Back to top

Image: Bigstock

Kinder Morgan Divests 50% Stake in Utopia Pipeline Project

Read MoreHide Full Article

Kinder Morgan, Inc. (KMI - Free Report) announced that it has divested a 50% stake in the Utopia Pipeline Project to Riverstone Investment Group LLC. Per the agreement, Riverstone would provide an upfront cash payment, consisting of the reimbursement to Kinder Morgan for its 50% share prior capital expenditures and a payment in excess of capital expenditure to recognize the value created in developing the project. The total project cost is estimated at $500 million.

The Utopia Pipeline is a common carrier project that will include approximately 215 miles of new, 12-inch diameter pipeline constructed entirely within the state of Ohio from Harrison County to Fulton County. The pipeline will facilitate the transport of ethane and ethane-propane mixtures to petrochemical companies operating in Ontario, Canada, to be used as a feedstock in the production of plastics.

Kinder Morgan is the largest energy infrastructure company in North America. It owns an interest in or operates approximately 84,000 miles of pipelines and approximately 165 terminals. The company’s pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials like coal and petroleum coke. Kinder Morgan is the largest midstream and the third-largest energy company in North America.
 

But like all other oil and gas majors, Kinder Morgan remains vulnerable to volatile crude oil and natural gas prices, an imbalance in supply and demand for its products, and rising interest rates. Such factors can hurt the company’s volumes and margins.

Zacks Rank & Key Picks

Currently, Kinder Morgan carries a Zacks Rank #3 (Hold). Some better-ranked players from the broader energy sector are CVR Refining, LP , Boardwalk Pipeline Partners, LP and Tallgrass Energy GP, LP . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Kinder Morgan, Inc. (KMI) - free report >>

Published in