each other, opened rifts among its Indigenous communities and prompted major protests.

The project is a critical component of Mr. Trudeau’s longstanding position that Canada needs to maintain a strong energy industry to support its efforts to mitigate climate change.

The oil industry in Canada has increasingly turned to trains to ship its products from the oil sands, due to the pipeline bottlenecks. This method of shipment is both costly and potentially dangerous because of the risk of derailments. Due to the transportation issues, the oil industry in Alberta was forced to sell its product at a discount.

Source:
nytimes

Altus Midstream Acquires 27% Stake in Permian Highway Pipeline

Altus Midstream Processing LP decided to acquire an approximately 26.7% equity interest in the estimated US$2.1 billion Permian Highway Pipeline.

The pipeline is expected to have approximately 2.1 billion cubic feet per day of natural gas transportation capacity. It runs from the Waha area in northern Pecos County, Texas, to the Katy, Texas area, with connections to Texas Gulf Coast and other markets.

“We are very excited to participate in the Permian Highway Pipeline,” said Clay Bretches, Altus Midstream Chief Executive Officer and president. “This is a high-quality project supported by take-or-pay contracts with creditworthy counterparties.”

In September 2018, the final investment decision to proceed with the project was made and the pipeline is expected to enter service in October 2020. Altus Midstream Processing, Kinder Morgan and EagleClaw Midstream Ventures, each owns approximately 26.7% of the pipeline. The remaining 20% is owned by an anchor shipper affiliate.

Source:
worldpipelines

Trans Mountain Oil Pipeline Expansion Likely to Proceed

The controversial expansion of Trans Mountain oil pipeline will be proceeded by the Canadian government. Justin Trudeau’s federal cabinet will meet to discuss the expansion on June 18 and the plan is to double the pipeline flow out of Alberta to the west coast in British Columbia, Bloomberg reported.

The expansion would add 590,000 barrels of daily shipping capacity and will be a boon for Canadian oil drillers struggling from a lack of pipelines. British Columbia has been strongly opposing the project, which forced Kinder Morgan to reconsider its commitment to expand the Trans Mountain pipeline, and to sell the project to the Canadian government in August 2018.

The leaders advocating for the pipeline expansion is conducting consultations with First Nations regarding the project, in an attempt to address all possible concerns that opponents may have. Work on the project could start fairly quickly if the outcome of the consultations are positive.

Source:
oilprice
bloomberg

Kinder Morgan’s Steel Tariff Waiver Request Denied by Trump Administration

The Department of Commerce denied two requests from Kinder Morgan to buy tariff-free steel pipes from Turkish manufacturer Borusan Mannesmann in order to build the $1.75 billion Gulf Coast Express Pipeline in Permian Basin.

The company have a target service date of October 2019 for the 514-mile pipeline to move 2 billion cubic feet of natural gas per day from the Permian Basin of West Texas to the Agua Dulce hub near Corpus Christi.

Trump imposed a 25 percent import tax on steel and a 10 percent import tax on aluminum on most countries and extended them in June to Mexico, Canada and the European Union, in a decision taken on March 2018.

The company argued that the Gulf Coast Express Pipeline would boost exports, unlock more oil production in the Permian Basin. They also added that it will strengthen ties to Turkey, a key U.S. ally in the Middle East, but according to the Department of Commerce officials, there is a reasonable amount of pipeline available in the United States with "satisfactory quality" for the project.

Source:
chron

Deal Signed to Supply More Natural Gas to New York State by Kinder Morgan Pipeline

Tennessee Gas Pipeline Co, a subsidiary of Kinder Morgan has signed a deal with New York utility company Con Edison that will allow it to supply greater volumes of natural gas to upstate New York.

By upgrading its compression facilities outside of the New York, Tennessee Gas Pipeline would provide the increased natural gas capacity to Con Edison's distribution system in Westchester County, New York.

Tennessee Gas Pipeline already supplies natural gas to the rural county just north of New York City but the upgrades are expected to boost volumes in Con Edison's distribution system. The increased capacity could be placed in service by November 2023, which is subject to regulatory approvals.

Through this deal, it will boosts the natural gas supplies without having to build a new pipeline as New York State has blocked pipelines companies from building new natural gas pipelines or expanding existing ones within the state.

