Kinder Morgan, Inc. KMI has announced its intention to invest in the Gulf Coast Express Pipeline Project as majority of the pipeline transportation capacity has been booked by the shippers.
The shippers have already committed to utilize 85% of the pipeline’s capacity for transporting natural gas. Per the company’s expectation, the shippers will book the rest of the transportation capacity by the initial phase of 2018. Investors should know that Apache Corporation APA, Pioneer Natural Resources Company PXD, DCP Midstream, LP DCP and Targa Resources Corp. TRGP are among the shippers.
The to-be built pipeline project — worth $1.7 billion — will probably have the capacity to carry roughly 1.92 billion cubic feet of natural gas daily to the Texas Gulf Coast area from the Permian Basin. The pipeline, which awaits regulatory consents, is likely to commence operation by October 2019. It is to be noted that Kinder Morgan is likely to start construction by the first quarter of next year. With the operatorship of the project, Kinder Morgan will have 50% stake. Meanwhile, each of Targa Resources and DCP Midstream will probably own 25% stake.
Texas-based Kinder Morgan has the largest network of natural gas pipeline in North America that spreads over almost 70,000 miles. Notably, the company’s midstream properties are linked to all the prospective plays in the United States that are rich in natural gas. These extensive pipeline networks, for which billions of dollars has been invested to date, have been providing the company with stable fee-based revenues.
However, the stock fell 12.8% year to date, wider than the industry’s 0.7% decline.
Consequently, Kinder Morgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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