Ian Bezek • 335 Comments
Andrew Walker, CFA • 186 Comments
Wed, Jul. 13, 8:58 AM
- Valero Energy (NYSE:VLO) agrees to acquire the remaining 50% membership interest in Parkway Pipeline from Kinder Morgan (NYSE:KMI) for an undisclosed sum.
- The move gives VLO increased access to the eastern U.S. by connecting the pipeline to the Colonial Pipeline system that runs from Houston to New York Harbor.
- The 110K bbl/day Parkway Pipeline transports refined petroleum products from VLO's 305K bbl/day St. Charles refinery in Louisiana to Mississippi for supply into KMI's 51%-owned Plantation pipeline system; VLO says Parkway could be expanded to more than 200K bbl/day.
Mon, Jul. 11, 7:23 AM
- Southern Co. (NYSE:SO) agrees to acquire a 50% stake in the 7,600-mile Southern Natural Gas pipeline system from Kinder Morgan (NYSE:KMI) for $1.47B.
- KMI will continue to operate the system connects natural gas fields in Texas, Louisiana, Mississippi, Alabama and the Gulf of Mexico to markets in the southeast U.S.; SO is one of the pipeline's customers.
- SO says its new ownership stake in Southern Natural Gas will "position [it] for future growth opportunities and enhanced access to natural gas, which are expected to benefit customers and investors alike."
- KMI plans to use all proceeds from the sale to pay down debt, CEO Steve Kean says; KMI has canceled or postponed more than $4B in new pipeline projects this year and sold stakes in existing conduits to raise cash.
- The companies also say they plan to work together on additional projects expanding the pipeline system.
Nov. 30, 2015, 5:17 PM
- Kinder Morgan (NYSE:KMI) and Brookfield Infrastructure Partners (NYSE:BIP) agree to jointly acquire the 53% equity interest in Natural Gas Pipeline Company of America they do not already own from Myria Holdings for ~$242M.
- KMI will pay $136M and increase its ownership interest to 50% from 20%, while BIP will pay $106M and raise its stake to 50% from 27%.
- The deal values NGPL, one of the largest interstate pipeline systems in the U.S. with ~9,200 miles of pipeline, at ~$3.4B including debt.
- KMI says it will continue to operate NGPL, and expects the deal will be immediately accretive to its cash available to pay dividends.
Sep. 28, 2015, 11:39 AM
- Investors are balking at Energy Transfer Equity's (ETE -8.9%) just-announced merger with Williams Cos. (WMB -8.6%), as shares in the two oil and gas pipeline companies sell off sharply.
- WMB appears not to have needed to do much to sweeten its offer: "At first glance, it seems as if the bid matches ETE’s original offer made in June,” Raymond James analysts say - since both companies’ shares have fallen since the potential deal first became public, the headline deal number is now much lower than the $48B value announced in June.
- While plunging oil and natural gas prices have not hit pipeline operators as hard as other energy companies, analysts say the group is facing pressure to merge; prices also have fallen for fuels such as ethane and propane, which has hurt companies like WMB, which processes natural gas.
- Despite the immediate negative reaction, ETE claims the merger will enable it to capture $2.4B or more in commercial and cost-saving synergies over the next few years.
- Kinder Morgan (KMI -3.8%) and Spectra Energy (SE -3.4%) were among the other companies reportedly interested in acquiring WMB.
- Also: WPZ -7.7%, ETP -6.1%.
Aug. 17, 2015, 8:11 AM
- Spectra Energy (NYSE:SE) is bidding for the whole of Williams Cos. (NYSE:WMB), despite its market cap being about half of the latter, Reuters reports.
- Kinder Morgan (NYSE:KMI) is also interested in the company, but would face potential antitrust issues if it proceeded with a bid.
- Williams put itself up for sale in June after rejecting a $53.1B all-stock takeover bid (including debt) from Energy Transfer Equity (NYSE:ETE).
