REUTERS: U.S. pipeline operator Kinder Morgan Inc reported a 26per cent rise in quarterly profit on Wednesday, benefiting from higher gas takeaway from Permian Basin through its Gulf Coast Express pipeline.
The pipeline, which can transport 2 billion cubic feet per day (bcfd), came into service in September last year when drillers were burning off natural gas at record rates due to lack of transportation capacity from the shale-rich Permian Basin.
Earnings from natural gas transport volumes rose 14per cent and from natural gas liquids transport volumes jumped 23per cent from a year earlier.
The pipeline operator generated US$1.35 billion, or 59 cents per share, in distributable cash flow (DCF) in the fourth quarter, higher than US$1.14 billion, or 50 cents per share, in the prior quarter. On a year-over-year basis, DCF rose 6per cent.
Investors have been pushing U.S. oil and gas pipeline operators to deliver positive free cash flow as low energy prices and idle shale rigs pressure earnings.
The Houston-based company, which has pipelines as well as storage terminals, said net income rose to US$610 million, or 27 cents per share, in the quarter ended Dec. 31, from US$483 million, or 21 cents per share, a year earlier.
Net income got a boost from a US$1.3 billion non-cash gain related to the sale of Kinder Morgan Canada and the U.S. portion of its Cochin pipeline.
However, the company's CO2 segment, which ships carbon dioxide to oilfields where it is used to extract crude, came under pressure from lower production due to volatile oil prices.
(Reporting by Arunima Kumar in Bengaluru; Editing by Amy Caren Daniel)