Tennessee Gas Pipeline Announces Final Investment Decision on Mississippi Crossing Project

Rhea-AI Summary

Tennessee Gas Pipeline (TGP), a Kinder Morgan (NYSE: KMI) subsidiary, has announced its final investment decision on the Mississippi Crossing Project (MSX). The $1.4 billion project will transport up to 1.5 Bcf/d of natural gas through approximately 206 miles of pipeline and two new compressor stations, connecting Greenville, Mississippi to Butler, Alabama.

The project has secured long-term, binding transportation agreements for all capacity, with discussions ongoing for an additional 0.4 Bcf/d. Expected to be operational by November 2028, the MSX Project will provide the Southeast region with increased access to diverse gas supplies, supporting growing energy demand and potentially lowering energy costs.

This project represents part of KMI's $3.1 billion expansion capital investment, alongside the SNG South System 4 Expansion.

Positive

• Secured 100% capacity through long-term binding transportation agreements
• Potential for additional 0.4 Bcf/d in long-term commitments
• $1.4 billion infrastructure investment indicating strong growth prospects
• Project addresses growing energy demand in Southeast U.S. markets

Negative

• Significant capital expenditure of $1.4 billion
• Long timeline to operational status (November 2028)
• Project completion dependent on pending permits and clearances

Insights

Financial Analyst

The $1.4 billion Mississippi Crossing Project marks a substantial capital investment that strengthens KMI's market position in natural gas infrastructure. With binding agreements securing the full 1.5 Bcf/d capacity and potential for an additional 0.4 Bcf/d, this project promises stable, long-term revenue streams through 2028 and beyond. The project's economics are particularly compelling given the robust fundamentals in natural gas markets, driven by growing LNG exports and power generation demand.

Combined with the SNG South System 4 Expansion, KMI has now committed $3.1 billion to strategic growth initiatives. The project's scale and long-term contracts provide visibility into future cash flows, supporting KMI's dividend stability. For context, this investment represents approximately 2.4% of KMI's market cap, making it a meaningful growth driver without overleveraging the balance sheet.

Energy Infrastructure Expert

The MSX Project's strategic value lies in its positioning to connect multiple supply basins to high-demand Southeast markets. The 206-mile pipeline system, featuring large-diameter 42-inch and 36-inch pipes, represents significant transmission capacity that will help alleviate regional supply constraints. The two new compressor stations will enhance system flexibility and reliability.

Think of this as adding a new major highway between energy-rich regions and growing metropolitan areas - it's not just about current demand, but preparing for future growth. The project's timing aligns perfectly with projected increases in natural gas demand from LNG exports and power generation. The potential for an additional 0.4 Bcf/d expansion shows market confidence in the project's strategic location and design.

Project designed to transport up to 1.5 Bcf/d of natural gas benefiting Southeast U.S. markets

HOUSTON--(BUSINESS WIRE)-- Tennessee Gas Pipeline, L.L.C. (TGP), a subsidiary of Kinder Morgan, Inc. (NYSE: KMI), today announced its decision to proceed with its Mississippi Crossing Project (MSX Project) after securing long-term, binding transportation agreements with customers for all the capacity.

“This transformative project will benefit the Southeast region as it will provide incremental access to diverse sources of supply,” said Natural Gas Pipelines President Sital Mody. “The additional supply will help satisfy growing energy demand and lower energy costs, allowing power generators and other energy suppliers in the region to attract new residential, commercial and industrial opportunities. We are in final discussions with customers for up to an additional 0.4 Bcf/d of long-term commitments, which would require additional capital for incremental horsepower.”

The approximately $1.4 billion MSX Project is designed to transport up to 1.5 Bcf/d of natural gas and primarily involves the construction of nearly 206 miles of 42-inch and 36-inch pipeline and two new compressor stations. The project will originate near Greenville, Mississippi, and conclude near Butler, Alabama, with connections to the existing TGP system and third-party pipelines to provide critical supply access sourced from multiple supply basins. Pending the receipt of all required permits and clearances, the project is expected to be placed in service November 2028.

“The fundamentals in the natural gas market are robust, with significant growth expected over the next five years from LNG exports, exports to Mexico and power generation,” said KMI CEO Kim Dang. “With today’s announcement, KMI has sanctioned approximately $3.1 billion (KMI share) in expansion capital between the SNG South System 4 Expansion and TGP’s Mississippi Crossing Project. We expect to announce additional projects in the coming months.”

About Kinder Morgan, Inc.

Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient, and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 79,000 miles of pipelines, 139 terminals, 702 billion cubic feet of working natural gas storage capacity and have renewable natural gas generation capacity of approximately 6.1 Bcf per year with an additional 0.8 Bcf in development. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO₂, renewable fuels and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, jet fuel, chemicals, metals, petroleum coke, and ethanol and other renewable fuels and feedstocks. Learn more about our work advancing energy solutions on the lower carbon initiatives page at www.kindermorgan.com.

Important Information Relating to Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. Generally, the words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,” “estimates,” and similar expressions identify forward-looking statements, which are generally not historical in nature. Forward-looking statements in this news release include express or implied statements pertaining to energy demand, associated natural gas demand and the completion, timing and benefits of the MSX Project. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although KMI believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance as to when or if any such forward-looking statements will materialize nor their ultimate impact on our operations or financial condition. Important factors that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements include: the timing and extent of changes in the supply of and demand for the products we transport and handle; commodity prices; regulatory and policy changes; delays or cost overruns affecting expansion projects; and the other risks and uncertainties described in KMI’s reports filed with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year-ended December 31, 2023 (under the headings “Risk Factors” and “Information Regarding Forward-Looking Statements” and elsewhere) and its subsequent reports, which are available through the SEC’s EDGAR system at www.sec.gov and on our website at ir.kindermorgan.com. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, KMI undertakes no obligation to update any forward-looking statement because of new information, future events or other factors. Because of these risks and uncertainties, readers should not place undue reliance on these forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241219503173/en/

Katherine Hill

Media Relations

newsroom@kindermorgan.com

Investor Relations

(800) 348-7320

km_ir@kindermorgan.com

www.kindermorgan.com

Source: Kinder Morgan, Inc.

FAQ

What is the total capacity of KMI's Mississippi Crossing Project?

The Mississippi Crossing Project is designed to transport up to 1.5 Bcf/d of natural gas, with potential for an additional 0.4 Bcf/d through ongoing customer discussions.

When will KMI's Mississippi Crossing Project be operational?

The project is expected to be placed in service in November 2028, subject to receiving all required permits and clearances.

How much is KMI investing in the Mississippi Crossing Project?

The Mississippi Crossing Project represents an approximately $1.4 billion investment by Kinder Morgan.

What is the route of KMI's Mississippi Crossing Project?

The project will span approximately 206 miles from Greenville, Mississippi to Butler, Alabama, including 42-inch and 36-inch pipeline and two new compressor stations.

How does the Mississippi Crossing Project fit into KMI's overall expansion strategy?

The project is part of KMI's $3.1 billion expansion capital investment, which includes both the MSX Project and the SNG South System 4 Expansion.