Kinder Morgan Energy Partners (KMP) has bought a newly constructed petroleum coke (petcoke) terminal in Port Arthur, Texas from TGS Development Group. The terminal cost the company approximately $67 million.
The facility handles petcoke from Total Petrochemicals USA Inc.’s recently expanded Port Arthur refinery. As per the agreement, Kinder Morgan will provide conveying, storage and ship loading services to Total for 25 years. The refinery is expected to produce more than 1 million tons of petcoke, a by-product of oil refining, annually.
The transaction, which was chalked out in partnership with TGS and Total, is expected to be immediately accretive to Kinder Morgan’s earnings and distributable cash flow.
Kinder Morgan handles the largest quantity of petcoke in North America. With the new terminal in its portfolio, the company looks to handle petcoke volumes in excess of 13 million tons by this year end.
Kinder Morgan –– the largest independent owner and operator of petroleum-product pipelines in the U.S.––operates through five business segments: Natural Gas Pipelines, Carbon Dioxide Pipelines, Product Pipelines, Terminals and Kinder Morgan Canada. With this acquisition it plans to increase revenue generation from the Terminals segment.
Kinder Morgan currently retains a Zacks #3 Rank, which translates into a short-term Hold recommendation. The partnership transports natural gas, gasoline, crude oil, CO2 and other products through its pipelines. Its terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke. In North America, Kinder Morgan is also a leading provider of CO2 for enhanced oil recovery projects.
Houston, Texas-based Kinder Morgan is a master limited partnership that competes with other players such as Enbridge Energy Partners LP (EEP) and Enterprise Products Partners, L.P. (EPD) that provide a wide range of midstream energy services.
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