Kinder Morgan

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Kinder Morgan
Type Public
Traded as NYSEKMI
S&P 500 Component
Industry Oil and gas
Founded 1997
Founder(s) Richard Kinder
Headquarters One Allen Center
Houston, Texas, U.S.
Area served USA and Canada
Key people Richard Kinder
(Chairman and CEO)
Services Pipeline transport
Oil storage
Employees ~ 8,000 (2012)
Subsidiaries Kinder Morgan Energy Partners

Kinder Morgan, Inc. is an American energy company. It is, through a subsidiary, the general partner and owner of many of the interests in Kinder Morgan Energy Partners, a publicly traded pipeline and terminal limited partnership.

Kinder Morgan Energy Partners, L.P. is a leading pipeline transportation and energy storage company in North America. Kinder Morgan owns or operates approximately 82,000 miles of pipelines transporting primarily natural gas, crude oil, and petroleum products. Kinder Morgan owns about 180 terminals that store and handle products such as gasoline, coal, and petroleum coke. Kinder Morgan is the leading provider of carbon dioxide (CO2) for enhanced oil recovery projects in North America.[citation needed]

In Canada, Kinder Morgan operates the Trans Mountain oil pipeline which links Alberta with Vancouver, BC, as well as the Cochin natural gas pipeline between Western Canada and the US Mid West. In 2013, Kinder Morgan completed the filing of its application to the Canadian National Energy Board ("NEB") for building a second parallel pipeline to Trans Mountain, which would nearly triple the transportation capacity of Trans Mountain from 300,000 to 850,000 barrels per day, for an estimated investment of $5.4 billion. This expansion would enable the export of larger volumes of Alberta bituminous sands oil to the US and to Asian countries. Kinder Morgan has indicated that it already has the support of several large customers for this expansion, i.e.: BP Canada Energy Trading Co., Canadian Natural Resources, Canadian Oil Sands Ltd., Cenovus Energy Inc., Devon Canada Corp., Husky Energy Marketing Inc., Imperial Oil Ltd., Nexen Marketing Inc., Statoil Canada Ltd., Suncor Energy Marketing Inc., Suncor Energy Products Partnership, Tesoro Refining & Marketing Co. and Total E&P Canada Ltd. However, this project, like other new pipeline projects, will face various oppositions, especially those of the Indian First Nations who have title to the lands crossed by the pipelines as well as from environmentally concerned citizens (see below, "Challenges and Oppositions to Pipelines").[citation needed]

On December 23rd 2013, Kinder Morgan announced that, through its Kinder Morgan Energy partner subsidiary (ticker KMP on NYSE), it has agreed to acquire the US oil tanker operator American Petroleum Tankers (APT) and its affiliated company SCT (State Class Tankers) from the US private equity investment firms Blackstone Group and Cerberus Capital management. APT operates a fleet of five US flagged MR 50,000 tons - 330,000 barrels - oil tankers and has four other similar other tankers on order from the Californian shipbuilding company NASSCO. This acquisition is scheduled to be completed in 2014, and, if successful, appears to be the first case whereby a pipeline operator will also be able to offer marine transportation.[citation needed]

In addition to its role in the energy transportation and storage industry, Kinder Morgan operates in two major oil fields in Texas: the Yates Oil Field and the SACROC Unit. Kinder Morgan produces approximately 55,000 barrels per day between the two areas, and claims to be the second-largest oil producer in Texas.[1]


Chairman and CEO Richard Kinder, selected by Morningstar as its 2005 CEO of the Year, receives a salary of $1.00 a year, no bonuses, no option grants, and no restricted stock. Additionally, Kinder Morgan claims that it does not spend money on corporate jets, first-class airfare, sports tickets, or other expensive perquisites.[2]

Leveraged buyout[edit]

On August 28, 2006, Kinder Morgan announced that it would be taken private in a management-led leveraged buyout totaling approximately $22 billion. Outside participants in the transaction include Fayez Sarofim, Goldman Sachs Capital Partners and Highstar Capital (then owned by American International Group).[3]

On September 8, 2010, a notice of a class action settlement was filed in the District Court of Shawnee County Kansas. The proposed settlement is to resolve claims of breach of fiduciary duty owed to Kinder Morgan shareholders by persons involved with the buyout. The settlement payment is to be $200 million. A hearing on the settlement was scheduled for November 12, 2010.[citation needed]

In October 2011, Kinder Morgan Inc. agreed to buy El Paso Corp. (EP) for $21.1 billion and will make the combined company have 67,000 miles (107,000 kilometers) of gas lines and eclipse Enterprise Products Partners LP (EPD) as the biggest U.S. pipeline operator. The transaction paid with shares of Kinder Morgan, Kinder Morgan warrants, and all of cash portion $11.5 billion through Barclays Plc (BARC) borrowing.[4]


Kinder Morgan Brisbane Terminal in Brisbane, California. The 20 tanks here can hold up to 618,000 barrels of petroleum products.
  • Kinder Morgan Energy Partners, SFPP, Mission Valley, California
  • Kinder Morgan Energy Partners, L.P., Houston, Texas
  • Kinder Morgan CO2 Company, Houston, Texas
  • Kinder Morgan Management, LLC, Houston, Texas
  • Kinder Morgan, Inc., Houston, Texas
  • Natural Gas Pipeline Company of America
  • Kinder Morgan Terminals, Houston, Texas
  • Kinder Morgan Power Company, Lakewood, Colorado
  • Kinder Morgan Louisiana Pipeline LLC (KMLP), Crowley, Louisiana

Challenges and Oppositions to Pipelines[edit]

Kinder Morgan Trans Mountain existing pipeline for transporting diluted bitumen between Edmonton, Alberta and Burnaby, East of Vancouver, BC is proposed to be nearly tripled with a capacity of 850,000 barrels per day from 300,000, for a total investment of $5.4 billion. [1] [5][6]

This project is controversial, as are similar pipeline projects Northern Gateway from Alberta to Kitimat, BC, Keystone XL to the US south and Line 9 (Enbridge's project, from Sarnia to Montreal), all of which expand the transportation capacity of heavy crude to refineries or loading ports for export to the US or overseas, a potentially significant contributor to climate change and ocean acidification, and a threat to aquifer and watershed integrity where the lines run. In contrast to its competitors Enbridge and ExxonMobil, however, Kinder Morgan has not had a well publicized major spill or cleanup failure.

The existing and proposed pipelines ship diluted bitumen through the Strait of Juan de Fuca, an extremely sensitive environmental region. The tankers have to pass through a very narrow channel of shallow water to reach the open sea, making the project controversial and strongly opposed by some Canadians [2] and Americans, for reasons similar to the opposition to Keystone XL, Line 9, and Northern Gateway and offshore deep ocean oil drilling.

Sylvarena explosion and death[edit]

In 2009 Boardwalk Pipeline Partners, Southern Company and Kinder Morgan were involved in an explosion that killed one person and injured three people in Sylvarena, Mississippi.[7]


External links[edit]