Liquefied natural gas (LNG) exports to the global market and pipeline exports to Mexico are the main forces behind Kinder Morgan Inc.’s (KMI) $2.8 billion backlog of natural gas projects in North America, CEO Steven Kean said last Wednesday.

“Really, it’s exports,” Kean told the Wells Fargo Securities Midstream and Utility Symposium. “It’s LNG and Mexico that are driving this.”

He added, “As we look ahead on our shadow backlog, or other projects not in the backlog that we have some visibility on, it’s a very similar story.”

KMI expects 38 Bcf/d of incremental gas supply from 2018-2030 from the Marcellus and Utica Shales (14 Bcf/d), the Permian Basin (13 Bcf/d), the Haynesville Shale (8 Bcf/d), and the Eagle Ford Shale (3 Bcf/d), Kean said, adding, “this is a bit of an exaggeration, but you can come to the United States, you can build a liquefaction facility, and the suppliers, the producers, will be beating down your door.”

Of the $2.8 billion backlog, $900 million is allocated for projects that will add a combined 4.4 Bcf/d of Permian takeaway capacity by 2021, Kean said. These projects include the Permian Highway Pipeline, as well as expansions to KMI’s Texas intrastate pipelines, and to the El Paso Natural Gas Pipeline Company, LLC (EPNG) and Natural Gas Pipeline Company of America (NGPL) systems.

“So all this supply is there, and on our network, and then a lot of the demand is coming from LNG and exports to Mexico and industrial demand, which tends to be concentrated on the Gulf Coast,” Kean said.

He added that more than 70% of forecasted gas demand growth from 2018-2030 is in Texas and Louisiana, which Kean said is good news due to those states’ favorable regulatory and permitting environments, and to the fact that KMI has extensive infrastructure there already.

“We have $325 million worth of projects that we are executing on, that are debottlenecking…our Texas intra system, so that it can help serve that big tidal wave of supply that’s coming our way to the Gulf Coast,” Kean said.

KMI expects to add more than 600 MMcf/d of export capacity to Mexico by 2020, including 322 MMcf/d from the Sierrita Compressor Expansion Project.

KMI currently delivers around 3.1 Bcf/d to Mexico, and has capacity to deliver 5.4 Bcf/d through 12 direct connections and four indirect connections, according to a presentation last month at the US-Mexico Natural Gas Forum by Ernesto Ochoa, head of marketing and asset optimization for KMI subsidiary Tennessee Gas Pipeline (TGP).

The Sierrita pipeline, part of the EPGN system, currently has capacity to flow 200 MMcf/d. The 36-inch pipeline spans 60.9 miles, connecting EPNG’s South Mainline to the US-Mexico border near Sasabe, AZ.

The expansion has a proposed in-service date of April 2020.

At the border, Sierrita connects to Infraestructura Energética Nova’s (IEnova) 510 MMcf/d Sonora pipeline system.  The Sonora system’s 332-mile Sásabe-Guaymas segment currently serves gas demand in Sonora state.

However, the 205-mile Guaymas-El Oro segment has been out of commission since August 2017, amid a dispute with a faction of the local Yaqui indigenous community, preventing gas from flowing farther south to Sinaloa state. The timeline for the section’s return to service remains unclear.

Supply to northwestern Mexico also has been constrained by delays facing Grupo Carso’s 472 MMcf/d Samalayuca-Sásabe pipeline.

In addition to EPNG’s Sierrita expansion, TGP plans to add up to 130,000 MMcf/d of export capacity from its system into either Reynosa or Rio Bravo, Mexico, by November 2021, Ochoa said.

Due to the slow progress of efforts to add underground gas storage in Mexico, EPNG and TGP plan to offer storage capacity in Arizona and Texas, respectively, over the coming years to help Mexico shippers respond to system imbalances south of the border.