HOUSTON--(BUSINESS WIRE)--Kinder Morgan, Inc. (NYSE: KMI) announced today that Riverstone
Investment Group LLC (Riverstone) will become a 50 percent partner in
the Utopia Pipeline Project. To acquire its ownership interest,
Riverstone agreed to an upfront cash payment provided at closing,
consisting of reimbursement to KMI for its 50 percent share of prior
capital expenditures related to the project and a payment in excess of
capital expenditures to recognize the value created by KMI in developing
the project to this stage.
In addition to the acquisition of the existing assets, Riverstone has
agreed to fund its share of future capital expenditures necessary to
complete construction and commissioning of the pipeline project. The
total project cost is estimated to be approximately $500 million
(excluding capitalized interest).
“The Utopia pipeline will connect growing ethane supply sources in Ohio
to the expanding petrochemical market in Sarnia,” said Don Lindley,
president of KMI’s Natural Gas Liquids (NGL), Products Pipelines. “We
are excited to welcome Riverstone as a partner in the Utopia project.”
The project is supported by a long-term contract with Nova Chemicals
Corporation.
“This is another step towards achieving our stated goals of
strengthening our balance sheet and positioning the company for
long-term value creation,” said Steve Kean, Kinder Morgan president and
chief executive officer. “This agreement also demonstrates our ability
to originate projects with attractive returns that partners are willing
to pay to participate and invest in.”
Baran Tekkora, Partner at Riverstone, said, “The principals of Kinder
Morgan and Riverstone have a long history of working together and we are
happy to be partners again. Kinder Morgan has a proven management team
with strong project development, commercial, and operational expertise.
We look forward to Utopia being a successful project and believe it will
lead to other strategic partnerships on future projects.”
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 connect with an existing Kinder Morgan pipeline and
associated facilities in order to transport ethane and ethane-propane
mixtures to petrochemical companies operating in Ontario, Canada, for
use as a feedstock in the production of plastics that will ultimately be
made into automotive parts, bottles, containers, home furnishings and
other common plastic products. These products will be distributed to
manufacturers, businesses and homes throughout the Great Lakes region.
Credit Suisse acted as the exclusive financial advisor to KMI during
this transaction.
Kinder Morgan, Inc. (NYSE: KMI) is the largest energy infrastructure
company in North America. It owns an interest in or operates
approximately 84,000 miles of pipelines and approximately 180 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. For
more information please visit www.kindermorgan.com.
Riverstone is a global energy and power-focused private equity firm
founded in 2000 by David M. Leuschen and Pierre F. Lapeyre with over $34
billion of capital raised. Riverstone conducts buyouts and makes growth
capital investments in the midstream, exploration and production,
oilfield services, power and renewable sectors of the energy industry.
With offices in New York, London, Houston and Mexico City, the firm has
committed over $31 billion to more than 120 investments in North
America, Latin America, Europe, Africa and Asia. More information about
Riverstone can be accessed at www.riverstonellc.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 generally not historical in nature. 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 any such forward-looking statements will
materialize. Important factors that could cause actual results to
differ materially from those expressed in or implied from these
forward-looking statements include the risks and uncertainties described
in Kinder Morgan’s reports filed with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year-ended
December 31, 2015 (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 our 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, Kinder Morgan 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.
