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Kinder’s Kinetrex Deal Opens Door to Small-Scale LNG, RNG Investments
Kinder Morgan Inc. (KMI) has closed on its $310 million acquisition of Kinetrex Energy, part of the company’s new interest in low carbon investments.
The acquisition includes liquefied natural gas (LNG) production and fueling facilities, a 50% interest in a landfill-based renewable natural gas (RNG) facility in Indiana, and commercial agreements for three additional RNG facilities.
Indianapolis-based Kinetrex claims to be the largest supplier of LNG in the Midwest with two LNG production facilities in Indianapolis. Each has 1 Bcf of cryogenic storage capacity. It also has four truck-loading stations.
On the RNG side, Kinetrex holds a 50% interest in a landfill RNG facility in Indiana. The assets to be acquired also include three more landfill RNG sites, along with signed commercial agreements. The facilities are expected to come online over the next 18 months.
The company will continue operations as Kinetrex Energy, a Kinder Morgan company.
KMI’s Energy Transition Ventures group was formed earlier this year and has been tasked with scouting low-carbon investments for the Houston-based midstream giant.
During the second quarter earnings call, CEO Steven Kean said KMI’s purchase of Kinetrex was a “rare platform investment in a highly fragmented market.” The acquisition, according to the chief, gives KMI “a nice head start” on working on the myriad potential RNG project candidates in the United States.
“We’ve got a lot of opportunity to build this business organically,” Kean said.
Other midstream companies are also getting involved in the RNG space. Midstream giant Williams currently delivers RNG by partnering with energy companies in several states to transport methane emissions captured from landfills or dairy farms where the methane is a byproduct of the waste decomposition process.
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