Kinder Morgan earns $1.4 billion after weatherizing its equipment
The Houston pipeline operator Kinder Morgan said its investments in weatherizing its equipment and facilities paid off during the recent weather storm, allowing it to store, transport and sell natural gas at high prices when supplies were short.
The company said those sales helped it to earn a $1.4 billion profit in the first quarter and swing from a $306 million loss from the first quarter of 2020, when the coronavirus pandemic drove down energy demand, prices and the value of Kinder Morgan’s oil field assets. Revenues soared 68 percent to $5.2 billion from $3.1 billion in the first quarter of 2019.
Kinder Morgan said it would increase its first-quarter dividend by 3 percent from the fourth quarter of 2020. It is the fourth consecutive annual increase in dividends since 2017, the company said.
Kinder Morgan said it bought natural gas ahead of the frigid temperatures that swept through Texas in mid-February and stored it at its weatherized facilities. It also deployed additional personnel and equipment at normally automated facilities to maintain operations and make any necessary repairs during the storm.
As demand and prices soared, Kinder Morgan was able to sell its supplies plus additional natural gas bought during the storm.
Natural gas shortages, which occurred as wellheads froze and processing operations lost power, were a contributor to the power plant outages that left some 4 mil
lion Texans without heat and electricity for days.
Kinder Morgan said that it also took advantage of high electricity prices during the freeze by curtailing its enhanced recovery operations, which inject carbon dioxide into oil fields to boost production. It received part of the profits after its electricity provider sold the power for those operations into wholesale markets.
“We earned a substantial financial benefit,” CEO Steven Kean said during a Wednesday earnings call.
Kinder Morgan’s stock rose about 1 percent Wednesday to $16.69. The company reported its earnings after the market closed.