East Daley Analytics recently reported on the Energy Transfer (ET) South Mississippi and Kinder Morgan (KMI) Mississippi Crossing (MSX) projects. Outside our equity coverage, Boardwalk Pipelines is also pursuing a major expansion, the Kosci Junction, aimed at serving growing natural gas demand in Southeast markets.
Kosci Junction is a proposed greenfield pipeline that would extend east from the existing Greenville Lateral on Texas Gas Transmission (TGT). The pipe would travel 80 miles to Clarke County, MS to an interconnect with Southern Natural Gas (Sonat), and an additional 18-mile segment would deliver gas into the Gulf South mainline near Destin Pipeline.
According to the open season documents, Boardwalk is engaged with an anchor shipper for 600 MMcf/d of the Kosci Junction’s 1.5 Bcf/d of capacity. If successfully commercialized, Boardwalk is targeting a project in-service of April 1, 2029.
Kosci Junction directly competes with KMI’s MSX project on Tennessee Gas Pipeline. As shown on the map, MSX would travel the same distance as the Greenville Lateral on TGT before turning southeast and following a similar path as the proposed Kosci Junction.
These expansions could potentially draw supply from several basins, including the Haynesville, Anadarko, Northeast and Permian. East Daley tracks and forecasts flows through the Gulf Coast region in the monthly Southeast Gulf Supply & Demand Report.
KMI and Boardwalk both held binding open seasons ending November 1. The results of these open seasons may reveal both projects to be commercially viable; but if only one survives, the competition will come down to shipping economics.
The minimum rate posted on the Kosci Junction project is $0.42/Dth/day. This rate is in line with current negotiated rates on KMI’s Midcontinent Express, which have a weighted average of ~$0.44/Dth/day. Midcontinent Express provides transport between similar markets as the KMI and Boardwalk projects, so EDA views the negotiated rates on this pipeline as a good proxy for the transportation path.
We suspect the Boardwalk project can support a lower rate because the construction costs for Kosci Junction should be lower than KMI’s. EDA estimates the MSX project will span about double the pipeline distance as the Kosci Junction. – Zach Krause Tickers: ET, KMI.
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