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Kinder Morgan Brings Final Train at Elba Facility Online

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Kinder Morgan, Inc. (KMI - Free Report) recently announced that it has brought the Movable Modular Liquefaction Unit 7 online under the Elba Liquefaction project. With this latest move, full commercial operations at the $2-billion facility have kickstarted.

The facility’s construction process started on Nov 1, 2016 after receiving project authorizations from the regulatory body on Jun 1. The company now has 10 units running at the site, with a liquefying capacity of 0.3 MTPA per unit. It has a total capacity of 2.5 million tons per annum of LNG for export.

Trains 1-6 and 8-10 were already in service. Notably, all the 10 units were earlier expected to come online by the end of this summer. It has EIG Global Energy Partners as a partner at the facility. The liquefaction facility has Royal Dutch Shell plc as a long-term client of the project.

Importantly, the LNG export market has sustained the impact of weak energy demand that stemmed from coronavirus-induced lockdowns and travel bans. Several LNG exporters witnessed cargo cancellations from clients during this unprecedented period. The overall situation resulted in lower utilization at terminals. In fact, Kinder Morgan’s Elba facility has not exported a cargo for a brief period of time.

Cheniere Energy, Inc. (LNG - Free Report) operates the Sabine Pass facility in Louisiana and Corpus Christi unit in Texas, which witnessed similar market volatility and observed lower gas deliveries. However, some terminals experienced better utilization.

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

Price Performance

The company’s shares have declined 12.3% over the past three months compared with 3.5% fall of the industry it belongs to.

Zacks Rank and Stock to Consider

Currently, Kinder Morgan has a Zacks Rank #3 (Hold). A better-ranked player in the energy space is Holly Energy Partners, L.P. , which holds a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Holly Energy’s bottom line for 2021 is expected to rise 10% year over year.

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