It has been 12 months since the Trans Mountain Expansion Project — aka TMX — finally began operations after years of delay, creating a much-needed, larger conduit to move Western Canada’s rising crude oil production to the Pacific Northwest and overseas markets. Although the customer base for exports remains limited, the Trans Mountain pipeline system has been responsible for opening up entirely new markets for Canadian crude. As we discuss in today’s RBN blog, despite its numerous delays and immense cost, the pipeline has recently seen record crude shipments and is nearing its nameplate capacity, driven by rising exports.
Kinder Morgan
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Did You Ever Know That You’re My Hero? - One Year In, Trans Mountain Reaches Record Crude Shipments Friday, 5/23/2025
Wednesday, 11/06/2024
One of the most prevalent stories in the U.S. natural gas market over the past decade has been soaring associated gas production in the Permian Basin and the question of what to do with it. Numerous pipelines have been built over the years connecting Permian gas to demand regions, and more are in the works. The largest source of incremental demand is LNG exports, mostly from the Sabine River area at the Texas/Louisiana border. The catch is, getting Permian gas past Houston to the banks of the Sabine presents significant challenges. In today’s RBN blog, we’ll discuss Kinder Morgan’s proposed Trident Pipeline — an attempt to overcome those challenges — and explain why this new outlet would alter gas pricing and flow dynamics in the broader Gulf Coast region.
Tuesday, 7/30/2024
Crude-oil-focused production in the Bakken still hasn’t fully recovered from its pre-COVID high, partly because the western North Dakota shale play continues to face takeaway constraints, especially for natural gas and NGLs. A couple of NGL pipeline projects in the works will certainly help, but will they be enough to enable the Bakken’s increasingly consolidated E&P sector to ramp up its crude oil production? And one more thing: How will the incremental NGLs flowing south on Kinder Morgan’s soon-to-be-repurposed Double H Pipeline find their way to fractionation centers in Conway and Mont Belvieu? In today’s RBN blog, we’ll look at the Bakken’s complicated production-vs.-takeaway conundrum and the ongoing efforts to address it.
Thursday, 1/13/2022
Over the last decade and a half, oil and gas companies have taken investors on a wild roller coaster ride as their ambitious growth strategies and stock prices have been boosted, then badly battered, by volatile demand and commodity prices. With sentiment toward the old-school energy industry turning negative, producers and midstreamers shifted course to emphasize value over volume, prioritizing solid cash flow generation and substantial shareholder returns. Midstream giant Kinder Morgan has found it especially difficult to win back investor confidence despite its largely successful efforts to stabilize its balance sheet, internally fund growth, and gradually restore its dividend. But will that be enough to improve the company’s prospects? In today’s RBN blog, we draw on more highlights from our recent Spotlight report on KMI’s portfolio, performance, and near-term growth potential, with an emphasis on the opportunities ahead.
Wednesday, 12/08/2021
Market sentiment toward oil and gas companies, particularly producers and midstreamers, has been increasingly negative since the oil price crash in late 2014, driven by a mix of shorter-term concerns like price volatility and corporate debt and longer-term worries like the environment and an impending energy transition. One company that has found it especially difficult to regain investor confidence is midstream giant Kinder Morgan Inc., whose late-2015 decision to slash its dividend got an ice-cold reception from shareholders and sent the company’s stock price sharply lower. Over the past six years, KMI has been largely successful in its efforts to stabilize its balance sheet, internally fund growth, and gradually restore its dividend, but its current share price remains close to its late-2015 low and barely one-third its early-2015 high. In today’s RBN blog, we discuss highlights from our new Spotlight report, which analyzes KMI’s current portfolio and performance and discusses in detail the company’s new strategic initiatives to restore investor confidence.
