Leading master limited partnership,
Kinder Morgan Energy Partners L.P.
) announced its plans to construct and operate a new 213-mile,
16-inch diameter pipeline to facilitate the transportation of
carbon dioxide or CO2. The new pipeline would transport CO2 from
the St. Johns source field in Apache County, AZ, to the Cortez
Pipeline in Torrance County, NM.
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The new Lobos pipeline will possess a capacity of 300 million
standard cubic feet per day initially. The pipeline will support
current and future enhanced oil recovery (EOR) projects owned by
Kinder Morgan and other operators in the Permian Basin of West
Texas and eastern New Mexico.
The partnership is expected to spend approximately $300 million
on the pipeline. Alongside it will invest an additional $700
million to drill wells and build field gathering, treatment and
compression facilities at the St. Johns field. It is expected
that the project will be operational by the third quarter of 2016
and employ about 1,200 contractors during construction.
Kinder Morgan is the biggest independent owner and operator of
petroleum product pipelines in the U.S. and transports natural
gas, refined petroleum products, crude oil, carbon dioxide and
other products. Alongside, its terminals store petroleum products
and chemicals and handle bulk materials such as petroleum coke
and coal. It owns or operates more than 28,000 miles of pipeline
and approximately 180 terminals. The partnership is also the
largest carbon dioxide marketer and transporter in the country.
Kinder Morgan expects to declare cash distributions of $5.58 per
unit for 2014, a 5% increase over its 2013 distribution of $5.33
per unit. The partnership also expects to exceed its
distributable cash flow per unit target primarily as a result of
the positive impact of tanker acquisition of approximately $962
million in Dec 2013. It expects steady growth opportunities
across all business segments, including the need for more
midstream infrastructure to move and store oil, gas and liquids
from the prolific shale play in the United States and the
oilsands in Alberta.
Kinder Morgan carries a Zacks Rank #3 (Hold). Better-ranked
stocks in the oil and gas industry include
Helmerich & Payne, Inc.
Clayton Williams Energy, Inc.
Patterson-UTI Energy Inc.
). All three stocks have a Zacks Rank #1 (Strong Buy).