- WMB +1.5% premarket
Aug. 5, 2015, 2:45 PM
- Energy Transfer Equity (ETE -2.9%) has progressed to the second round of bidding for Williams Cos. (WMB -1.7%), a key milestone in its efforts to clinch a friendly takeover, Reuters reports.
- WMB decided to put itself on the auction block after it rejected an acquisition proposal from ETE in June worth ~$53B at the time including the assumption of debt, aimed at disrupting WMB's plans to acquire its pipeline subsidiary Williams Partners (WPZ -3.6%).
- WMB reportedly has attracted other bidders, although it is not yet clear which other companies made it through to the second round; Kinder Morgan (KMI -3.5%) and Spectra Energy (SE +0.4%) reportedly have expressed interest in WMB, but KMI could face significant antitrust hurdles because of its size.
Jul. 15, 2015, 4:58 PM
- Kinder Morgan (NYSE:KMI) agrees to acquire Royal Dutch Shell's (RDS.A, RDS.B) 49% interest in their proposed Elba Liquefaction joint venture near Savannah, Ga.; KMI already owns 51% of the project.
- KMI says it plans to invest an additional $630M in the project as a result of the deal, bringing its total investment to $2.1B; construction is expected to begin in Q4, with initial production to begin in late 2017.
- Shell still has a 20-year contract subscription to the terminal’s 2.5M metric tons of annual export capacity.
- Earlier: Kinder Morgan misses by $0.04, misses on revenue
- Earlier: Kinder Morgan declares $0.49 dividend
May 13, 2015, 7:45 PM
- Williams Cos. (NYSE:WMB) move to acquire Williams Partners (NYSE:WPZ), the MLP that holds its natural gas infrastructure assets, echoes last year's Kinder Morgan consolidation - and could bring similar headaches for some of its investors.
- The success of the KMI deal in raising valuations likely is a major reason WMB followed suit, says a portfolio manager: "That deal validated the thesis that a larger more liquid company would trade better than the limited partners plus a general partner."
- The deal will provide powerful tax benefits for the company: By buying its partnership’s assets, WMB says it can reset the clock on depreciation of assets, translating into $2B in tax savings over 15 years.
- But for individual investors who have held the partnership units over the long term, the tax consequences and a lower yield on the resulting investment may be bitter pills to swallow, explains MarketWatch's Philip Van Doorn.
- Analysts - and most investors, based on today's respective 6.2% and 22.7% respective gains for WMB and WPZ - applaud the move: “If you need to be more competitive, you need to be focused on lowering cost of capital,” says Raymond James energy analyst Darren Horowitz.
- WMB "will be able to compete a lot better on future projects because their cost of capital will be lower. This extends their growth outlook," says portfolio manager Jay Rhame.
Jan. 21, 2015, 4:28 PM
- Kinder Morgan (NYSE:KMI) agrees to acquire Hiland Partners from Harold Hamm in a $3B deal, including debt.
- Hiland's assets, which are mostly fee based, consist of crude oil gathering and transportation pipelines and gas gathering and processing systems, primarily serving production from the Bakken formation in North Dakota and Montana.
- KMI says the acquisition creates a premier midstream platform in the Bakken with a significant amount of acreage dedicated under long-term gathering agreements.
- Hiland's customers include Continental Resources, Oasis Petroleum, XTO Energy, Whiting Petroleum and Hess. among others.
- KMI expects the acquisition to be modestly accretive to cash available to pay dividends in 2015 and 2016 and $0.06-$0.07 accretive beginning in 2017.
- Also: Kinder Morgan misses by $0.26, misses on revenue
Nov. 20, 2014, 2:09 PM
- Kinder Morgan (KMI -0.9%) confirms that shareholders and unitholders at KMI, Kinder Morgan Partners (NYSE:KMP), Kinder Morgan Management (NYSE:KMR) and El Paso Pipeline (NYSE:EPB) approved all proposals related to bringing all four pipeline companies under one roof.
- KMI also projects a 16% dividend increase to $2/share for 2015, and expects to grow the dividend by ~10%/year during 2015-20 while producing excess coverage of more than $2B.
