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Kinder Morgan

From Alfawiki
Kinder Morgan, Inc.
Company typePublic
IndustryEnergy infrastructure
Founded1997
FounderRichard D. Kinder, William V. Morgan
Headquarters
Houston
,
United States
Area served
North America
Key people
Richard Kinder (Executive Chairman), Kimberly A. Dang (CEO), Tom Martin (President)
ProductsPipelines and terminals for oil and gas, natural gas, liquefied natural gas, ethanol, biodiesel, hydrogen, refined petroleum products, crude oil, carbon dioxide
Revenue$15.1 billion (2024)
$4.38 billion (2024)
$2.61 billion (2024)
Total assets$71.4 billion (2024)
Total equity$30.5 billion (2024)
Number of employees
10,933 (2024)
Websitewww.kindermorgan.com

Kinder Morgan, Inc. stands as a premier energy infrastructure enterprise in North America, primarily engaged in owning and managing pipelines and terminals for oil and gas. Established in 1997 by founders Richard D. Kinder and William V. Morgan, the company is based in Houston, Texas.

The firm oversees roughly 83,000 miles of pipeline infrastructure along with 143 terminals, facilitating the transportation of natural gas, liquefied natural gas, ethanol, biodiesel, hydrogen, refined petroleum products, crude oil, and carbon dioxide. Additionally, its terminals provide storage and handling services for commodities such as gasoline, jet fuel, coal, petroleum coke, and steel.

Possessing about 72,000 miles of natural gas pipelines, Kinder Morgan ranks as the largest operator of natural gas pipelines within the United States, responsible for moving approximately 40% of the nation’s natural gas consumption. Although it once held major Canadian assets through the Trans Mountain pipeline, this particular infrastructure has since transitioned to public ownership. The company’s carbon dioxide segment delivers CO2 utilized in enhanced oil recovery and is increasingly involved in carbon capture and storage initiatives.

By 2024, Kinder Morgan reported revenues totaling $15.1 billion with operating profits of $4.38 billion and a net income of $2.61 billion. The organization employs nearly 10,933 individuals and boasts a robust financial footing with assets valued at $71.4 billion and shareholders’ equity amounting to $30.5 billion. Leadership includes Executive Chairman Richard Kinder, Chief Executive Officer Kimberly A. Dang, and President Tom Martin.

The company’s operational strategy emphasizes generating consistent cash flow through fee-based contracts across its vast pipeline system and terminal facilities, thereby securing a competitive edge in the transportation and storage sectors of the oil and gas industry.

Founding Years

Kinder Morgan Energy Partners (KMP) was created in 1997 following an investor acquisition of the general partnership interest in Enron Liquids Pipeline, L.P., which was later renamed Kinder Morgan Energy Partners, L.P. Co-founder Rich Kinder—previously Enron’s president—departed after being overlooked for the CEO position and acquired the company’s stake in ELP for $40 million. That same year, KMP expanded by acquiring Santa Fe Pacific Pipeline Partners.

In 1999, Kinder Morgan executed a reverse merger with KN Energy, a utility and pipeline firm that owned Natural Gas Pipeline Company of America (NGPL), serving the Chicago region. This merger made KN Energy Kinder Morgan’s second publicly traded entity under the name Kinder Morgan, Inc. (KMI).

By 2001, Kinder Morgan established Kinder Morgan Management, LLC (KMR) to enable institutional investors to hold equity positions in KMP.

Leveraged Buyout

On August 28, 2006, Kinder Morgan revealed a management-led leveraged buyout valued near $22 billion. Key stakeholders included Fayez Sarofim, Goldman Sachs Capital Partners, and Highstar Capital (then part of AIG). In 2007, Kinder Morgan divested KN Energy to General Electric Co. and Alinda Capital Partners; this entity was subsequently rebranded as SourceGas.

Kinder Morgan returned to public trading on the New York Stock Exchange on February 11, 2011, marking the largest private equity-backed initial public offering in U.S. history at that time.

