Kinder Morgan (NYSE: KMI) -2% after-hours earnings in Q2 fluctuate to a profit due to improved earnings from natural gas pipelines and fewer write-downs, but lacking analyst expectations.
Q2 distributable cash flow rose 1% from the quarter to $ 1.13 while the DCF / share came in flat Y / Y at $ 0.50, with $ 559 million over DCF over the declared dividend.
KMI's second-quarter project forecast was $ 5.7B, $ 400M less than Q1, plus $ 400M in new projects offset by $ 800M in operational projects and other project capital controls.
KMI expects that 2019 adjusted EBITDA will be slightly below budget, mainly due to the delay in Elba's operating day, lower natural gas liquid prices affecting the CO2 segment, and the impact of 501-G settlements, partially offset by the strong performance to the We St Region Natural Gas Business Unit.
CEO Steven Kean says the company will continue with a South Texas pipeline connection to transport crude from Phillips 66s 900K bbl / day Gray Oak pipeline in the Permian Basin to delivery sites on the Houston Ship Channel.
KMI expects the connection to start service by the end of 2019 with 100K bbl / day; It has contracts to start transporting 75Kbl / day for up to three years.
Kean also says that the ongoing startup of the Elba flow facility must be suspended due to problems that have arisen in its supercooling equipment that produces LNG, but the first unit is expected to be put into use soon.