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Why Kinder Morgan Underperformed Its Peers Last Week

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Why Kinder Morgan Underperformed Its Peers Last Week PART 1 OF 3

Kinder Morgan: Trans Mountain Project’s Troubles Continue

Kinder Morgan fell 0.5%

Kinder Morgan (KMI) fell 0.5% in the week ending September 29, 2017, and underperformed the broader energy sector. The Energy Select Sector SPDR ETF (XLE) rose 1.9%, while crude oil prices rose 2% for the week. Enterprise Products Partners (EPD) and ONEOK (OKE) rose 0.7% and 1.3%, respectively, for the week. The broader market (SPY) rose 0.7% for the week. The energy sector forms ~6% of the S&P 500 Index (SPX-INDEX).

Kinder Morgan: Trans Mountain Project’s Troubles Continue

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Canada’s National Energy Board

As the above graph shows, Kinder Morgan fell on Tuesday and Wednesday. According to a Reuters report dated September 26, 2017, Canada’s National Energy Board ordered Kinder Morgan’s Canada unit to stop some work on the Trans Mountain expansion project. The work relates to “installing fish spawning deterrent mats in watercourses that will be crossed by the pipeline,” according to the National Energy Board’s letter. According to the board, the conditions haven’t been approved by the board yet. Kinder Morgan can’t start construction “along the pipeline portion of the Project.”

According to a Reuters report dated September 29, 2017, Kinder Morgan Canada—which has stopped the mats installation work—said that if the National Energy Board’s approval for the mats installation doesn’t come soon, it might impact the project’s in-service date.

Legal challenges

Canada’s Federal Court of Appeal will hear about the expansion project’s legal challenges from several parties in the next week.

The project’s ongoing troubles likely impacted Kinder Morgan’s stock performance last week.

Kinder Morgan continues to trade below key moving averages.

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