Sep. 22, 2014, 4:56 PM
- Veresen (OTC:FCGYF), which plans to build a terminal to ship liquefied natural gas to Asia from Oregon, agrees to buy Global Infrastructure Partners’ 50% stake in the Ruby pipeline for $1.43B.
- The 680-mile pipeline supplies gas from Wyoming to the Malin hub in Oregon, which connects to a pipeline that would feed Veresen’s proposed Jordan Cove LNG terminal on the state’s coast.
- The proposed LNG facility won approval from the U.S. Energy Department in March to export the fuel; Kinder Morgan (KMI, KMP) owns the other half of the Ruby pipeline and will continue to operate it.
Aug. 10, 2014, 9:37 PM
- Consolidating its oil-and-gas pipeline empire into a single company, Kinder Morgan (NYSE:KMI) will purchase Kinder Morgan Energy Partners (NYSE:KMP), Kinder Morgan Management (NYSE:KMR), and El Paso Pipeline Partners (NYSE:EPB).
- The MLP structure is limiting, says Richard Kinder. Combining the four companies into one unit "will allow us to further expand the reach of the kind of projects we can do."
- KMP unitholders will receive 2.1931 KMI shares and $10.77 in cash for each KMP unit, or $89.98, a 12% premium to Friday's close (based on KMI's Friday close).
- KMR shareholders will receive 2.4849 KMI share for each share of KMR, or $89.75, a 16.5% premium to Friday's close (based on KMI's Friday close).
- EPB unitholders will receive .9451 KMI shares and $4.65 in cash for each EPB unit, or $38.79, a 15.4% premium to Friday's close (based on KMI's Friday close).
- In conjunction with the deal, KMI expects a $2 annual dividend in 2015, a 16% boost to 2014's anticipated payout. The dividend is expected to grow about 10% per year through 2020.
- A conference call is set for Monday morning at 8:30 ET.
Apr. 28, 2014, 4:34 PM
- El Paso Pipeline Partners (EPB) agrees to acquire natural gas assets from Kinder Morgan (KMI) for ~$2B, including ~$1B of debt.
- Ultimately, EPB is acquiring a 50% interest in Ruby Pipeline, 50% interest in Gulf LNG and 47.5% interest in Young Gas Storage.
- EPB, which is purchasing the assets at ~9x 2013 EBITDA, says the deal will be immediately accretive to its earnings; EPB plans to fund most of the purchase via equity or debt issuances and/or borrowings under its revolving credit facility.
- EPB -1.9%, KMI +0.2% AH.
Dec. 23, 2013, 8:55 AM
- Kinder Morgan Partners (KMP. KMI) agrees to buy two oil tanker companies from affiliates of Blackstone Group and Cerberus Capital Management for $962M.
- American Petroleum Tankers has a fleet of five medium range Jones Act qualified product tankers, each with 330K barrels of cargo capacity.
- State Class Tankers has ordered four medium range Jones Act qualified product tankers, each with 330K barrels of cargo capacity, scheduled to be delivered in 2015 and 2016; KMP plans to invest ~$214M to complete construction of the vessels.
Jan. 30, 2013, 2:48 AM
Kinder Morgan (KMP) agrees to acquire Copano Energy (CPNO) for $3.2B in stock, or $5B including debt, with Kinder's offer of $40.91 a share representing a 23.5% premium to Copano's close yesterday. The deal will provide Kinder with natural gas assets in Texas, Oklahoma and Wyoming, adding 6,900 miles of pipelines to the company's 46,000 existing miles. (PR)| Jan. 30, 2013, 2:48 AM | 21 Comments
Aug. 20, 2012, 3:46 PM
Analysts say Kinder Morgan Partners' (KMP -0.5%) asset sale to receive FTC approval for its El Paso acquisition removes uncertainty and allows management to focus on other things. The price KMP got for its assets was "right down the fairway" of expectations, a Raymond James analyst says, adding the El Paso deal should bring in "very transparent, low-risk organic growth." KMI +1.9%.| Aug. 20, 2012, 3:46 PM