Source:
chron

Kinder Morgan Sells Stake in the Proposed Texas COLT

Kinder Morgan confirmed in a Monday afternoon statement that the company has sold its stake in a proposed offshore crude oil export terminal in the Gulf of Mexico known as Texas COLT to Enbridge, the lead developer in the project.

"Given the ongoing commitment required to move this project forward through the regulatory phase and, after an internal review within Kinder Morgan, it was determined that continuing with the project does not align with our strategic priorities," the company said in a statement.

Texas COLT was launched as a joint venture of Enbridge, Kinder Morgan and German marine terminal operator Oiltanking to accommodate Very Large Crude Carriers, or VLCCs. It was proposed to be built in an area of the Gulf of Mexico about 40 miles south of Freeport.

Enbridge officials said in a statement that the joint venture is moving forward without Kinder Morgan and will still be able to provide multiple varieties of U.S. crude oil for export.

"The COLT partnership, which combines Enbridge's leading North American asset portfolio with an international petroleum terminaling company in Oiltanking, continues to be central to the strength of the Texas COLT proposal," Enbridge stated.

Source:
chron

Nuevo Midstream Enters Deal to Buy Republic Midstream

Nuevo Midstream, a Houston pipeline operator has entered into a deal to buy Republic Midstream, an Eagle Ford Shale pipeline operator, in a statement released Wednesday morning by Nuevo Midstream. The deal is expected to close during the second quarter.

Republic Midstream owns and operates 100 miles of crude oil gathering pipeline and 300,000 barrels' storage in the Eagle Ford Shale's DeWitt and Lavaca counties. The company's network also includes a 26-mile intermediate pipeline that moves crude oil from a central delivery point to the Kinder Morgan Crude and Condensate Pipeline.

"We are very excited about this acquisition and the opportunity to expand the footprint and service offerings of the Republic system," President and Chief Executive Randy Ziebarth said. "We really like these assets and their location within the Eagle Ford. The Eagle Ford is experiencing a resurgence and is advantaged by its proximity to the Gulf. Nuevo Dos looks forward to helping producers fully participate in moving crude and condensate to market."

Source:
chron

FERC Approves $680M Project: 200-Mile Pipeline Moving NatGas from Oklahoma to Gulf Coast Will Connect to Kinder & Boardwalk Pipe

Cheniere Energy and a Washington D.C. private equity firm have received approval from the Federal Energy Regulatory Commission on Wednesday to build the 200-mile Midship Pipeline. The project will move natural gas from Oklahoma to destinations along the Gulf Coast and southeastern United States in Oklahoma.

In a statement issued by the companies, $680 million in financing was secured for the 36-inch diameter natural gas pipeline and a notice was issued for contractors Strike LLC, M.G. Dyess, TRC Pipeline Services and Cenergy LLC to proceed with construction.

The Midship Pipeline is designed to move 1.4 billion cubic feet of natural gas per day from Oklahoma's SCOOP and STACK shale plays to delivery point just north of the Red River near Bennington, Oklahoma. The project is expected to be placed in service by the end of the year.

The pipeline will connect to Kinder Morgan's Midcontinent Express Pipeline and the Boardwalk Pipeline Partners-owned Gulf Crossing Pipeline, allowing natural gas from Oklahoma to move to the TexOk Hub near Atlanta, Texas and the Perryville Hub near Tallulah, Louisiana.

Source:
chron

Kinder Morgan Allocates $2.3 Billion in Discretionary Budget to Natural Gas Projects

Kinder Morgan’s Vice President and Chief Financial Officer David Michels gave a peek at the 2019 budget, announcing that nearly $2.3 billion of Kinder Morgan’s $3.1 billion discretionary budget will be allocated to natural gas projects.

Two of their biggest projects are pipelines that will move natural gas from the Permian Basin of West Texas to the Gulf Coast.

Kinder Morgan is leading a joint venture with three other companies to bring the Gulf Coast Express Pipeline into service by October.

The cost of the 42-inch pipeline is $1.75 billion and will move 2 billion cubic feet of natural gas per day from the Waha Hub in the Permian Basin to the Agua Dulce hub near Corpus Christi.

The company is also a lead developer in another 42-inch pipeline, the $2.1 billion Permian Highway Pipeline. It is expected to come into service in Oct. 2020 and move 2 billion cubic feet of natural gas from the Waha Hub to the Katy Hub near Houston.
 
Kinder Morgan is also eyeing projects to boost its natural gas exports to Mexico and develop other pipelines to support the growing liquefied natural gas industry along the Gulf Coast.

