American Petroleum & CO2 Segment Overview
Growing Demand for Our Natural Gas Transportation & Storage
Assets Leading to Increased Value
Natural Gas Transport
KM NATURAL GAS TRANSPORT & SALES VOLUMES
tbtud
39.2
39.8
41.0 41.5
35.3
30.8
30.4
31.4
KINDER MORGAN
U.S. natural gas demand grew 36% over
the past 7 years, from 78 to 106 bcfd
Favorable recontracting & new opportunities
Able to increase rates and/or term for transport, resulting in reduced
recontracting risk; the base business can be sustained and modestly
grow, for example:
-
-
2015
2016
2017
2018
2019
2020
2021
2022
KM pipeline throughput increased 11 bcfd since 2015
Added capacity, but many long-haul systems are highly utilized on
average & have constraints on peak days, for example:
average contract term
TX Intrastates
2015
3.5 yrs
2022
5.7 yrs
average utilization
2015
2022
TGP
86%
97%
EPNG
67%
86%
Difficult to build long-haul interstate pipeline capacity
Natural Gas Storage
Capacity nationwide has increased only 1% since 2015, KM +3%
excluding acquisition/divestitures
Demand volatility has increased
Previously weather-driven, but now weather + renewables + LNG
Example during winter storm Elliot (December 2022):
Peak 1-day demand = 162 bcf (record)
-
Supply 86 bcf (declined due to well freeze-offs)
Additional volumes lead to growth opportunities, which are tending to be
concentrated along the Gulf Coast in Texas and Louisiana. Growth
investment attributable to $2.6bn stable, contracted, fee-based natural
gas backlog at 3.7x multiple drops to the bottom-line
Increased storage values across our systems
-
As renewable penetration increases, the high level of cyclic demand
further drives value for the unique storage services we can provide to
customers as a reliable backstop
Storage is critical to LNG facilities – demand variability due to weather,
maintenance, cargo cancellations
Able to increase rates and/or term for storage
Rates still below cost to develop greenfield storage
Source for U.S. demand figures Wood Mackenzie, North America Gas Strategic Planning Outlook, March 2023. U.S. working storage capacity per the EIA.
Note: U.S. storage capacity data is only available through year-end 2021.
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