Subsequent developments

In October 2011, Kinder Morgan Inc. reached an agreement to purchase El Paso Corp. for $21.1 billion, resulting in the formation of the largest pipeline operator in the United States with 67,000 miles of natural gas pipelines, surpassing Enterprise Products Partners LP. The acquisition was funded through a combination of Kinder Morgan stock, warrants, and $11.5 billion in cash loans obtained from Barclays.

On August 10, 2014, Kinder Morgan revealed a $71 billion transaction aimed at acquiring full control over its partially owned affiliates: Kinder Morgan Energy Partners, Kinder Morgan Management, and El Paso Pipeline Partners. This merger was finalized on November 26, 2014, uniting all entities under Kinder Morgan, Inc. (NYSE: KMI), thereby simplifying its organizational framework and strengthening its market position.

American Petroleum Tankers

On December 23, 2013, Kinder Morgan Energy Partners declared the purchase of American Petroleum Tankers (APT) along with its affiliate SCT from private equity investors Blackstone Group and Cerberus Capital Management. APT manages a fleet of five US-flagged MR oil tankers (each with a capacity of 50,000 tons or 330,000 barrels) and has four additional vessels under construction at National Steel and Shipbuilding Company (NASSCO) in California. This acquisition marked Kinder Morgan’s entry into maritime transportation, enhancing its existing pipeline network.

This move aligns with Kinder Morgan’s objective to support US natural resource exports to international markets. By mid-2014, the company had secured multiple LNG export contracts, bolstering its competitive edge in energy logistics and expanding its portfolio of products and services.

Winter Storm Uri

During the 2021 Texas power crisis, Kinder Morgan reported an approximately $1 billion one-time net gain by voluntarily curtailing its power consumption (resulting in $116 million in savings) and selling natural gas to electric utilities at premium prices (generating $880 million). An analyst from Mizuho Securities identified Kinder Morgan as an unforeseen beneficiary of the storm. Most incremental gas sales were directed to utilities whose regular suppliers had ceased operations, underscoring Kinder Morgan’s capability to secure long-term contracts that ensure consistent gas supply.

Companies

  • Plantation Pipeline (established 2000) (in partnership with ExxonMobil)
  • Calnev Pipeline (2001) (liquids transportation)
  • Central Florida Pipeline (2001) (liquids transportation)
  • Midcontinent Express Pipeline (50% stake by 2007) (gas transmission)
  • Fayetteville Express Pipeline LLC (joint venture with Energy Transfer Partners, 2008) (gas transmission)
  • Kinder Morgan Altamont LLC (gas gathering operations)
  • Kinder Morgan Cochin LLC (liquids transportation)
  • Kinder Morgan Company, Houston, Texas
  • Kinder Morgan, Inc., Houston, Texas
  • Natural Gas Pipeline Company of America (co-owned with Brookfield Infrastructure Partners L.P.) (gas transmission)
  • Kinder Morgan Terminals, Houston, Texas (liquids and bulk storage)
  • Kinder Morgan Louisiana Pipeline LLC (KMLP), based in Crowley, Louisiana (gas transmission)
  • Kinder Morgan North Texas Pipeline (gas transmission)
  • Kinder Morgan Wink Pipeline (liquids transportation)

Following the acquisition of El Paso Corporation in 2012, the following subsidiaries were incorporated:

Pipelines

Kinder Morgan manages or possesses control over a network of pipelines primarily dedicated to transporting natural gas, crude oil, and various petroleum products.

Prior to the Canadian government's acquisition, Kinder Morgan operated key pipelines in Canada, including the Trans Mountain oil pipeline connecting Alberta to Vancouver, British Columbia, as well as the Cochin pipeline that runs from Western Canada to the American Midwest.

Trans Mountain Pipeline

In 2013, Kinder Morgan sought approval from the Canadian National Energy Board to construct a second pipeline parallel to the existing Trans Mountain line. This expansion was designed to increase throughput capacity from 300,000 barrels per day to 850,000 barrels per day. Valued at $6.8 billion, the project intended to enhance export capabilities for Alberta’s bituminous sands oil to markets in both the United States and Asia.