The company plans to put its own Elba Island KNG export terminal near Savannah, Georgia into service by the end of the first quarter.

Source:
Chron

Kinder Morgan Responds to Alleged Lawsuit, Looks to Remediate Damages

Kinder Morgan responded to a proposed class action lawsuit claiming that there were numerous misstatements in the filed petition.

The company faces a proposed class action lawsuit claiming that one of their divisions emitted chemicals and toxic gas causing damage to property and resulting in the deaths of animals.

Kinder Morgan said that they will continue working with the landowners to remediate any impacts to their property, however an emailed statement says that its unit was aware of seven landowners in close proximity that were affected by the “mist” rather than the petition’s alleged “thousands of people” being impacted.

The petition was filed on Dec. 17 by a Texas-based resident who also requested class certification against the company and its Tennessee Gas Pipeline Company Unit, all while petitioning other land owners.

The plaintiff claims that the pipeline, which transports natural gas from Louisiana to the northeast section of the United States, released at least 565,000 cubic feet of toxic gas and other chemicals.

According to the petition, the plaintiffs are seeking compensation of at least $5 million.

Source:
Reuters

Kinder Morgan Drops Its Utica Marcellus Gas Pipeline Project

Kinder Morgan said in a financial report that it has decided to cancel its Utica Marcellus Texas Pipeline project as it shifts focus to its existing Tennessee Gas Pipeline, which transports natural gas from Gulf Coast in Louisiana to the northeast.

The UMTP was supposed to transport natural gas liquids from the Utica and Marcellus shale regions to the Gulf Coast in Texas. Kinder Morgan filed with the FERC in 2015 to abandon the TGP project in favor of the UMTP, which would have had a design capacity of 430,000 barrels daily.

The TGP will instead have the flow reversed by the company as it looks for producer commitments for the route between Appalachia and the Gulf Coast.

The most recent abandonment of a project comes after Kinder Morgan abandoned another, more prominent, project earlier this year. The Trans Mountain oil pipeline in Ottawa was sold to the federal government after it became clear to Kinder Morgan that the same government could not guarantee that the project would go through.

Source:
Oil Price

Trump Proposes to Double Steel and Aluminum Tariffs, Kinder Morgan Declines to Comment

President Trump said on Friday that he has proposed to his administration the doubling of steel and aluminum tariffs against Turkey, representing the shaky relationship the two countries currently share.

The increase is likely to push up costs for domestic oil and gas pipeline projects, as energy executives claim to have already struggled from the previous tariff.

The announcement would mark a major policy shift, and will impact aluminum by 20 percent and steel by 50 percent.

The White House and the Turkish government has held discussions for weeks as the United States attempted to have Turkey release an American Pastor who was arrested.

After Turkey decided to remove him from jail but place him under house arrest until his trial in October, Donald Trump erupted on Twitter saying that, “ The United States will impose large sanctions on Turkey for their long time detainment of Pastor Andrew Brunson.”

Prior to the 50 percent increase in steel tariffs, Plains All American was forced to add $40 million to the cost of their steel supplied by a company from Greece.

Kinder Morgan has already ordered nearly half of the specialized steel needed for its Gulf Coast Express project from Turkish steel maker Borusan Mannesmann before the original tariff went into place, a spokeswoman said.

The company declined to comment on the impact of the tariff but is still waiting for the U.S. Commerce Department to decide whether they would be exempt or not.


Source: 
Reuters

Kinder Morgan Adds Exxon Mobil as Major Customer for Permian Highway Pipeline

Kinder Morgan has added on Exxon Mobil as a major customer for its planned $2 billion Permian Highway Pipeline that will carry natural gas from West Texas to the Houston region.

Exxon is looking for more outlets to transport its natural gas from the rapidly increasing Permian Basin production. A lot of valuable associated gas comes out of the Permian despite crude oil being the main focus of production.

Kinder Morgan proposed the Permian Highway Pipeline project in June as they partnered with Midland-based EagleClaw Midstream. Eagle claw is financially backed by the private equity giant Blackstone Group out of New York.

The goal is to have the pipeline open by the end of 2020. Route details are still being finalized, but the main uses for the project include supplying gas for electricity generation in Texas and Mexico as well as supplying new liquefied natural gas export complexes currently under construction in Freeport and Corpus Christi.

Source:
Houston Chronicle