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Kinder Morgan (KMI) Set to Bring 7th Elba LNG Train Online

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Kinder Morgan, Inc. (KMI - Free Report) recently asked for regulatory permission to bring the seventh liquefaction train online at the Elba Island liquefied natural gas (LNG - Free Report) export facility in Georgia, per Reuters.

The $2-billion facility’s construction process started on Nov 1, 2016 after receiving project authorizations from the regulatory body on Jun 1. The company has six units running at the site with a liquefying capacity of 0.3 MTPA per unit. The Unit 7 is at the commissioning stage. Kinder Morgan is seeking FERC approval to bring Train 8 into service. Notably, all the 10 units are expected to come online by the end of this summer. The company has Royal Dutch Shell plc as a long-term client of the project.

Notably, the LNG export market has sustained a hit from weak energy demand that stemmed from coronavirus-induced lockdowns and travel bans. Several LNG exporters have witnessed cargo cancellations from their clients during this unprecedented period. The situation has led to lower utilization at terminals.

In fact, Kinder Morgan’s Elba facility has not exported a cargo since January. Cheniere Energy, Inc. (LNG - Free Report) operates the Sabine Pass facility in Louisiana and Corpus Christi unit in Texas, which have witnessed similar market volatility and observed lower gas deliveries. However, some terminals are experiencing better utilization. Recently, Sempra Energy’s (SRE - Free Report) Cameron LNG in Louisiana and Dominion Energy's Cove Point facility in Maryland have observed high feed gas deliveries.

Before the pandemic, the United States was expected to become the world’s biggest LNG exporter by 2024. Currently, the export capacity stands at 9.7 billion cubic feet per day (Bcfd). The LNG export capacity was expected to increase to 9.8 Bcfd by the end of this year and 10.5 Bcfd next year.

Zacks Rank & Price Performance

Currently, Kinder Morgan has a Zacks Rank #3 (Hold). The company’s shares have declined 1.1% over the past three months against 9.6% rise of the industry it belongs to.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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