Kinder Morgan signs gas supply deal for Texas LNG project

Kinder Morgan Inc. (NYSE: KMI) said Dec. 8 that its Texas Intrastate Pipelines group has entered into a 20-year firm transportation services agreement with SK E&S LNG LLC, a subsidiary of SK E&S Co. LTD.

KMI would invest more than $150m to provide more than 320,000 dekatherms per day of firm natural gas transportation services to support SK LNG’s Train III liquefied natural gas export capacity at Quintana Island, Texas. This train is part of Freeport LNG Development’s Freeport LNG export facility which in total will liquefy up to 13.2 million tonnes per annum once fully operational.

KMI will construct and operate about 40 miles of pipeline extending from its existing Kinder Morgan Tejas mainline to an interconnection point with Freeport LNG’s existing pipeline located in Stratton Ridge, Texas. KMI will also expand and construct additional compression on its existing Kinder Morgan Texas and Kinder Morgan Tejas pipeline systems to provide these services upon the startup of Train III, which is expected in the third quarter of 2019. This transportation services agreement provides for the required expansion of the KMI intrastate system by over 1 billion cubic feet per day and will provide additional capacity to the Freeport and Chocolate Bayou areas.

“We are delighted to enter into this business relationship with SK, an emerging leader in the LNG export arena in the United States,” said Duane Kokinda, president of Kinder Morgan’s Midstream Group. “Our extensive network of assets on and near the Gulf Coast of Texas is uniquely positioned to provide SK with access to a variety of gas supply sources for its requirements at the Freeport LNG facility. LNG exports are one of the catalysts driving the growing demand for more natural gas in the United States.”

The agreements are subject to certain conditions, as well as making a final investment decision to construct the Freeport LNG Train III Liquefaction Project.

KMI is the largest energy infrastructure company in North America. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. The company’s pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials like coal and petroleum coke.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.