Monday, 1/06/2020
With 2020 already in full swing, some things in the Permian Basin’s oil and natural gas markets have changed dramatically since this time last year, others not so much. When it comes to crude oil, new pipelines that came online during 2019 had a huge impact on differentials: Permian barrels are now pricing very close to other regional hubs, versus massive discounts a year ago. That has enabled Permian producers to fully benefit from the recent run-up in global oil prices. On the gas side of things, the start of the new decade won’t look much different than the end of the last one. There is still way too much supply and not enough takeaway capacity. That means that regardless of what happens at Henry Hub, the U.S. benchmark for natural gas prices, Permian producers should expect dismal values for their natural gas in 2020. Today, we take a look at the year ahead for Permian producers.
Sunday, 10/27/2019
If it’s not one thing, it’s another in the Permian natural gas market. Just as it appeared that prices in the West Texas basin were finally turning a corner and strengthening with the full start-up of Kinder Morgan’s Gulf Coast Express Pipeline (GCX) late last month, various issues have again conspired to send daily Permian cash prices back down to near zero yet again. And it’s not just the daily spot markets that have come under pressure; forward prices were also severely discounted a few days ago when Kinder Morgan announced that the in-service date of its next long-haul pipeline from the region — the Permian Highway Pipeline project — would be delayed from late 2020 to early 2021. Keeping track of the roller-coaster ride of Permian gas prices and the drivers behind the highs and lows continues to keep heads spinning. Today, we explain the latest wild moves in the Permian natural gas market.
Wednesday, 10/23/2019
For some time now, natural gas producers in the Permian and the Eagle Ford have been counting on rising pipeline exports to Mexico to help absorb a lot of the incremental production in their plays. Their hopes have been bolstered in the past couple of years by the build-out of a number of new pipelines from the Waha and Agua Dulce gas hubs to the U.S.-Mexico border. Gas pipeline development south of the border hasn’t kept pace, though, mostly due to regulatory and construction delays. Also, a recent dispute over tariffs on a newly completed large-diameter pipeline, extending from the southern tip of Texas to key points along Mexico’s Gulf Coast, had left the pipe sitting empty this summer. That tiff has since been resolved and gas is flowing on the new pipeline, allowing those piped southbound exports to hit a daily record high near 5.9 Bcf/d earlier this month and average above 5.5 Bcf/d this month to date. Plus, progress is being made on other planned Mexican pipes too. This all leads us to ask, is the long-promised surge in U.S. gas exports to Mexico just around the corner? Today, we look at the latest developments regarding Mexico’s natural gas pipeline infrastructure additions.
Sunday, 9/29/2019
After months of severe natural gas pipeline constraints, Permian producers and shippers are reveling in the relief of new takeaway capacity. Kinder Morgan’s Gulf Coast Express (GCX) Pipeline, which began flowing initial volumes in mid-August, last week began full commercial service on its 2-Bcf/d greenfield route from the Permian to South Texas. Actual volumes on GCX are hard to come by, but all indications are that flows are ramping to near capacity. That surge in Permian outflows in recent weeks has propelled natural gas prices at the regional benchmark Waha Hub — which traded as low as $5.00/MMBtu below zero earlier this year and fell into negative territory as recently as August 8 — to nearly $2/MMBtu, levels not seen at the hub since last winter. However, with the sting from negative prices only now just fading, many in the market are wondering if this rally is here to stay or just a temporary reprieve. Today, we look at the latest developments in the Permian natural gas market.
Monday, 9/02/2019
Battered by a flood of new supply and limited pipeline takeaway capacity, prices for Permian natural gas and crude oil have spent a lot of time in the valley over the past 18 months. West Texas Intermediate (WTI) crude oil prices at the Permian’s Midland Hub traded as much as $20/bbl less than similar quality crude in Houston last year. That’s a big oil-price haircut that producers have had to absorb while ramping up production. However, the collapse in the Permian crude oil differential was tame compared to what happened with Permian natural gas prices. Prices at the Waha Hub in West Texas traded as low as negative $5/MMBtu, a gaping $8/MMBtu discount to benchmark Henry Hub in Louisiana. As bad as that all was, new pipeline takeaway capacity has arrived, and Permian prices are beginning to claw their way out of the depths. Today, we look at how new pipelines are impacting the prices received for Permian natural gas and oil.
