Kinder Morgan Elba Island LNG Exports Delayed – Again

Two weeks ago the Federal Energy Regulatory Commission (FERC) granted a request to Kinder Morgan to “introduce feed gas, back-up fuel, and BOG fuel” to the first of what will be 10 production units at its Elba Island, Georgia LNG export facility (see One Step Closer: FERC OKs Feed Gas to Elba Island LNG). We told you in February that Kinder said it will launch the first of its 10 LNG export mini-trains by the end of March this year (see Kinder Morgan Takes Another Baby Step with Elba Island LNG). Scrap that.
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Permian NatGas Price Falls to $0.12/Mcf Following Equipment Failure

Reuters is reporting that the price of natural gas selling at the Waha Hub in the Permian Basin (West Texas) averaged just $0.12 (12 cents) per thousand cubic feet (Mcf) yesterday, a new record low. But wait! MDN reported last November the price at Waha had hit minus 1 cent/Mcf–people paying someone else to take their gas (see Permian Gas at Waha Hub Briefly Trades at $0, Implications for M-U). True–but that was for a three-hour period last November. Yesterday’s low price was the average for the entire day.
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NGPL Pipe Will Flow M-U Gas to Gulf Coast for LNG Export

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We’ve come across information about Kinder Morgan’s Natural Gas Pipeline Company of America LLC (NGPL) that intrigues us and makes us think that Marcellus/Utica gas either already is, or soon will be, traveling along NGPL from the Midwest all the way to the Gulf Coast to feed just about any of the existing or under construction LNG export plants in the region.
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Kinder Morgan Takes Another Baby Step with Elba Island LNG

Elba Island LNG

Kinder Morgan’s Elba Island LNG, situated along the Georgia coastline near Savannah, is supposed to launch the first of its 10 LNG export mini-trains by the end of first quarter this year, and have all 10 up and running by the end of the year (see Elba Island LNG Won’t be Fully Online Until “End of 2019”). Good news: FERC has just granted permission to begin flowing feed gas into the facility for testing.
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Elba Island LNG Won’t be Fully Online Until “End of 2019”

Elba Island LNG

Elba Island LNG, situated along the Georgia coastline near Savannah, was originally due to begin operations now, in the fourth quarter of 2018 (see Elba Island, Ga. LNG Export Startup Delayed to 4Q18). But in October Kinder Morgan, the builder and owner of the project, delayed the startup until first quarter of next year (see Elba Island, Ga. LNG Export Startup Delayed (Again) – Now 1Q19). Elba Island will be the second LNG export facility along the East Coast, after Cove Point in Maryland. As we previously noted, Elba is quite a bit smaller than Cove Point. Whereas Cove Point, which has been up and running since March, can take in and liquefy up to 3.5 billion cubic feet per day (Bcf/d) of natural gas, Elba Island will be able to liquefy up to 350 million cubic feet per day (MMcf/d)–just 10% of Cove Point’s capacity. In a post on the U.S. Energy Information Administration website yesterday, we learned that Elba will *begin* operation in early 2019, but it won’t be *fully* up to speed until the end of 2019.
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Elba Island LNG Key for Kinder Morgan Profits in 2019

Yesterday Kinder Morgan, one of (perhaps THE) country’s largest midstream company, issued guidance (their best guess) for how much money the company will make in 2019. Aimed at investors, of course. Usually these types of things are dry as toast, but we happened to notice the third sentence in the update which says Elba Island, Kinder’s LNG export facility on the coast of Georgia, along with the Gulf Coast Express pipeline project, will both enter service in 2019 and will help lead the company to record revenue–about 10% more revenue next year than was generated this year. Which got us to thinking once again about Elba Island, and the Marcellus molecules that will get exported from it. It also reminded us of a recent email exchange we had with a subscriber who swears that LNG shipments are already departing from the facility.
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Kinder Morgan Cancels UMTP – Utica Marcellus Texas Pipeline

Once again it seems environmentalists in Kentucky have won–stopping yet another NGL (natural gas liquids) pipeline. On Wednesday Kinder Morgan, one of (perhaps the) largest pipeline companies in North America, announced it is canceling plans to convert part of its Tennessee Gas Pipeline (TGP) that currently flows natural gas from the Gulf Coast to the northeast, to reverse the pipeline and flow natural gas liquids (NGLs) from the Marcellus/Utica region to the Gulf Coast. The project, called Utica Marcellus Texas Pipeline (UMTP), would have cost $4 billion. Instead, Kinder says it will still seek to reverse a big portion of TGP, but will instead flow M-U natgas south, instead of NGLs.
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Elba Island, Ga. LNG Export Startup Delayed (Again) – Now 1Q19

The East Coast’s second LNG export plant to come online, after Cove Point in Maryland, will be Elba Island in Georgia. In July, Kinder Morgan, the builder and primary sponsor of the project, pushed back startup for the plant from the third until fourth quarter of this year (see Elba Island, Ga. LNG Export Startup Delayed to 4Q18). In what appears to be a pattern, Kinder has just delayed startup again–now estimated to be first quarter of next year.
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Opposition to Kinder Morgan NGL Pipeline Plan Builds in Kentucky

