Kinder Morgan, Inc. (KMI) has proposed to pay about $158 million for three terminals and an undeveloped site that it intends to acquire from Royal Vopak.
The purchase comprises a 36-acre, 1,069,500 barrel storage complex at Galena Park, TX. This facility is immediately adjacent to Kinder Morgan’s Galena Park terminal complex and manages base oils, biodiesel as well as crude oil.
The acquisition also includes two Vopak terminals in North Carolina. One of the terminals, located in North Wilmington, manages chemicals and black oil. The other one is in South Wilmington and is currently non-operational. Lastly, the undeveloped site at Perth Amboy, NJ, has a waterfront access that can be developed.
Subject to customary approvals, the transaction is anticipated to close during the first quarter of 2015 and will be immediately accretive to Kinder Morgan’s earnings.
This transaction will strengthen Kinder Morgan’s position as the largest independent terminal operator in North America by augmenting the company’s liquids storage capacity by over 2.2 million barrels and 115 tanks. Moreover, the acquisition will add critical dock capacity on the Houston Ship Channel and in Wilmington.
Even without the planned acquisition, Kinder Morgan’s overall Houston Ship Channel presence will total over 400 storage tanks with 43 million barrels of capacity upon completion of its existing expansion projects.
Kinder Morgan is one of the largest midstream energy companies in North America. The company operates 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.
Kinder Morgan currently carries a Zacks Rank #4 (Sell).
Better-ranked players from the energy sector such as InterOil Corp. (IOC), Golar Energy Partners LP (GMLP) and Hallador Energy Co. (HNRG) sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment