A company that’s run by shareholders, for shareholders
Founded two decades ago, Kinder Morgan has become the largest independent transporter of petroleum products in the US and boasts a vast network of pipelines stretching across North America.
in the late 1990s the emergence of commercial hydraulic fracturing and horizontal drilling for shale (collectively known as fracking) transformed the US energy landscape. These technologies enabled access to previously unreachable, abundant North American oil and gas reserves. After decades of heavy dependence on imported energy, the US is now the largest global natural gas producer, and by 2020 could overtake Saudi Arabia as the world’s largest supplier of hydrocarbons. A key beneficiary of these developments has been Kinder Morgan, now North America’s largest energy infrastructure company.
Founded in 1997 by college friends Richard Kinder and William Morgan when they acquired Enron Liquids Pipeline for $40m, Kinder Morgan now has a market capitalisation of close to $50bn. It has invested in an unparalleled network of pipelines, terminals and processing facilities across the US and Canada. This network uniquely positions the company to take advantage of the growing need for energy infrastructure to support domestic oil and gas production.
Exploiting the oil and gas opportunity
The US economy has relied heavily on imported energy for the past 40 years or so and related infrastructure was structured to support this. Imported supplies were transported in one direction: from the US Gulf Coast refineries and ports to the mid-continent region. Following the “fracking revolution”, new infrastructure was required to connect the new shale wells – located across the country – to the existing refinery centres. Refined product then either needs to be transported to ports for export, or back through a complex network of pipelines for domestic use across the breadth of the US. Seeing opportunity, Kinder Morgan invested heavily to meet this demand by buying up numerous smaller pipeline businesses and building new lines to connect new shale wells to existing networks. Today, the company’s vast network of pipelines, terminals and processing facilities spans approximately 135 000km and comprises 180 terminals, which store and redirect flow.
Natural gas is an increasingly important energy source powering the US economy, overtaking coal in 2015 as the most-consumed fuel (highlighted in the graph below). Demand for US natural gas is projected to increase by a further 35% over the next 10 years. Kinder Morgan has the largest natural gas network in the US with 111 000km of pipeline, connected to every important US natural gas or shale gas resource. Thirty-eight percent of the natural gas consumed in North America moves through the company’s pipelines.
The company is the largest independent transporter of petroleum products, moving 2.1m barrels of product a day. It transports gasoline, jet fuel, diesel, crude, natural gas liquids and more from the Gulf Coast refineries to wholesale distribution centres throughout the country.
Kinder Morgan is the largest transporter of carbon dioxide, transporting 1.2bn cubic feet a day. Most of the carbon dioxide
The US is now the largest global natural gas producer, and by 2020 could overtake Saudi Arabia as the world’s largest supplier of hydrocarbons.