Friday, Kinder Morgan Inc. announced it would be cutting nearly 120 jobs. Based in Houston, the energy giant says the cuts are due in large part to the ongoing oil bust.
The cuts follow Kinder Morgan’s decision to reduce its shareholder dividend and project backlog. This effort was intended to lower costs and increase cash flow, but the cuts are still going forward, with 37 positions being eliminated in Houston alone. After the cutback, Kinder Morgan reports that it will still hold roughly 11,750 people in its employ.
Richard Wheatley, Kinder Morgan spokesman, stated through email that the decision to cut employees was in response to the company’s declining activity levels during the downturn. He also said that in some cases, employees dismissed by the company might be reassigned. Terminated employees will also be given severance packages.
The oil bust has also diminished the overall value of Kinder Morgan Inc. The energy company’s project backlog has decreased significantly since the middle of 2015 from $22 billion down to $14 billion.
In addition to this drop, Kinder Morgan’s stock has fallen from $42 a share just one year ago to less than $18 a share as of Friday.
In December, the company cut its dividend by 75 percent to make more cash available.
In more positive news, Kinder Morgan received federal approval on Thursday for its Elba Liquefaction Project. The Federal Energy Regulatory Commission handed down the authorization that will allow the $2 billion project to begin. With the authorization, Kinder Morgan will liquefy natural gas and export it from Elba Island near Savannah.
Canada’s main energy regulatory body suggested the approval of Kinder Morgan’s $5.4 billion Trans Mountain oil pipeline expansion this past May.
Article written by HEI contributor Briana Steptoe.