Kinder Morgan Acquires Gas Gathering, Processing System in Bakken for $640 Million
(P&GJ) — Houston-based Kinder Morgan Inc. has announced plans to acquire a natural gas gathering and processing system in North Dakota’s Williston Basin from Outrigger Energy II LLC for $640 million.
The deal includes a 270 million cubic feet per day (MMcf/d) processing facility and a 104-mile high-pressure rich gas gathering pipeline with a capacity of 350 MMcf/d. The system, strategically located in the Bakken formation, is supported by long-term contracts with key customers in the region.
“We’re pleased to be integrating this complementary system with our existing Hiland gas assets to aggregate additional supplies from the Bakken,” said Tom Dender, president of Kinder Morgan’s Natural Gas Midstream segment. “This strategic acquisition allows us to efficiently expand our footprint and provide incremental transportation and processing services to meet the growing needs of our customers.”
Kinder Morgan estimates the acquisition will immediately benefit shareholders, projecting a 2025 adjusted EBITDA multiple of approximately 8 times on a full-year basis. This calculation excludes $20 million in expected cash payments for 2025 that are subject to deferred revenue recognition.
The company plans to fund the purchase using short-term borrowings and cash on hand. It also anticipates the acquisition will reduce the need for future capital expenditures to support growth among its existing Bakken customers.
The transaction, which requires approval under the Hart-Scott-Rodino Act, is expected to close in the first quarter of 2025.
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