Although the energy industry largely endorsed this initiative, it encountered persistent resistance from First Nations communities and environmental advocates, resulting in ongoing protests beginning in 2014. Confronted with these political and environmental obstacles, the Canadian government acquired Trans Mountain from Kinder Morgan for C$4.5 billion. The pipeline was then transitioned into a government-operated infrastructure project to ensure its completion, with revised cost estimates now reaching $12.6 billion.

Northeast Energy Direct Pipeline

This proposed pipeline was planned as a 30-inch (762 mm) diameter high-pressure gas transmission system stretching from Wright, New York, to Dracut, Massachusetts. Its goal was to alleviate high natural gas and electricity prices in New England caused by constrained transportation capacity. Nevertheless, in 2016 Kinder Morgan discontinued the 412-mile (663 km), $3.3 billion venture due to economic difficulties and insufficient commitments from distribution partners.

Palmetto Pipeline

The Palmetto Pipeline project aimed to link the Gulf Coast with Southeastern markets via a 201-mile (323 km) route across eastern and coastal Georgia. However, opposition from local communities and environmental organizations, alongside a temporary ban on eminent domain imposed by the Georgia General Assembly, resulted in the project's suspension. Following an independent review commissioned by the company, Kinder Morgan filed an appeal regarding the halt.

Connecticut Expansion Project

Kinder Morgan proposed constructing a 13-mile loop of 36-inch (914 mm) high-pressure natural gas storage pipeline with an additional 4-mile spur crossing protected lands in Sandisfield, Massachusetts. Utilizing eminent domain authority under the U.S. Natural Gas Act, Kinder Morgan encountered legal resistance from Massachusetts officials who cited Article 97 protections safeguarding conservation lands against pipeline development.

Permian Highway Pipeline

Construction commenced in late 2019 on the Permian Highway Pipeline—a 430-mile system developed jointly by Kinder Morgan, EagleClaw Midstream, and Altus Midstream Processing. Designed to transport up to 2.1 billion cubic feet of natural gas daily from the Waha Hub in Pecos County, Texas, to the Gulf Coast, this initiative is projected to create approximately 2,500 construction jobs and 18 permanent roles. Additionally, it is expected to generate $42 million annually in tax revenues for state and local governments, with operations slated for commencement in 2021.

Safety violations

Kinder Morgan has been subject to numerous safety violations issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA). In 2009, the agency cited the company for inadequate pipeline setbacks from sensitive locations such as schools and hospitals. Two years later, PHMSA found deficiencies in several areas including the updating of pipeline maps, testing of safety mechanisms, upkeep of firefighting gear, pipeline inspections, and corrosion monitoring. Additionally, the U.S. Department of Transportation proposed a $425,000 penalty in 2011 due to the absence of documented startup and shutdown protocols and insufficient detection of abnormal operating conditions.

An article published by the Wall Street Journal in 2013 raised concerns that Kinder Morgan had postponed maintenance expenditures to enhance returns for investors. According to PHMSA data, 45% of major pipeline leaks at Kinder Morgan are linked to defective infrastructure; issues such as pipe failures, fractured welds, and equipment malfunctions account for 28%, while corrosion is responsible for 17%.

Accidents

From 2003 through 2016, Kinder Morgan reported at least 48 major incidents in Texas involving fatalities, fires, explosions, or hazardous spills. Across the United States, its pipelines were connected to more than 400 incidents spanning 24 states, resulting in over 110 federal enforcement actions. These natural gas transmission pipeline accidents led to an estimated $224 million in property damage.

In July 2007, a pipeline rupture in Burnaby caused by Kinder Morgan released over 320,000 liters of oil, prompting evacuations and cleanup expenses totaling $15 million. More recently, an August 2021 pipeline failure near Coolidge, Arizona resulted in two deaths and one serious injury.

External links

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