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Tariq Siddiqui's picture
COO Upstream EP Advisors LLC

Oil & Energy | Business Development | Capital Projects | Offshore Wind -  Proven leader in offshore development and operations, with 25+ years’ expertise in managing business through cycles...

  • Member since 2021
  • 109 items added with 59,396 views
  • Oct 22, 2021
  • 839 views

As natural gas demand continues to outstrip supply, Kinder Morgan Inc. is in preliminary discussions with Texas regulators and other stakeholders about expanding storage capabilities outside its current market area.

WHY ITS HAPPENING
  1. Natural gas demand continues to outstrip supply
  2. Additional natural gas delivery capability is needed, particularly as supply has tightened and commodity prices have risen
  3. A lot of that has to do with coal retirements and just the need to backfill renewable power on an interim basis
  4. Gas producer are working on gas supplies, but are 'disciplined' to bring back volumes out of 'capital discipline'
  5. Although discussion on further gas take away is advance, there is difference between 'need' and 'contract signature.'
  6. LNG export demand is also increasing, and so is the customers interest in carbon content and need for responsibly sourced gas
What Are the Implications?
  1. KM low-carbon efforts so far is focused to three premium LNG cargoes (low-carbon), and few low carbon certifications with gas supply companies - 'All other efforts to lower emission may take longer' according to NGI.
  2. Nearly 70% of Kinder’s backlog supports low carbon infrastructure, including natural gas.
  3. "Carbon capture projects take time to develop". Permitting, financing and infrastructure are some of the factors that have to be considered, according to KM.
  4. Some CO2 pipelines may be repurposed - but not tomorrow.
Bottomline

CCS is going to have to be part of the picture, if climate objectives are going to be met over the long term. Companies like Kinder Morgan are setting expectations for investors “at a rational level of how quickly we think that’s likely to unfold and where we think the first projects get done.”

 

 

 

 

 

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