Kinder Morgan blueprint for pipeline expansion adds another 240K bbl/day

Kinder Morgan (KMI, KMP) is designing its Trans Mountain pipeline expansion with room to add another 240K bbl/day even as it seeks approval to nearly triple oil deliveries on the existing system.

The expansion scenario is buried near the end of a response the company filed with regulators this month as part of an ongoing review of a $5.4B plan to increase capacity of the Edmonton-to-Vancouver oil pipeline to 890K bbl/day from 300K.

The expanded blueprint would increase capacity on the pipeline network to 1.13M bbl/day, roughly equal to all crude oil pumped from conventional wells in Canada in 2012.

The potential expansion is sure to inflame already heated opposition among environmental groups, First Nations and some municipalities.

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Comments (14)
  • Dividend Pro
    , contributor
    Comments (1209) | Send Message
    This is REALLY old news. It was proposed months ago, and media reported it then.
    28 May 2014, 02:37 PM Reply Like
  • Ruffdog
    , contributor
    Comments (3435) | Send Message
    To raise TM capacity to 1.13bb/d is old news? I am a KMP holder and did not know that, bought back my jun 77.5 calls yesterday.
    30 May 2014, 09:28 AM Reply Like
  • hhmcdon
    , contributor
    Comments (324) | Send Message
    The difficulty all of the pipeline companies, Kinder Morgan being the largest, have in acquiring right-of-way and political approval for new pipelines and ancillary facilities demonstrates the rapidly increasing value of present assets. I don't see the detractors ( Hedgeye Barrons etal ) assigning any value to this most precious asset.
    28 May 2014, 03:45 PM Reply Like
  • bigbenorr
    , contributor
    Comments (1156) | Send Message
    I know right, their assets are actually probably appreciating in value but they are allowed to depreciate them on paper. What a deal!
    28 May 2014, 04:41 PM Reply Like
  • Pipeline Guy
    , contributor
    Comments (11) | Send Message
    hhmcdon is absolutely right. Corrupt, anti-Canada Obama blocking Transcanada's Keystone expansion is one thing, but now, if even Canadians themselves are blocking Kinder Morgans TransMountain expansion.... then existing (approved before left wing nuts took over) pipelines will start to become priceless like New York City Taxi Medallions back in the days when you had to bribe a judge to get one, or pay the black market price of $1million.
    28 May 2014, 05:12 PM Reply Like
  • Union Trade Assoc
    , contributor
    Comments (1152) | Send Message
    That's a wonderful point ( hhmcdon ) and not often mentioned. I see the inherent value of existing pipelines positively surging in value .. If you can't build them ya buy em, merge, takeover - and what that does probably creates a valuation fundamentally not entirely based upon earnings. A share price expansion w/o moving the p.e A lot more to be heard about asset valuation across the sector.


    Potentially Priceless .. don't know, but the following Reader comments aren't far off the mark regardless of political or conspiracy theories.
    15 Aug 2014, 01:11 AM Reply Like
  • Union Trade Assoc
    , contributor
    Comments (1152) | Send Message
    They're just delaying the inevitable . . .
    Good comments, all.
    28 May 2014, 05:42 PM Reply Like
  • Brucejfern
    , contributor
    Comments (1724) | Send Message
    Not only old news but this is a fly spec when compared to the whole of KMP so this isn't going to move the dial enough to move shareholders into KMP. Larger MLPs run up against that old problem of needing higher and higher levels of capex to move their earnings/dcf needle.


    Smaller more nimble MLPs like GEL and ACMP offer double-digit distribution growth while KMP struggles to do 6% growth.
    28 May 2014, 07:04 PM Reply Like
  • bigbenorr
    , contributor
    Comments (1156) | Send Message
    Yeah but at these valuations GEL and ACMP are only yielding around 4%. Isn't there an argument to be made for KMP/KMI on valuation? I think KMP is over 7% yield right now.
    28 May 2014, 07:12 PM Reply Like
  • Value Doc
    , contributor
    Comments (855) | Send Message
    It's quite a bit more than a "fly spec" even for an MLP the size of KMP.


    Why are you touting ACMP? I thought you were deeply negative on MLPs with IDRs. Why do you no longer tout MWE (which has no IDRs)?
    28 May 2014, 07:54 PM Reply Like
  • paul1942
    , contributor
    Comments (57) | Send Message
    Every post from Bruce is knocking KM and touting another mlp. I have to wonder if he is the one who filed the lawsuit or is working for him. Does he even own any KM?
    28 May 2014, 11:43 PM Reply Like
  • HaroldL
    , contributor
    Comments (470) | Send Message
    The article didn't cite any concern about the possibility that KMP will not be able to finance the $5.4 billion project because of its high cost of capital due to the IDRs. That's because there is no such concern. KMP's high cost of capital is just a made up argument raised by people who want to make a quick buck on a near term transaction.
    30 May 2014, 02:27 PM Reply Like
  • Anasazi101
    , contributor
    Comments (3303) | Send Message
    Pipeline Guy...Hope you aren't a relative or friend of the family...??


    Didn't really see where HmmmDon, said anything about, "anti-Canada Obama.."
    That was all you....!!!
    Do you know anything about the Governor and Court Action, by landowners and Enviro's in Nebraska...Nebraska's Constitution...??
    Maybe even some other big Money?? Didn't think so...??


    I believe the Keystone XL will probably go through eventually, if it doesn't ? Oh, well...
    Believe similar problems are afoot for the TM, "First Nations", Environmental Groups, Alberta, big money, etc., etc..
    Don't see any ties to American politics???? Canada has their own...
    Long KMP, KMR...
    ps, the NY Taxi Medallion thing is on MSN-Money...Not here.
    31 May 2014, 04:19 PM Reply Like
  • Anasazi101
    , contributor
    Comments (3303) | Send Message
    I think Bruce is only offering a differing viewpoint, we do get a lot of Rah, rah-ing on here for the Kinder family of investments...
    Even when they go down, for different reasons...?
    Maybe Bruce is just a contrarian..??
    But as always we should do our own research anyway...IMO...This is part..
    KMP, KMR...
    31 May 2014, 04:29 PM Reply Like
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