Kinder Morgan dividend won’t rise in 2017

Houston pipeline giant Kinder Morgan will maintain its reduced dividend payment through 2017, with a goal of raising it in 2018.

Kinder Morgan last year slashed the quarterly payout to investors by 75 percent to 12.5 cents a share from 51 cents in 2015. The company’s 2017 guidance said it plans to hold the dividend at 12.5 cents and revisit the issue later next year “with a view toward delivering additional value to its shareholders.”

Kinder Morgan in October posted its first quarterly loss of the year as the oil bust rippled through the pipeline industry. Kinder Morgan said it lost $227 million for the third quarter compared with a $186 million profit during the same period a year earlier.

Kinder Morgan’s cofounder and executive chairman, Richard Kinder, however, said the pipeline company was poised to grow after using its cash to pay down much of its debt. Kinder added at the time that the tentative plan is to “substantially” increase the dividend, but he did not provide a timetable.

The company, meanwhile, received some good news recently from the Canadian government, which approved a $5.4 billion Kinder Morgan pipeline expansion that would ship heavy crude from oil sands in Alberta to Vancouver-area ports in British Columbia. Kinder Morgan on Monday said it would seek to bring on a joint venture partner to help fund the project.

The 715-mile Trans Mountain represents nearly 40 percent of Kinder Morgan’s $14 billion project backlog. The Trans Mountain expansion would almost triple its existing capacity from 300,000 to 890,000 barrels of crude oil per day. The expansion would lay another pipeline next to the company’s existing one, which began operations in 1953.