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Kinder Morgan To Acquire Retail Energy Supplier
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Kinder Morgan, Inc. (KMI) today announced that it has agreed to acquire Indianapolis-based Kinetrex Energy from an affiliate of Parallel49 Equity.
Among other services, Kinetrex acts as a third party natural gas supplier in Indiana, providing natural gas supply to business customers including under the large gas transportation program at CenterPoint Energy Gas Indiana.
In addition to offering "pipeline" natural gas supply to end use customers, Kinetrex is a supplier of liquefied natural gas (LNG) in the Midwest and produces and supplies renewable natural gas (RNG) under long-term contracts to transportation service providers.
Kinder Morgan said that the $310 million acquisition includes two small-scale, domestic LNG production and fueling facilities, a 50% interest in a landfill RNG facility, and three additional RNG facilities with signed commercial arrangements
Kinetrex has a 50% interest in the largest RNG facility in Indiana as well as signed commercial agreements to begin construction on three additional landfill-based RNG facilities, Kinder Morgan said
KMI said that it expects the investment to be accretive to its shareholders as the three RNG facilities become operational over the next 18 months, with the purchase price and additional development capital expenditures representing less than six times expected 2023 EBITDA.
Once operational next year, total annual RNG production from the four sites is estimated to be over four billion cubic feet.
Kinder Morgan Energy Transition Ventures (ETV) President Jesse Arenivas stated, "We have been focused on RNG due to its potential to grow rapidly in the near term and deliver attractive returns, with landfills providing a low cost, predictable and long-term feedstock. The team at Kinetrex has developed an outstanding business model and platform for future growth in a fragmented market, and we are excited to welcome them to Kinder Morgan."
Kinder Morgan said that key members of Kinetrex’s management team will be joining KMI as part of the acquisition to pursue new projects that expand their RNG platform. After close, Kinetrex President and Chief Executive Officer Aaron Johnson will continue with KMI as president of Renewable Natural Gas and will report to Arenivas.
The transaction requires regulatory approval under Hart-Scott-Rodino and is expected to close in the third quarter of 2021.
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July 16, 2021
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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