Kinder Morgan Inc. CEO Richard Kinder said last week that the company is “gearing up” to complete two pipeline expansions and is on track to begin an expansion of several of its liquids terminals facilities. The CEO said the NGPL pipeline expansion in St. Louis, as well as a North Texas intrastate line running to Dallas to serve power plants, are “both proceeding on schedule and on budget.” The St. Louis expansion will be completed this summer, and the NGPL pipe will be ready in early 2003, and other “opportunities” related to the constrained U.S. energy infrastructure, continue to surface, he said.

“Today we are spending more than $400 million on terminal expansion opportunities,” he said. “And we still project the growth in the company to come two-thirds from internal growth and only about 1/3 from acquisitions.” The company plans to spend more than $100 million in the next year to 18 months on additional terminal expansions for projects on the Houston Ship Channel, along the New York Harbor and at its West Coast facilities in Los Angeles. “We see a lot of opportunities in the next few years backed by solid, long-term subscriptions.”

Kinder, who said the company planned to update investors on a more frequent basis than just through quarterly earnings calls, advised it was “particularly important” to allow feedback with all of the “rumors and nervousness.” However, Kinder said, “our so-called peer group having problems have absolutely no relation to our business mix.”

Although he could not divulge details of some of the future expansions or acquisitions that KMI or Kinder Morgan Energy Partners Ltd. (KMP), the master limited partnership, may be involved with, the CEO said growth will be based on real earnings and substantial value from its pipeline business.

“The opportunities are there,” he said. “Some of the pipeline opportunities are adjacent to ours, other opportunities in lines or terminals are geographically distant.”

Kinder took to task the companies involved in energy trading, which have been hit in recent months by a barrage of continuous negative news. Without naming names, Kinder said, “we’re not in the trading and marketing business. We don’t need to worry about earnings surprises or the upside in earnings because commodity prices change, or because future prices…change. We don’t have to worry that our volumes or revenues erode because a trading partner goes into the tank or runs into financial difficulties.” He said KMI and KMP are not “day to day” businesses. “We’ve got real earnings from real cash flow and real assets.”

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