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What is it about Kentucky? Is everybody in the Bluegrass State allergic to NGL (natural gas liquids) pipelines? Another government official, this time the mayor of Lexington, is the latest (in a long list) to oppose Kinder Morgan’s plan to convert part of their Tennessee Gas Pipeline to flow NGLs–called the Utica Marcellus Texas Pipeline (UMTP) project.
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Massachusetts Throws Up Roadblocks for Pipeline Expansion

Massachusetts is throwing up more roadblocks and hoops in order to slow down (stop?) a Kinder Morgan project to expand capacity of its Tennessee Gas Pipeline (TGP) in the Springfield, Ma. area. Columbia Gas of Massachusetts and Holyoke Gas and Electric have both requested more natural gas from TGP. They need it, desperately. Kinder Morgan’s solution is to expand the delivery capability of the pipeline in the region by adding a minuscule 2.1 miles of new looping pipeline (buried next to an existing TGP pipe), upgrading a compressor station, and building a new connection, called a delivery gate. It’s a minimal project, and yet Massachusetts has just ruled Kinder will have to conduct a months (years?) long, full-blown environmental impact statement before they can do the work. Which we find strange. TGP is a federal, not state, regulated pipeline. TGP plans to file an application for the project, known as the “261 Upgrade Project” (named after Compressor Station 261), with the Federal Energy Regulatory Commission in September. Massachusetts does not have jurisdiction over the building of the project! Yet they are demanding an environmental impact study. If we were TGP, we’d tell Mass. to get lost…
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Elba Island, Ga. LNG Export Startup Delayed to 4Q18

Elba Express – click for larger version

Southern LNG, a unit of Kinder Morgan, filed a request in March with the Dept. of Energy asking the DOE for “blanket authorization” to export LNG from the Elba Island LNG plant in Georgia beginning in the third quarter of this year (see Elba Island LNG Wants to Start Up in Q3 This Year). Kinder has now changed its tune and says it will fourth quarter, not third, for initial startup. Elba Island will be the second East Coast LNG export plant to go online, following the now operational Cove Point LNG plant. Elba is quite a bit smaller than Cove Point. Whereas Cove Point can take in and liquefy up to 3.5 billion cubic feet per day (Bcf/d) of natural gas, Elba Island will be able to liquefy up to 350 million cubic feet per day (MMcf/d)–just 10% of Cove Point’s capacity. Still, Elba Island is an important project, because it will almost certainly be Marcellus gas feeding it. How so?…
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M-U Companies Collaborate with Eco Group on Pipeline Report

Over the years the Nature Conservancy, whose mission is “to conserve the lands and waters on which all life depends,” has put its support behind restrictive, anti-drilling measures. However, they’re not typically one of the Big Green groups that actively goes out of its way to block all fossil fuel extraction. They’re not as bad as the Sierra Club, or NRDC, or Earthworks. In what is perhaps a new chapter in cooperation with the industry (sure to get them tossed off the Christmas card list by other Big Green groups), the Nature Conservancy worked with eight of the largest pipeline companies in the U.S. (all but one with operations in the Marcellus/Utica) to produce a report titled, “Improving Steep-Slope Pipeline Construction to Reduce Impacts to Natural Resources” (full copy below). The report’s aim is to provide a list of best practice aimed at reducing the environmental impacts of natural gas pipeline construction. Particularly in areas prone to landslides. Working with Nature Conservancy on the report was Dominion Energy, Enbridge, EQT Midstream Partners, Kinder Morgan, NiSource, Southern Company Gas, UGI Energy Services and Williams–all of which have committed to adopting the guidelines put forth in the report. Notice that Nature Conservancy’s approach is not “never build another pipeline again”–as it is for most Big Green groups (including the ones we listed above). Instead, Nature Conservancy worked with pipeline companies to develop standards and practices that will protect the environment, while still allowing for pipeline construction. That is, they are being reasonable. Hats off to the Nature Conservancy for their efforts and reasonableness. Unfortunately for them, they are now sure to be ostracized by their Big Green brethren…
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Kinder Morgan Says No Thx to Canadian Civil War, Selling Pipeline

An interesting development in the pipeline wars. Kinder Morgan has just agreed to sell its Trans Mountain Pipeline system to the Canadian government for C$4.5 billion ($3.5 billion U.S.). Why? Kinder is tired of the ongoing civil war in Canada over extending Trans Mountain from the oil sands of Alberta through British Columbia to the coast for exporting to Asia. As we reported last week, British Columbia is blocking the project and Alberta is now fighting back–and it’s nasty, a civil war in every way except armed conflict (see Canadian Civil War Previews What’s Coming in NY re Pipelines). The federal Canadian government wants this pipeline project to happen. Kinder lost its appetite to make it happen, so Canada is buying the entire project from Kinder, to ensure it gets built. What does an oil pipeline in western Canada have to do with the Marcellus/Utica? It’s a preview of things to come in U.S., where NY Gov. Andrew Cuomo is blocking pipeline projects that PA and other states critically need. We’re watching what happens with the Trans Mountain project as a proxy for what may happen here at home…
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