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OOOOOOOklahoma Where Gas Flows

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Recently filed contract data from Kinder Morgan and Energy Transfer’s Midcontinent Express Pipeline  (MEP) shows contracts being renewed despite pipeline being underutilized. As a refresher, MEP moves natural gas from north Texas and southern Oklahoma to Transco Station 85 in Alabama. Several similar pipeline segments were built out of this area in 2009/2010 and declining production has left the pipeline under-utilized. However, one advantage MEP has is their long-term lease on Enable’s Oklahoma Intrastate System (EOIT). The lease allows MEP to source 272 MMcf/day of capacity from the West Pools of EOIT, giving it access to SCOOP and STACK volumes  from central Oklahoma. Production out of the SCOOP/STACK area is growing and pipeline capacity linking it to the Southeast Gulf is at a premium. As such, MEP’s access to that lease holds significant value and will help keep a portion of the contracted capacity on the pipeline protected into the future. (Tickers: KMI, ETP)

About The Author Justin Carlson

I have over 10 years of experience in data analysis, research, and consulting across the energy sector. I currently serve as Vice President of Research and Managing Director at East Daley Capital, an energy assets research firm that is changing how investors look at midstream energy risk with an asset-driven information service that combines proprietary research with a trusted team of unbiased, experienced energy analysts. My insights and analysis bring greater transparency to the energy financial market by quantifying potential risks by asset and enabling investors to make more informed and accurate projections and investments. Prior to joining East Daley Capital, I was a senior manager at Platts, a division of McGraw Hill Financial, which acquired Bentek Energy, where I was a senior member of the leadership team.