Kinder Morgan (KMI) spent $2.3 billion on growth projects in 2018. The company expects to spend $3.1 billion on capital projects in 2019—35% growth compared to 2018. Currently, Kinder Morgan has a project backlog of ~$5.7 billion. Among the backlog, $3.9 billion belongs to the company’s Natural Gas segment.
Permian Basin projects
Two of Kinder Morgan’s key projects—Gulf Coast Express and the Permian Highway Pipeline project—focus on providing a solution to the Permian Basin’s takeaway constraints. Kinder Morgan owns 35% of the Gulf Coast Express project. DCP Midstream (DCP) and Targa Resources (TRGP) each own 25% of the project. Apache (APA) owns the remaining 15%. The $1.7 billion project is expected to become operational in October.
The Permian Highway Pipeline project is owned 40% by Kinder Morgan, 40% by EagleClaw Midstream Ventures, and 20% by an affiliate of an anchor shipper on the project. Apache has an option to acquire an equity interest in the project. The Permian Highway Pipeline project will transport natural gas from the Permian Basin to the Texas Gulf Coast markets. The project is expected to be in service in 2020.
The first of ten units of the $2 billion Elba Liquefaction Project are expected to be placed in service at the end of the first quarter. The remaining nine units are expected to become operational throughout 2019.
Kinder Morgan’s backlog includes $1.6 billion in projects related to its CO2 segment and $0.1 billion each related to its Products Pipelines and Terminals segments.
Next, we’ll analyze Kinder Morgan’s leverage position.