Kinder Morgan, Inc. is one of the largest midstream energy
companies in North America. During the second quarter, it improved
its topline from the year ago period due to higher volumes in most
of its businesses. Going forward, we believe Kinder Morgan will be
able to seize attractive investment opportunities in the near term,
particularly in the Eagle Ford and Haynesville shale plays. To
shore up growth, the company is moving forward with its planned $17
billion investment in the expansion and joint venture investments
at Kinder Morgan Energy Partners and El Paso. The steady rise in
dividends is also a positive. However we feel all the above
positives have already been factored in the current share price. As
such we are maintaining our Neutral recommendation.
Texas-based Kinder Morgan, Inc., (KMI) is one of the largest
midstream energy companies in North America, operating
approximately 80,000 miles of pipelines transmitting natural gas,
refined petroleum products, crude oil, carbon dioxide and
additional products. It has more than 180 terminals that store
petroleum products and chemicals, as well as ethanol, coal,
petroleum coke and steel.
KMI owns the general partner (GP) interest and incentive
distribution rights (IDRs) of Kinder Morgan Energy Partners, L.P.
(KMP) and El Paso Pipeline Partners, L.P. (EPB). The company also
owns limited partner units of KMP, Kinder Morgan Management, LLC
(KMR) and EPB. KMP is considered to be one of the leading publicly
traded pipeline limited partnerships in America.
The company's reportable business segments comprise KMP's first
five segments as well as NGPL PipeCo LLC. These include:
KMP - Products Pipelines, Natural Gas Pipelines, CO2, Terminals,
Kinder Morgan Canada
NGPL PipeCo LLC - KMI holds 20% equity interest in NGPL PipeCo
LLC that is considered to be a major interstate natural gas
pipeline and storage system.
On May 24, 2012, Kinder Morgan, Inc. completed the acquisition
of El Paso Corporation. The agreement - announced on October 16,
2011 - created the largest natural gas pipeline system in North
America. The purchase price, including El Paso's $17 billion
outstanding debt, was $38 billion. Kinder Morgan shareholders own
approximately 68% of the combined company and El Paso shareholders
hold the balance 32%.
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