(Reuters) - U.S. pipeline operator Kinder Morgan Inc (KMI.N) on Wednesday posted a second straight quarterly loss as it took a $1-billion impairment charge after a steep fall in natural gas prices caused by the coronavirus crisis hurt the value of some of its assets.
Energy companies have been hard hit by the COVID-19 pandemic that slashed fuel demand by about 30%, hurting natural gas prices and leading to lower demand for crude to be refined into products.
“Sharp declines in crude oil and natural gas production along with reduced demand for refined products due to the economic shutdown in the wake of the pandemic clearly affected our business and will continue to do so in the near term”, KMI President Kim Dang said.
The company said two of its key natural gas projects remain on track despite the impact from the pandemic. It expects to start its Permian Highway Pipeline in Texas in early 2021 and the final three Elba Island LNG liquefaction plants this summer.
However, an industry source said on Wednesday that a final investment decision on its proposed Permian Pass natural gas pipeline in Texas would likely get pushed out at least a couple of years.
The company said in March the pipeline faced an uncertain future since no customers for the project have been lined up in the current low-price environment.
The company’s CO2 segment, which ships carbon dioxide to oilfields for extracting crude, also came under pressure due to lower production and volatile oil prices.
Net loss attributable to the company stood at $637 million, or 28 cents per share, in the second quarter ended June 30, compared with a profit of $518 million, or 23 cents per share, a year earlier. Excluding items, the company reported a profit of 17 cents per share, in-line with Wall Street estimates, according to IBES Refinitiv data.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Ramakrishnan M.