Kinder Morgan Closes on the $1.815 Billion Acquisition of NextEra Energy Partners’ South Texas Assets

Kinder Morgan, Inc. today closed on its previously announced $1.815 billion acquisition of NextEra Energy Partners’ South Texas assets (STX Midstream), which includes a set of integrated, large diameter high-pressure natural gas pipeline systems that connect the Eagle Ford basin to key growing Mexico and Gulf Coast demand markets. The acquisition includes a 90% interest in the NET Mexico pipeline (MGI Enterprises, a PEMEX affiliate, owns the other 10%), Eagle Ford Midstream, and a 50% interest in Dos Caminos LLC (Howard Energy Partners (HEP) owns the remaining 50% and will continue to operate the pipeline). Dos Caminos recently placed in service a 62-mile pipeline connecting HEP’s existing midstream pipeline and facilities in Webb County, Texas to KMI’s new Eagle Ford pipeline, which was placed in service on November 1, 2023. This portfolio of assets is highly contracted, with an average contract length of over 8 years. Approximately 75% of the business is supported by take-or-pay contracts.

“We are pleased to add these assets to our natural gas portfolio to serve growing LNG, industrial, Mexico export, and power generation demand markets on the U.S. Gulf Coast,” said KMI President of Natural Gas Pipelines Sital Mody. “These assets integrate well with our existing South Texas footprint and extend our direct connectivity in the lean area of the Eagle Ford Basin, allowing us to offer LNG customers greater access to desirable low-nitrogen natural gas supply.”

KMI expects the acquisition to be accretive to its preliminary 2024 budget guidance with the purchase price equal to 8.6 times the 2024 EBITDA and a long-term investment-to-EBITDA multiple of approximately 7.0-7.5 times, inclusive of commercial synergies. Initially, we plan to fund the transaction with cash on hand and short-term borrowings, increasing our expected Net Debt-to-Adjusted EBITDA ratio for 2024 by approximately 0.1 times after including a full year Adjusted EBITDA contribution from the asset. Expected acquisition EBITDA multiples, Net Debt and Adjusted EBITDA are non-GAAP measures. For definitions of these measures and reconciliations to comparable GAAP measures, where applicable, please refer to KMI’s Investor Presentation for 4Q 2023, which is available at the Investor Relations Page of www.kindermorgan.com under “Events and Presentations.”