Kinder Morgan's Next LNG Export Terminal

Aug. 15, 2018 11:21 AM ETKinder Morgan, Inc. (KMI)41 Comments
Callum Turcan profile picture
Callum Turcan


  • Going over the potential conversion of the Gulf LNG import terminal in Mississippi to an LNG export terminal.
  • Kinder Morgan Inc. owns half of this facility and would take lead as operator in the event that this project gets approved.
  • Previous guidance calls for the Gulf LNG terminal to be upgraded to export 11.5 million metric tons of LNG per year.
  • The cost of this development is estimated to run $8 billion.

Kinder Morgan Inc. (NYSE:NYSE:KMI) is currently working on converting an existing liquefied natural gas import terminal, often referred to as a regassification terminal, to an LNG export terminal down in Georgia. The project, known as the Elba Liquefaction and EEC Modification development, will soon be operational. More importantly, those interested in Kinder Morgan Inc. should note that this conversion project may not be some one-off endeavor. Kinder Morgan Inc. also owns half of an existing LNG import terminal in Pascagoula, Jackson County, Mississippi. Known as the Gulf LNG facility, this LNG import terminal was completed in 2011 for a development cost of $1.1 billion. However, in light of America becoming the largest natural gas producer in the world and ultimately a net exporter of natural gas, the terminal is now a stranded asset that is never used. Let’s go over how Kinder Morgan Inc. can change that.

Asset overview

The Gulf LNG terminal is owned by Gulf LNG Holdings Group, which is half-owned and operated by Kinder Morgan and half-owned by a large collection of investment entities. Currently, the terminal is connected to four interstate pipelines (including the Transco system) and a gas processing facility. The pipeline connections are particularly relevant because they could be converted and upgraded to supply natural gas to the terminal instead of being positioned to take gas away from the facility.

Two LNG storage tanks that each have 160,000 cubic meters of storage capacity, a single dock that can handle vessels with up to 250,000 cubic meters of storage capacity, various pumping and compression capabilities, electricity infrastructure, and other related infrastructure are also already present at the Gulf LNG terminal.

At the end of 2017, Kinder Morgan reported the carrying value of its share of the Gulf LNG asset at $461 million. It appears Kinder Morgan has long-term

This article was written by

Callum Turcan profile picture
Associate Director of Research, Co-Editor of Valuentum's Newsletters, Portfolio Manager-----Valuentum (val-u-n-tum) [val-yoo-en-tuh-m] Securities Inc. is an independent investment research publisher, offering premium equity reports, dividend reports, and ETF reports, as well as commentary across all sectors/companies, a Best Ideas Newsletter (spanning market caps, asset classes), a Dividend Growth Newsletter, modeling tools/products, and more. Independence and integrity remain our core, and we strive to be a champion of the investor. Valuentum is based in the Chicagoland area. Valuentum is not a money manager, broker, or financial advisor. Valuentum is a publisher of financial information.-----Please read our Disclaimer that applies to all articles published on Seeking Alpha:

Disclosure: I am/we are long KMI, RDS.B, BP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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