Kinder Morgan is acquiring SouthTex Treaters in a $155 million transaction. The acquisition adds to Kinder Morgan’s ability to deliver needed processing in the Eagle Ford Shale. The company will now offer lease arrangements or can simply sell amine plants.
Amine plants are being used more widely across the Eagle Ford due to levels of H2S (Sour Gas) in the natural gas stream. The hydrogen sulfide has to be separated from natural gas production before pipeline operators will transport the gas. One of the quickest way to get cut off from the gathering system is to go above acceptable levels of H2S (4 ppm).
Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced it has signed a definitive purchase and sale agreement to acquire SouthTex Treaters, a leading manufacturer, designer and fabricator of natural gas treating plants that remove CO2 and H2S, for approximately $155 million. The manufactured amine plants range in size from 5 to 1,200 gallons per minute of treating capacity. Kinder Morgan Treating, a subsidiary of KMP, is the industry leader and largest provider of contract operated treating and hydrocarbon dew point conditioning plants. The acquisition will allow Kinder Morgan Treating to build amine plants and offer customers the option to own or lease the equipment.
“This acquisition will enable us to provide large amine plants for centralized treating facilities which are often needed in the rapidly developing shale plays,” said Bill Stokes, vice president of Kinder Morgan Treating. “We will also be able to replenish our already large inventory of amine plants and offer our customers even more flexibility for their treating needs.” Upon closing, which is likely to occur within the fourth quarter this year, the transaction is expected to be immediately accretive to cash distributable to KMP unitholders.
Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline transportation and energy storage company in North America. KMP owns an interest in or operates more than 28,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. KMP is also the leading provider of CO2 for enhanced oil recovery projects in North America. One of the largest publicly traded pipeline limited partnerships in America, KMP has an enterprise value of over $33 billion. The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI). Combined, KMI and KMP have an enterprise value of approximately $55 billion.
Read the entire press release at kindermorgan.com