Houston’s Kinder Morgan, Inc., a company with thousands of miles of pipeline system and 10 natural gas gathering systems in Oklahoma announced the $4.5 billion sale of the Trans Mountain Pipeline System to Canada.
The company said the agreement not only includes the purchase of the system but an expansion project by the government of Canada. The company also agreed to work with Canada in finding a third-party buyer for the pipeline system and expansion through July, 2018.
As part of the agreement, the Canadian government agreed to fund the resumption of the expansion project. The deal is expected to be closed late in the third quarter of early fourth quarter of the year.
“We are pleased that KML and the Government were able to reach agreement on a transaction that benefits the people of Canada, TMEP shippers and both KMI and KML shareholders,” said KMI Chief Executive Officer, and KML Chairman and CEO, Steve Kean. “The outcome reached represents the best opportunity to complete TMEP and thereby realize the great economic benefits promised by that project.
Kean said despite losing the EBITDA associated with the Trans Mountain system, he still expects to meet the 2018 distributable cash flow per share target.
“With respect to future growth, we are confident that KMI will continue to find investment opportunities across its unparalleled network of midstream assets. Since mid-2015, we have added on average approximately $1.3 billion per year to our backlog,” continued Kean.
Kinder Morgan has an expansive operation in Oklahoma where it has 10 natural gas gathering systems with 4,600 miles of gas gathering pipelines, 5 natural gas treating facilities and 3 natural gas processing plants.
The systems gather, compress, treat and process compressed gas from wells in Atoka, Blaine, Carter, Cleveland, Coal, Creek, Garvin, Garfield, Grady, Haskell, Hughes, Latimer, Le Flore, Lincoln, McClain, McIntosh, Noble, Okfuskee, Oklahoma, Okmulgee, Osage, Pawnee, Payne, Pittsburg, Pottawatomie, Pontotoc, Seminole, Stephens, Tulsa, Wagoner and Washington Counties.