Kinder Morgan, Inc. (KMI, formerly Kinder Morgan Holdco) is the top layer of a large oil and gas cake. The company owns Kinder Morgan Management, which manages the general partner of Kinder Morgan Energy Partners (KMP). KMP operates pipeline that transport natural gas, crude oil, gasoline, and other products, along with terminals used to store chemicals and petroleum products and other items (including coal and steel). It produces carbon dioxide (CO2), which is used in oil field production. KMI owns stakes in or operates 80,000 miles of pipelines and 180 terminals. It also holds 51% of El Paso Pipeline Partners.
KMI has operations in the US and Canada. The US accounted for 97% of the company's revenues in 2013.
The company is a leader in petroleum product transportation, terminal operations, and coke and CO2 transportation.
It holds 68,000 miles of natural gas transmission pipelines and gathering lines, plus natural gas storage, treating and processing facilities, and through KMP 9,000 miles of refined petroleum products pipelines and 1,500 miles of CO2 pipelines. It also owns or operates seven oil fields in West Texas and a 450-mile crude oil pipeline system in West Texas.
Its terminal business owns or operates 122 liquids and bulk terminal facilities and 10 rail transloading and materials handling facilities in the US and Canada. Kinder Morgan Canada transports crude oil and refined petroleum products through across 800 miles of pipelines (and five associated product terminal facilities) from Alberta, Canada to marketing terminals and refineries in British Columbia, Washington State, the Rockies, and the Central US.
KMI also owns 51% of El Paso Pipeline Partners, and about 20% of natural gas pipeline NGPL PipeCo.
In 2013 the company experienced record breaking revenue growth of 41% due to higher earnings from major business segments, driven mainly by an increase in Natural Gas Pipelines sales (due to the recently acquired El Paso operations) and an increase in the CO2-KMP and the Terminals-KMP business segments.
KMI's net income jumped up by 279% due to higher revenues and income from continuing operations.
In 2013 the company’s operating cash inflow increased to $4.06 billion (from $2.80 billion in 2012) due to higher net income and change in the operating assets and liabilities.
KMI's strategy is focused on building and maintaining energy transportation and storage assets, which are central components to a growing natural gas and petroleum products infrastructure across North America.
In 2014 El Paso Pipeline Partners, agreed to buy KMI’s 50% stake in Ruby Pipeline, 50% interest in Gulf LNG and 47.5% stake in Young Gas Storage for $2 billion. As a result KMI will reduce its debt while continuing to participate in the cash flows from these assets through its general and limited partner interests in El Paso Pipeline Partners.
That year KMI also announced plans to invest $671 million to grow its carbon dioxide infrastructure in southwestern Colorado and New Mexico.
Mergers and Acquisitions
In 2014 consolidated its oil-and-gas pipeline holdings into a single company, with KMI acquiring KMP, Kinder Morgan Management and El Paso Pipeline Partners in a $44 billion deal.
In a major move to become the largest natural gas pipeline and midstream enterprise in North America (with about 75,000 miles of natural gas pipeline and 180 terminals) in 2012 KMI acquired El Paso Corp. (which had 44,000 miles of natural gas pipeline) for about $38 billion. To comply with FTC requirements in completing the deal, in 2012 KMI sold KMP's FTC Natural Gas Pipelines disposal group to Tallgrass Energy Partners, L.P. for $1.8 billion.
Apart from greatly expanding the company's size and scope, the El Paso Corp. deal is expected to save KMI more than $400 million of cost savings per year through the integration of the two organizations and the elimination of redundancies.
In mid-2013 it paid $5 billion for Copano Energy, a midstream company with interests in almost 7,000 miles of natural gas pipeline in Oklahoma, Texas, and Wyoming. The acquisition expands Kinder Morgan's operations in the Eagle Ford shale and Barnett shale in Texas, and the Mississippi Lime and Woodford shales in Oklahoma.
Growing its operations in other shale areas, in 2013 Kinder Morgan Energy Partners, L.P. and MarkWest Utica EMG, L.L.C. agreed to form a joint venture to build a cryogenic processing complex and the infrastructure to support producers in the Utica and Marcellus shales in Ohio, Pennsylvania and West Virginia.
Chairman and CEO Richard D. Kinder owns 23% of Kinder Morgan.
Kinder led a group of investors in taking KMI private in 2007. It then adopted the Knight name. To take advantage of its better-known brand, it reverted to the Kinder Morgan name in 2009. Kinder Morgan went public in 2011 and changed its name to Kinder Morgan, Inc. IPO proceeds went to the aforementioned selling shareholders.