Kinder Morgan said Wednesday that it had leased nearly 11,000 acres near the Houston Ship Channel that the Houston-based pipeline giant would use as underground pore space as it expands its carbon storage business.
Kinder Morgan Energy Transitions Ventures agreed last week to lease the 10,800 acres from TGS Cedar Port Partners, a rail service operator that oversees a 15,000-acre industrial park near the channel, the company said. The lease gives Kinder Morgan access to underground caverns capable of storing more than 300 million metric tons of carbon dioxide.
Securing space along the channel paves the way for Kinder Morgan to offer solutions to nearby industrial facilities as they look for ways to capture and store carbon dioxide billowing from their smokestacks. It joins several big oil companies in a race to develop carbon storage projects in East Texas.
“Significant distance between the emitting source and the sequestration site often challenges (carbon capture and storage) economics, and we’ve secured a very strategically located site,” Kinder Morgan CEO Kim Dang said Wednesday during an earnings call, according to a transcript provided by Capital IQ.
Kinder Morgan already moves and stores oil, gas and petroleum-based fuels and chemicals. It also handles carbon dioxide through its enhanced oil recovery business, a process by which oil companies inject carbon dioxide underground to extract more oil. To that end, Kinder Morgan expects that CO2 will be increasingly in demand in the Permian Basin as the geology matures and oil companies must work harder to remove oil from the ground.
The company on Wednesday reported net income of $746 million on $3.8 billion in revenue during the first quarter, up 10% from $679 million on $3.9 billion in revenue during the same period last year.
