Kinder Morgan, Inc. KMI announced a equally owned joint venture with Keyera Corp. to build a new crude oil storage terminal in Edmonton, Alberta. The joint venture owners have entered into long-term, firm take-or-pay agreements with strong, credit-worthy customers to build 4.8 million barrels of crude oil storage at a new facility called the Base Line Terminal.
KMI’s investment in the joint venture terminal is approximately CAD$342 million (including capitalized interest) for an initial 12 tank build-out. The commissioning is expected to begin in the second half of 2017. Separately, KMI will invest up to an additional CAD$69 million outside the joint venture in connecting pipelines and related infrastructure for a total project investment of approximately CAD$411 million. The terminal is under development on land owned by Keyera and will be operated by Kinder Morgan.
The Base Line Terminal will be connected via pipeline to Kinder Morgan’s Edmonton terminals and will source all crude streams handled by Kinder Morgan for delivery to multiple destinations, including, but not limited to, Kinder Morgan’s Trans Mountain Pipeline and two Edmonton rail terminals, and other major export pipelines.
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.
During the fourth quarter, Kinder Morgan reported improved revenues on an annual basis, buoyed by higher volumes in most of its businesses. The company also increased its fourth-quarter dividend by 10% to 45 cents per share from 41 cents paid in the fourth quarter of 2013. The company projects a dividend of $2.00 per share for 2015, up about 16% from the dividend of $1.72 declared in 2014.
Kinder Morgan has identified growth opportunities of $17.6 billion over the next five years of which $2.6 billion is expected in 2015 itself. The company continues to prove that it is capable of utilizing its extensive presence to boost domestic production, price differentials and shifting demand. With four of the five segments scheduled to receive over $500 million in capital, the company is poised for growth in the near future.
Kinder Morgan currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked players in the energy sector include Valero Energy Partners L.P. VLP, Sprague Resources LP SRLP and Western Gas Equity Partners LP WGP. Each of these stocks sports 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