Tags: Kinder Morgan Energy Partners | KMP | Copano Energy | CPNO | Williams Partners | WPZ | energy

Kinder Morgan Pumping Out Profits

By    |   Tuesday, 12 Jul 2011 02:04 PM

When it comes to leaders in moving and storing energy, Kinder Morgan Energy Partners (KMP) is king of the North American stage. With more than 28,000 miles of pipelines and 180 terminals owned or managed by the company, it is doing nothing but going from strength to strength even when revenues are down.

Big deals are moving down the pipeline, with two major announcements made in recent weeks that are sure to add confidence for investors. KMP just put $67 million into the purchase of a newly constructed petroleum coke terminal in Port Arthur, Texas from TGS Development Group. The project is expected to immediately add to the company’s cash flow and earnings.

That brings the company to 13 million tons of petcoke production a year by year’s end.

Also in Texas, the company’s joint venture with Copano Energy (CPNO) just did a deal with Williams Partners (WPZ) to process its shale production at Williams’ plant in Matagorda County. The venture will construct a 7-mile, 20-inch lateral to connect its previously announced crossover pipeline project to the Markham plant and install approximately 3,400 horsepower of compression at a cost of approximately $27 million. Groundbreaking on the crossover pipeline is expected in July with operations before year’s end.

A bit further north, the company recently announced it had to ration capacity on its Trans Mountain pipeline system, which carries Alberta crude to southern British Columbia and Puget Sound in Washington state, because customers wanted to push through more volume than the pipeline could carry.

Demand rises

That’s good news for KMP as that demand will push them to boost capacity to satisfy their customer base. With this new rationing, customers can only push through 68 percent of what they wanted, meaning they’ll soon be clamoring for more.

KMP has been trading mid-range on its 52-week high and low with S&P giving a strong buy rating. Despite lower earnings in its first quarter reporting, KMP managed to also bring its operating costs down significantly in order to still end the quarter with about $20 million in higher net income and even a higher dividend than the same period last year.

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When it comes to leaders in moving and storing energy, Kinder Morgan Energy Partners (KMP) is king of the North American stage. With more than 28,000 miles of pipelines and 180 terminals owned or managed by the company, it is doing nothing but going from strength to...
Kinder Morgan Energy Partners,KMP,Copano Energy,CPNO,Williams Partners,WPZ,energy,oil,pipelines,stocks
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2011-04-12
Tuesday, 12 Jul 2011 02:04 PM
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