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Kinder Morgan (KMI) Signs Deal to Acquire Texas Gas Pipelines
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Kinder Morgan, Inc. (KMI - Free Report) announced that it will acquire NextEra Energy Partners’ (NEP - Free Report) natural gas pipelines in South Texas for $1.82 billion.
The Texas natural gas pipeline portfolio encompasses seven pipelines that serve as essential pathways for natural gas supply to Mexico, and various power producers and municipalities in South Texas. In total, the pipelines have a significant transport capacity, capable of delivering 4.9 billion cubic feet of natural gas per day.
Kinder Morgan’s purchase of NEP’s Texas gas pipeline assets fits well with its plan to expand its current natural gas pipeline network. South Texas is an important area for moving and providing energy, which makes the latest acquisition a smart strategy for KMI.
The oil and gas pipeline industry has witnessed a surge in consolidation this year, primarily driven by growth in U.S. production and ongoing challenges surrounding permits for new pipelines. These factors have increased the value of existing operators in the industry.
Kinder Morgan’s acquisition of NextEra Energy Partners’ Texas natural gas pipeline portfolio, STX Midstream, serves as a clear illustration of this trend. The industry’s consolidation is primarily motivated by the necessity for efficiency and scale to address the increasing requirements for energy transportation.
Kinder Morgan intends to finance the acquisition using its available cash and short-term borrowings. The transaction is anticipated to be finalized in the first quarter of 2024.
Oceaneering International, Inc. (OII - Free Report) reported third-quarter 2023 adjusted earnings of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. OII’s outperformance was largely due to the robust results in certain segments.
For the fourth quarter of 2023, OII anticipates a decline in EBITDA on relatively flat revenues from that reported in the third quarter.
Liberty Energy Inc. (LBRT - Free Report) reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The Denver, CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. The dividend increased 40% from the previous quarter’s level.
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Kinder Morgan (KMI) Signs Deal to Acquire Texas Gas Pipelines
Kinder Morgan, Inc. (KMI - Free Report) announced that it will acquire NextEra Energy Partners’ (NEP - Free Report) natural gas pipelines in South Texas for $1.82 billion.
The Texas natural gas pipeline portfolio encompasses seven pipelines that serve as essential pathways for natural gas supply to Mexico, and various power producers and municipalities in South Texas. In total, the pipelines have a significant transport capacity, capable of delivering 4.9 billion cubic feet of natural gas per day.
Kinder Morgan’s purchase of NEP’s Texas gas pipeline assets fits well with its plan to expand its current natural gas pipeline network. South Texas is an important area for moving and providing energy, which makes the latest acquisition a smart strategy for KMI.
The oil and gas pipeline industry has witnessed a surge in consolidation this year, primarily driven by growth in U.S. production and ongoing challenges surrounding permits for new pipelines. These factors have increased the value of existing operators in the industry.
Kinder Morgan’s acquisition of NextEra Energy Partners’ Texas natural gas pipeline portfolio, STX Midstream, serves as a clear illustration of this trend. The industry’s consolidation is primarily motivated by the necessity for efficiency and scale to address the increasing requirements for energy transportation.
Kinder Morgan intends to finance the acquisition using its available cash and short-term borrowings. The transaction is anticipated to be finalized in the first quarter of 2024.
Zacks Rank & Key Picks
KMI currently has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International, Inc. (OII - Free Report) reported third-quarter 2023 adjusted earnings of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. OII’s outperformance was largely due to the robust results in certain segments.
For the fourth quarter of 2023, OII anticipates a decline in EBITDA on relatively flat revenues from that reported in the third quarter.
Liberty Energy Inc. (LBRT - Free Report) reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The Denver, CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. The dividend increased 40% from the previous quarter’s level.