Kinder Morgan Energy Partners

Kinder Morgan Energy Partners LP
Company type	Master limited partnership
Industry	Oil and gas
Founded	1997
Founder	Richard Kinder, William Morgan
Headquarters	Houston, Texas, United States
Area served	United States, Canada
Products	Petroleum products pipelines, natural gas pipelines, carbon dioxide pipelines, storage facilities, terminals, power generation plants, retail natural gas services
Parent	Kinder Morgan, Inc.

Kinder Morgan Energy Partners LP () (KMEP), a division of Kinder Morgan, Inc., functions as a master limited partnership (MLP) in the oil and gas sector. It possesses and operates pipelines for petroleum products, natural gas, and carbon dioxide, along with storage facilities, terminals, power generation plants, and retail natural gas services throughout the United States and Canada.

History

Based in One Allen Center in Houston, Texas, Kinder Morgan Energy Partners LP was established in 1997 by former Enron executive Richard Kinder and William Morgan. Their initial acquisition of Enron’s liquid pipeline assets for $40 million laid the groundwork for the company’s subsequent expansion. The organization has also employed several ex-Enron personnel, including whistleblower Jordan Mintz.

Kinder Morgan set itself apart within the MLP industry by achieving a 26% compound annual growth rate from its inception until 2009, surpassing the sector’s usual low double-digit performance.

On March 1, 2002, shares of Kinder Morgan Inc. declined to a 15-month low amid investor concerns regarding asset competition and partnership frameworks. Concurrently, Nova Chemicals Corp. divested its 20% interest in the Cochin pipeline for $64 million, subject to rights held by Kinder Morgan subsidiaries.

In May 2013, Kinder Morgan broadened its holdings by acquiring Copano Energy LLC (NASDAQ:CPNO), integrating these assets into its Natural Gas and Product Pipeline divisions. Subsequently, on August 10, 2014, the company revealed a $71 billion agreement to gain full ownership of Kinder Morgan Management and El Paso Pipeline Partners. This transaction, finalized on November 26, 2014, established the largest midstream energy enterprise in North America.

Regulatory oversight

The majority of Kinder Morgan’s pipelines are regulated by the U.S. Department of Transportation, which enforces rigorous safety standards to uphold pipeline integrity despite occasional incidents. Additionally, interstate natural gas pipelines are governed by the Federal Energy Regulatory Commission under the Natural Gas Act concerning rates and facility operations.

Facilities

Calnev Pipeline (Hazardous Liquids)
Central Florida Pipeline (Hazardous Liquids)
Cypress Pipeline System (Hazardous Liquids)
Plantation Pipe Line (Hazardous Liquids)
Portland Jet Line – an intrastate pipeline serving Portland International Airport in Oregon
Rockies Express-West Pipeline (Gas Transmission)

Accidents

The company has encountered several pipeline failures across various U.S. locations, affecting its operational reputation.

Suisun Marsh diesel spill

On April 28, 2004, a pipeline owned by Kinder Morgan Energy Partners ruptured near Suisun Bay marshes, discharging roughly 1,500 barrels of diesel fuel into the environment.

Walnut Creek gasoline fire

On November 9, 2004, a gasoline pipeline operated by Kinder Morgan Energy Partners (KMEP) near San Jose was accidentally struck by a backhoe during water pipeline installation by contractor Mountain Cascade Inc., working for the East Bay Municipal Utility District. The gasoline leak ignited—likely triggered by welders from subcontractor Matamoros Welding inside the water pipe—resulting in a massive fireball that claimed five lives (four workers and one supervisor), severely injured four others, and caused damage to nearby residences. Fire crews from Contra Costa County extinguished the fire after several hours. CalOSHA cited KMGP Services Company (a Kinder Morgan subsidiary) for failing to properly mark the pipeline location.

On July 7, 2005, California’s State Fire Marshal imposed a $500,000 fine on KMGP—the largest penalty ever levied in the state at that time—for safety violations.

Later, on September 22, 2007, KMGP was found guilty on six felony counts connected to the explosion and received a $15 million fine. The company settled legal claims with victims exceeding $90 million. This incident had a profound effect on Kinder Morgan’s financial results and underscored significant operational risks inherent in its pipeline transportation business model.

Burnaby crude oil spill

On July 24, 2007, an excavator working near the Westridge Marine Terminal in Burnaby, British Columbia, ruptured a pipeline operated by Kinder Morgan Energy Partners. This incident released close to 2,000 barrels of crude oil into a nearby residential area and Burrard Inlet, impacting 11 homes and necessitating the evacuation of around 250 people. Of the total spill, roughly 600 barrels entered the inlet waters, with cleanup expenditures surpassing $15 million. Recovery efforts successfully retrieved approximately 1,800 barrels from both shoreline and aquatic environments.

According to the Transportation Safety Board of Canada’s 2009 report, the damage occurred when a contractor’s excavator bucket penetrated the 610 mm diameter pipeline during excavation for storm sewer installation. On October 3, 2011, Kinder Morgan along with two contractors admitted guilt to a 21-count indictment. The resulting penalties included fines and payments nearing $250,000 allocated to habitat restoration and educational initiatives.

Burnaby Mountain oil spill

On May 6, 2009, a leak of crude oil was identified at Kinder Morgan’s Burnaby Mountain terminal by a contractor. The spill amounted to nearly 1,700 barrels before being swiftly contained by fire and hazardous materials response teams.

Abbotsford oil spill

An oil discharge occurred on January 24, 2012, at Kinder Morgan’s Sumas terminal located in Abbotsford. Early that morning, local residents detected a pronounced gas-like smell. The spill was confined within a controlled zone, effectively limiting environmental repercussions.

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