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Texas Intrastate Natural Gas Pipeline Group Kinder Morgan's Texas Intrastate Natural Gas Pipeline Group, which operates primarily along the Texas Gulf Coast, consists of the following four natural gas pipeline systems Kinder Morgan Texas Pipeline, Kinder Morgan Tejas Pipeline, Mier-Monterrey Mexico Pipeline and Kinder Morgan North Texas Pipeline. The two largest systems in the group are Kinder Morgan Texas Pipeline and Kinder Morgan Tejas Pipeline. These pipelines essentially operate as a single pipeline system, providing customers and suppliers with improved flexibility and reliability. The combined system includes approximately 6,000 miles of intrastate natural gas pipelines with a peak transport and sales capacity of approximately 5.2 billion cubic feet per day of natural gas and approximately 126 billion cubic feet of on-system natural gas storage capacity. In addition, the combined system, through owned assets and contractual arrangements with third parties, has the capability to process 685 million cubic feet per day of natural gas for liquids extraction and to treat approximately 180 million cubic feet per day of natural gas for carbon dioxide removal. Collectively, the combined system primarily serves the Texas Gulf Coast by selling, transporting, processing and treating gas from multiple onshore and offshore supply sources to serve the Houston/Beaumont/Port Arthur/Austin industrial markets, local gas distribution utilities, electric utilities and merchant power generation markets. It serves as a buyer and seller of natural gas, as well as a transporter of natural gas. Included in the operations of the Kinder Morgan Tejas system is the Kinder Morgan Border Pipeline system. Kinder Morgan Border Pipeline owns and operates an approximately 97-mile, 24-inch diameter pipeline that extends from a point of interconnection with the pipeline facilities of Pemex Gas Y Petroquimica Basica at the International Border between the United States and Mexico in Hidalgo County, Texas, to a point of interconnection with other intrastate pipeline facilities of Kinder Morgan Tejas located at King Ranch, Kleburg County, Texas. The pipeline has a capacity of approximately 300 million cubic feet of natural gas per day and is capable of importing this volume of Mexican gas into the United States or exporting this volume of gas to Mexico. The Mier-Monterrey Pipeline consists of a 95-mile natural gas pipeline that stretches from the International Border between the United States and Mexico in Starr County, Texas, to Monterrey, Mexico and can transport up to 375 million cubic feet per day. The pipeline connects to a 1,000-megawatt power plant complex and to the PEMEX natural gas transportation system. The Kinder Morgan North Texas Pipeline consists of an 82-mile pipeline that transports natural gas from an interconnect with the facilities of Natural Gas Pipeline Company of America LLC (NGPL) in Lamar County, Texas to a 1,750-megawatt electric generating facility located in Forney, Texas, 15 miles east of Dallas, Texas. It has the capacity to transport 325 million cubic feet per day of natural gas. The system is bi-directional, permitting deliveries of additional supply from the Barnett Shale area to NGPL's pipeline as well as power plants in the area. Supply. The Intrastate Group purchases natural gas directly from producers attached to the system in South Texas, East Texas, West Texas and along the Texas Gulf Coast. In addition, it purchases gas at interconnects with third-party interstate and intrastate pipelines. There is an ongoing supply development program to offset natural declines in production along its system and to secure supplies for additional demand in its market area. The Intrastate Group has access to both onshore and offshore sources of supply including the major plays located in East and South Texas and liquefied natural gas from the Freeport LNG terminal near Freeport, Texas and from the Golden Pass Terminal currently under development by ExxonMobil south of Beaumont, Texas. Gathering, Treating and Processing. The Intrastate Group owns and operates various gathering systems in South and East Texas. These systems aggregate natural gas supplies into the main transmission pipelines, and in certain cases, aggregates natural gas that must be processed or treated at its own or third-party facilities. The Intrastate Group owns plants that can process up to 135 million cubic feet per day of natural gas for liquids extraction, and has contractual rights to process approximately 550 million cubic feet per day of natural gas at third-party owned facilities. Additionally, it owns and operates three natural gas treating plants that provide carbon dioxide and/or hydrogen sulfide removal. It can treat up to 85 million cubic feet per day of natural gas for carbon dioxide removal at the Fandango Complex in Zapata County, Texas, 50 million cubic feet per day of natural gas at the Indian Rock Plant in Upshur County, Texas and approximately 45 million cubic feet per day of natural gas at the Thompsonville Facility located in Jim Hogg County, Texas. Storage. The North Dayton natural gas storage facility, located in Liberty County, Texas, has two existing storage caverns providing approximately 6.3 billion cubic feet of total capacity, consisting of 4.2 billion cubic feet of working capacity and 2.1 billion cubic feet of cushion gas. A third cavern that will add an estimated 6.5 billion cubic feet of incremental working natural gas storage capacity is under development, and is expected to be available in mid-2010. Additionally, the Intrastate Group operates a salt dome storage facility located near Markham, Texas. The facility was expanded in 2008 and now consists of five salt dome caverns with approximately 24.8 billion cubic feet of working natural gas capacity and up to 1.1 billion cubic feet per day of peak deliverability. It also operates two salt dome caverns, known as the Stratton Ridge Facilities, in Brazoria County, Texas. The Stratton Ridge Facilities have a combined working natural gas capacity of 1.4 billion cubic feet and a peak day deliverability of 150 million cubic feet per day. In addition to the aforementioned storage facilities, the Intrastate Group holds approximately 14 billion cubic feet of third party storage capacity which is connected to its system. The Intrastate Group also owns the West Clear Lake natural gas storage facility located in Harris County, Texas. This 96 billion cubic feet facility is currently leased to, and operated by, a third party. Markets. Texas is one of the largest natural gas consuming states in the country. The natural gas demand profile in the Intrastate Group's market area is primarily composed of industrial (including on-site cogeneration facilities), merchant and utility power, and local natural gas distribution consumption. The industrial demand is primarily year-round load. Merchant and utility power demand peaks in the summer months and is complemented by local natural gas distribution demand that peaks in the winter months. Competition. The Texas intrastate natural gas market is highly competitive, with many markets connected to multiple pipeline companies. The Intrastate Group competes with interstate and intrastate pipelines, and their shippers, for attachments to new markets and supplies and for transportation, processing and treating services. |
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