Kinder Morgan mulls LPG exports

OREANDA-NEWS. July 17, 2015. Kinder Morgan may make a significant investment in LPG exports at both the Houston Ship Channel and the northeast region of the US.

Kinder Morgan has existing terminal assets along the Houston Ship Channel but they have been considering opportunities for export facilities, the company said Wednesday during its second quarter earnings call.

LPG export projects are competing with clean product export facility project in the same area and also with potential crude products at the company.

"So, the market is very ripe in Houston right now. It's just a matter of which product makes the most sense on a going forward basis," Kinder Morgan president of terminals John Schlosser said.

Schlosser said the LPG projects are profitable and could compete with other projects, but they keep seeing more opportunities on the clean side as opposed to LPG.

Kinder Morgan, one of the largest pipeline and terminal companies in the country, would face tough competition if it enters the LPG export arena. Enterprise Products Partners has long been the dominant force in the market, while Targa Resources and Lone Star NGLs are also growing.

Enterprise recently completed an expansion at its export facility at the Houston Ship Channel, and after a second phase of expansion Enterprise will have the ability to export 16mn bl/month, or 29 monthly vessel loadings.

Lone Star NGL's storage fractionation complex at Mont Belvieu, Texas, feeds propane and butane to the 200,000 b/d Mariner South pipeline to move product to Sunoco Logistics' export terminal at Nederland, Texas.

Targa Resources also has an LPG export facility at the Houston Ship Channel which is capable of exporting about 6.5mn bl/month, while Phillips 66's LPG export terminal in Freeport, Texas, is on schedule to come online in the second half of 2016.

Kinder Morgan NGL volumes more than doubled from the same period last year because of the completion of the reversal project on the Cochin pipeline. The line used to transport about 30,000 b/d of propane from western Canada to the US midcontinent. The line was taken out of service for part of the second quarter last year while Kinder Morgan completed the reversal project.

Total NGL volumes for the quarter on Kinder Morgan pipelines, including the Cochin, were at 9.7mn bl, up from 3.7mn bl year-on-year.