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Kinder Morgan, Inc. (NYSE: KMI) has completed a $135 million acquisition of North American Natural Resources, Inc. (NANR) and its related companies, adding seven landfill gas-to-power facilities in Michigan and Kentucky. KMI plans a $175 million investment to convert up to four facilities into renewable natural gas (RNG) operations, expected to generate around 2 billion cubic feet of RNG annually by early 2024. The acquisition enhances KMI's RNG capacity to 7.7 Bcf per year, positioning the company as a leader in the RNG sector.
Positive
Acquisition of NANR and its facilities for $135 million enhances KMI's renewable energy portfolio.
Upcoming conversion of up to four facilities to produce approximately 2 billion cubic feet of RNG per year.
Total expected RNG generation capacity will increase to approximately 7.7 Bcf annually.
Negative
None.
Increases RNG production and diversifies portfolio with landfill gas-to-power assets
HOUSTON--(BUSINESS WIRE)--
Kinder Morgan, Inc. (NYSE: KMI) today announced it has closed on the acquisition of North American Natural Resources, Inc. (NANR) and its sister companies, North American Biofuels, LLC and North American-Central, LLC. The $135 million acquisition in combined purchase price and related transaction costs includes seven landfill gas-to-power facilities in Michigan and Kentucky.
Shortly following close, KMI will make a final investment decision (FID) on the conversion of up to four of the seven gas-to-power facilities to renewable natural gas (RNG) facilities with a capital spend of approximately $175 million. Pending FID, these facilities are expected to be in service by early 2024. Once complete, the facilities are expected to generate approximately 2 billion cubic feet (Bcf) per year of RNG. This acquisition and the additional investments discussed above, combined with the recent Kinetrex Energy and Mas CanAm acquisitions, will enhance the company’s vertically integrated platform that delivers differentiated solutions across the RNG value chain. The combined RNG operations will provide KMI with annual RNG generation capacity of approximately 7.7 Bcf per year once all of the RNG facilities are in service. The remaining three NANR assets, projected to produce 4.8 megawatt-hours in 2023, will further diversify KMI’s renewable portfolio by adding electricity generation to its landfill gas-to-power operations.
“We are excited to continue KMI’s commitment to growing our RNG business through the acquisition of NANR’s facilities and expertise,” said Energy Transition Ventures President Anthony Ashley. “We believe this further positions us as a leader in the RNG marketplace and look forward to expanding our RNG footprint to benefit the customers, businesses and communities we serve.”
“We are proud of the business NANR’s employees have built over the past 43 years,” said NANR President Bob Evans. “With the evolution of energy markets, we are excited to join the KMI family as the world transitions to a cleaner energy future.”
KMI expects the investment to be accretive to its shareholders as the four converted RNG facilities become operational over the next 18 months, with the purchase price and additional development capital expenditures representing less than six times the expected 2024 EBITDA.
KMI’s August investor presentation as revised to include the NANR acquisition has been posted to the Investor Relations page of KMI’s website.
About Kinder Morgan, Inc. Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 83,000 miles of pipelines, 141 terminals, and 700 billion cubic feet of working natural gas storage capacity. Our pipelines transport natural gas, refined petroleum products, renewable fuels, crude oil, condensate, CO2 and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, renewable fuel feedstocks, chemicals, ethanol, metals and petroleum coke. Learn more about our renewables initiatives on the low carbon solutions page at www.kindermorgan.com.
Important Information Relating to Forward-Looking Statements
This news release includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. Generally the words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,” “estimates,” and similar expressions identify forward-looking statements, which are not historical in nature. Forward-looking statements in this news release include express or implied statements concerning the transaction; the prospects for RNG; the anticipated benefits of the transaction; and the anticipated timing and benefits of RNG conversion projects to KMI’s business and stockholders. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although KMI believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance as to when or if any such forward-looking statements will materialize or their ultimate impact on KMI's operations or financial condition. Important factors that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements include changes in the supply of and demand for renewable natural gas; the timing, cost, and success of RNG conversion projects; commodity prices, particularly the prices for Renewable Identification Numbers under the U.S. Environmental Protection Agency’s Renewable Fuel Standard Program; counterparty financial risk; the timing and success of business development efforts; and the other risks and uncertainties described in KMI’s reports filed with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year-ended December 31, 2021 (under the headings “Risk Factors” and “Information Regarding Forward-Looking Statements” and elsewhere) and its subsequent reports, which are available through the SEC’s EDGAR system at www.sec.gov and on KMI’s website at ir.kindermorgan.com. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, KMI undertakes no obligation to update any forward-looking statement because of new information, future events or other factors. Because of these risks and uncertainties, readers should not place undue reliance on these forward-looking statements.
