Kinder Morgan will purchase a natgas gathering systems for $640 million

Kinder Morgan, a pipeline operator, said that its Hiland Partners unit has agreed to purchase a natural-gas gathering and processing system from Outrigger Energy II LLC in North Dakota for $640m.

As U.S. oil production has increased, the oil and gas sector has seen a consolidation of operators. Persistent problems with permits for new pipelines also have made existing operators valuable.

Kinder Morgan purchased NextEra Energy’s South Texas gas pipelines for $1.82 billion in 2023.

Kinder Morgan's North Dakota purchase includes a processing facility capable of 270 million cubic foot per day (mmcfd), and a gas gathering header pipe with a 350 mmcfd capacity that connects supplies from the Williston Basin to high-demand market.

The deal is expected to be completed in the first quarter 2025. It will immediately increase the company's profits and lower future capital expenditures needed to accommodate its customers in the Bakken oil producing region. (Reporting and editing by Shinjini Ganuli and ShounakDasgupta in Bengaluru)

(source: Reuters)