Kinder Morgan, Inc. (KMI, formerly Kinder Morgan Holdco) is the top layer of a large oil and gas cake. It 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 75,000 miles of pipelines and 180 terminals.
KMI has operations in the US and Canada. The US accounted for 95% of the company's revenues in 2012.
The company is a leader in petroleum product transportation, terminal operations, and coke and CO2 transportation.
It holds 62,000 miles of natural gas transmission pipelines and gathering lines, plus natural gas storage, treating and processing facilities, and through KMP 8,600 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 113 liquids and bulk terminal facilities and 35 rail transloading and materials handling facilities in the US and Canada. Kinder Morgan Canada transports crude oil and refined petroleum products through across 2,500 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 2012 KMI's revenues jumped by 21% due to higher earnings from all reportable business segments, driven mainly by increases attributable to the Natural Gas Pipelines segment primarily due to its acquisition of El Paso Corp. There was increases in natural gas transportation, CO2, and terminals segment volumes and sales.
The company reported a net income of $315 million in 2012, 47% down on the previous year due to increased operating, general, and administrative expenses associated with the El Paso Corp. acquisition.
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 the company announced plans to consolidate 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.
Mergers and Acquisitions
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.
That year KMI also announced plans form a new business within its Terminals business segment to pursue non-operating investments in coal and other mineral reserve properties and infrastructure assets.
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.