Kinder Morgan Closes on the $1.815 Billion Acquisition of NextEra Energy Partners’ South Texas Assets

Published a year ago via Business Wire

Pipeline systems complementary to KMI’s existing South Texas footprint

Kinder Morgan, Inc. (NYSE: KMI) today closed on its previously announced $1.815 billion acquisition of NextEra Energy Partners’ South Texas assets (STX Midstream), which includes a set of integrated, large diameter high pressure natural gas pipeline systems that connect the Eagle Ford basin to key growing Mexico and Gulf Coast demand markets. The acquisition includes a 90% interest in the NET Mexico pipeline (MGI Enterprises, a PEMEX affiliate, owns the other 10%), Eagle Ford Midstream and a 50% interest in Dos Caminos LLC (Howard Energy Partners (HEP) owns the remaining 50% and will continue to operate the pipeline). Dos Caminos recently placed in service a 62-mile pipeline connecting HEP’s existing midstream pipeline and facilities in Webb County, Texas to KMI’s new Eagle Ford pipeline, which was placed in service on November 1, 2023. This portfolio of assets is highly contracted, with an average contract length of over 8 years. Approximately 75% of the business is supported by take-or-pay contracts.

“We are pleased to add these assets to our natural gas portfolio to serve growing LNG, industrial, Mexico export and power generation demand markets on the U.S. Gulf Coast,” said KMI President of Natural Gas Pipelines Sital Mody. “These assets integrate well with our existing South Texas footprint and extend our direct connectivity in the lean area of the Eagle Ford Basin, allowing us to offer LNG customers greater access to desirable low-nitrogen natural gas supply.”

KMI expects the acquisition to be accretive to its preliminary 2024 budget guidance with the purchase price equal to 8.6 times the 2024 EBITDA and a long-term investment-to-EBITDA multiple of approximately 7.0-7.5 times, inclusive of commercial synergies. Initially, we plan to fund the transaction with cash on hand and short-term borrowings, increasing our expected Net Debt-to-Adjusted EBITDA ratio for 2024 by approximately 0.1 times after including a full year Adjusted EBITDA contribution from the asset. Expected acquisition EBITDA multiples, Net Debt and Adjusted EBITDA are non-GAAP measures. For definitions of these measures and reconciliations to comparable GAAP measures, where applicable, please refer to KMI’s Investor Presentation for 4Q 2023, which is available at the Investor Relations Page of www.kindermorgan.com under “Events and Presentations.”

About Kinder Morgan, Inc.

Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 82,000 miles of pipelines, 140 terminals, 700 billion cubic feet of working natural gas storage capacity and have renewable natural gas generation capacity of approximately 5.4 Bcf per year with an additional 1.5 Bcf in development. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2, renewable fuels and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, jet fuel, chemicals, metals, petroleum coke and ethanol and other renewable fuels and feedstocks. Learn more about our work advancing energy solutions on the lower carbon initiatives page at www.kindermorgan.com.

Important Information Relating to Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. Generally, the words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,” “estimates,” and similar expressions identify forward-looking statements, which are not historical in nature. Forward-looking statements in this news release include express or implied statements concerning the business of STX Midstream and the anticipated benefits to KMI’s business and stockholders of the acquisition transaction. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although KMI believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance as to when or if any such forward-looking statements will materialize or their ultimate impact on KMI’s operations or financial condition. Important factors that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements include the timing and extent of growth in demand for the products we transport and handle; counterparty financial risk; and the risks and uncertainties described in KMI’s reports filed with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year-ended December 31, 2022 (under the headings “Risk Factors” and “Information Regarding Forward-Looking Statements” and elsewhere) and its subsequent reports, which are available through the SEC’s EDGAR system at www.sec.gov and on KMI’s website at ir.kindermorgan.com. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, KMI undertakes no obligation to update any forward-looking statement because of new information, future events or other factors. Because of these risks and uncertainties, readers should not place undue reliance on these forward-looking statements.

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