HOUSTON--(BUSINESS WIRE)--A subsidiary of Kinder Morgan, Inc. (NYSE: KMI) today announced it has
signed a joint venture (JV) letter of intent (LOI) with a subsidiary of
the TrailStone Group (TrailStone) to form a Mexican natural gas
marketing company. The JV between KMI and TrailStone subsidiaries will
combine North American gas supply and transportation to provide
competitively priced gas supply to industrial markets and power
generators in the Monterrey area and to other markets that can be
accessed via the national system of gas pipelines to be owned and
operated by CENAGAS. The JV will be managed and operated by TrailStone
and, subject to regulatory approvals, expects to be operational by the
first quarter of 2016. The companies involved in the JV are actively
pursuing and engaged in conversations with U.S. producers and end-users
in Monterrey and customers connected to the Mexican national grid. The
JV will provide these customers with a bundled natural gas supply
package that can include Henry Hub or Houston Ship Channel-based pricing
alternatives as well as swing and storage services.
“The marketing company will provide a convenient and efficient option
for end-users in the Monterrey area and other regions of Mexico to
benefit from low cost U.S. natural gas under the new open access
regulations that will become effective in Mexico in 2016,” said Larry
Bell, Kinder Morgan Natural Gas Midstream vice president of marketing
and transportation. “Pending signed agreements, the JV will market
capacity allocated to a TrailStone subsidiary on KMI’s Mier-Monterrey
expansion. Our Texas Intrastate system will provide transportation,
storage and gas supply services in the United States in support of the
JV, and benefit from increased utilization of its existing assets.”
“This JV is a significant building block in the expansion of
TrailStone’s physical commodity trading and logistics platform,” said
TrailStone Chief Executive Officer David Silbert. “We are excited to
further develop our strategic relationship with Kinder Morgan, which is
one of the most prominent and proven energy companies in North America.”
MIER-MONTERREY EXPANSION
Pending execution of the formal JV agreement and commitments to sell gas
through the Mexican marketing company, Kinder Morgan will commence its
Mier-Monterrey expansion which will consist of adding compression and/or
looping KMI’s existing Mier-Monterrey pipeline system from the
Mexico-United States border to Huinalá, Nuevo León, Mexico. The
expansion can be completed by the fourth quarter of 2017 and will
provide up to 200,000 Mcf/d of incremental capacity into the Monterrey
area. Kinder Morgan can further expand the capacity of the system by up
to an additional 500,000 Mcf/d, if sufficient demand exists. Customers
subscribing to capacity on the additional expansion will have access to
Texas pipeline hubs and out-of-region supply via firm transport on
Kinder Morgan’s existing Texas intrastate system. Kinder Morgan will
also expand its intrastate system to accommodate the desired capacity.
“We received interest in our binding open season from numerous
industrial and power generation consumers and plan to move forward with
the project as commitments are obtained,” said Kinder Morgan Natural Gas
Midstream President Duane Kokinda. “Potential customers will have
options to subscribe for transport capacity on the expansion and source
U.S. gas supply on their own, or contract with the JV to have natural
gas delivered to their facility in Mexico. The proposed project utilizes
existing rights-of-way and will expand upon our existing assets to
provide a low-risk and low-cost option for additional capacity to
transport natural gas produced in the United States to the growing
industrial and power-generating markets in and around Monterrey, Nuevo
Leon, and into Mexico’s national grid.”
Kinder Morgan, Inc. subsidiary Kinder Morgan Gas Natural de México S. de
R.L. de C.V. owns and operates the 85-mile Mier-Monterrey pipeline,
which has been in service since 2003 and stretches from the
International Border between the United States and Mexico in Starr
County, Texas, to Monterrey, Mexico. The pipeline connects to a
1,000-megawatt power plant complex and to the national grid.
Kinder Morgan, Inc. (NYSE: KMI) is the largest energy infrastructure
company in North America. It owns an interest in or operates
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 third largest energy company
in North America with an enterprise value of approximately $110 billion.
For more information please visit www.kindermorgan.com.
TrailStone Group is a global asset-backed commodities logistics and
trading company who is funded by Riverstone Holdings LLC. Since being
formed in April 2013 by David Silbert, TrailStone has developed a
logistics based commodities platform that is focused on oil and refined
products, natural gas and power, metals and mining and agriculture.
TrailStone has offices in London, Berlin, Sydney, Amsterdam, Austin and
New York. Please visit www.trailstonegroup.com.
This news release includes forward-looking statements. These
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 Kinder Morgan
believes that these forward-looking statements are based on reasonable
assumptions, it can give no assurance that such assumptions will
materialize. Important factors that could cause actual results to
differ materially from those in the forward-looking statements herein
include those enumerated in Kinder Morgan’s reports filed with the
Securities and Exchange Commission. Forward-looking statements
speak only as of the date they were made, and except to the extent
required by law, Kinder Morgan undertakes no obligation to update or
review any forward-looking statement because of new information, future
events or other factors. Because of these uncertainties, readers
should not place undue reliance on these forward-looking statements.
