Kinder Morgan reported a loss in the second quarter compared to a year earlier as the coronavirus pandemic hit energy demand and significantly reduced volumes in some of its pipelines. The company posted $637 million (28 cents/share) loss in the April-June quarter of 2020, compared to a profit of $518 million (23 cents/share) in the same period last year. Meanwhile, revenue fell 20% from $3.21 billion to $2.56 billion over the same period.
The pipeline operator cut its 2020 expansion capital budget by $660 million, while maintaining major projects, including Permian Highway Pipeline, to remain on schedule. The company said that there are weaker-than-expected growth potential and fewer viable expansion projects in the near term as it must live within its cash flow.
Kinder Morgan expects weak demand for refined products along with the steep drops in crude oil and natural gas output to continue in the near term. Feedgas deliveries via its pipelines to LNG plants also declined in the second quarter compared to the first quarter as low demand forced buyers to cancel cargoes scheduled to be loaded at the terminals.