Thursday, 6/20/2019
Permian gas marketers were likely breathing a sigh of relief earlier this month when news came that the developers behind the Whistler Pipeline had made a final investment decision (FID) to proceed with the new 2.0-Bcf/d link between the Permian and South Texas. The project provides a crucial link in the gas takeaway picture for the Permian and makes it less likely that gas pipeline capacity constraints in the future will result in the negative prices that are plaguing the present-day gas markets in West Texas. Combined with the two other Permian greenfield gas pipelines that have taken FID — Kinder Morgan’s Gulf Coast Express (GCX) and Permian Highway Pipeline (PHP) — there is now ~6 Bcf/d of incremental Permian supply pointed at the Texas Gulf Coast over the next two years. That’s great news for Permian producers, as well as demand centers along the coast, where tremendous growth in LNG exports is under way. Today, we detail the third natural gas pipeline being built from the Permian to the Texas Gulf Coast.
Wednesday, 3/27/2019
Permian natural gas prices are having a rough spring. After a volatile winter that saw two periods of negative-priced trades followed by a period of relatively strong prices, values at the Permian’s major trading hubs hit the skids earlier this week just as Spring Break set in for most in the Lone Star state. Once again, pipeline maintenance and burgeoning production appear to be the main culprits, but this upheaval feels different, in our view. Clearly, the price crash has reached a new level of drama, with day-ahead spot prices at West Texas’s Waha hub now settling below zero — some days by more than $0.50/MMBtu. Gas production has raced higher too, now within striking distance of 10 Bcf/d, on the coattails of continued oil pipeline capacity expansions, but new gas pipeline takeaway capacity is an estimated six months away. What becomes of Permian gas prices in the meantime, and how much worse could already-negative prices get? Today, we discuss the drivers behind the latest price deterioration and assess what’s ahead for the Permian natural gas markets.
Thursday, 3/07/2019
The Mexican market is critically important to Permian producers. Rising gas demand south of the border — along with expected gains in LNG exports from new liquefaction/export facilities along the Gulf Coast — are key to their plans to significantly increase production of crude oil, which brings with it large volumes of associated gas. All that gas needs a market, and nearby Mexico is a natural. For a number of years now, Mexico’s Comisión Federal de Electricidad has been working to implement a plan to add dozens of new gas-fired power plants and to support the development of new gas pipelines to transport gas to them from the U.S. The new pipelines have been coming online at a slower-than-planned pace. But what pipeline capacity has been added across the border from West Texas is already changing Mexico’s gas market. The El Encino Hub in Northwest Mexico is one such area where there are signs of a shifting supply-demand balance. Today, we continue a blog series on key gas pipeline developments down Mexico way and the implications for gas flows, this time delving into the dynamics at the El Encino Hub.
Wednesday, 1/30/2019
While Permian natural gas pipeline announcements came fast and furious last year, it had been relatively quiet on that front the past few weeks. Leave it to the folks at WhiteWater Midstream to break the lull, which is exactly what they did with the recent announcement of a binding open season for a new interstate pipeline in the heart of the Delaware Basin. Named Steady Eddy, the pipeline would originate in an underserved corner of the Permian and provide access to the Waha Hub, where a number of planned greenfield pipelines leaving the Permian will begin. Today, we look at the details of WhiteWater’s proposed Steady Eddy pipeline project.
Sunday, 1/27/2019
Mexico’s energy sector has been dealing with a fair amount of uncertainty of late. Newly installed Mexican President Andrés Manuel López Obrador has promised to undo elements of the country’s historic energy reform program, limit imports of hydrocarbons, and focus on domestic production and refining. How much will all this affect the export of natural gas from the U.S. to Mexico? It’s too soon to know what the long-term impact might be, but for now, gas exports remain near record highs and the pipeline buildout within Mexico is proceeding. That’s not to say, however, that the infrastructure work has gone without its own set of challenges — many of those were apparent well before the recent political changes. Today, we begin a series examining the opportunities and potential pitfalls ahead this year for Mexico’s natural gas pipeline infrastructure additions.