Kinder Morgan Inc. (NYSE: KMI) reports that its Texas Intrastate Pipelines group has entered into a 20-year firm transportation services agreement with SK E&S LNG LLC (SK LNG), a subsidiary of SK E&S Co. LTD.
Under the agreement, KMI will invest more than $150 million to provide more than 320,000 dekatherms per day of firm natural gas transportation services to support SK LNG’s Train 3 liquefied natural gas export capacity at Quintana Island, Texas. This train is part of Freeport LNG Development’s Freeport LNG export facility which in total will liquefy up to 13.2 million tonnes per annum once fully operational.
KMI will construct and operate 40 miles of pipeline extending from its existing Kinder Morgan Tejas mainline to an interconnection point with Freeport LNG’s existing pipeline located in Stratton Ridge, Texas. KMI will also expand and construct additional compression on its existing Kinder Morgan Texas and Kinder Morgan Tejas pipeline systems to provide these services upon the startup of Train 3, which is expected to occur in the third quarter of 2019. This transportation services agreement provides for the required expansion of the KMI intrastate system by over 1 billion cubic feet per day and will provide additional capacity to the Freeport and Chocolate Bayou areas.