HOUSTON--(BUSINESS WIRE)--Dec. 3, 2013--
Kinder Morgan today announced its preliminary 2014 projections for
Kinder Morgan, Inc. (NYSE: KMI), Kinder Morgan Energy Partners, L.P.
(NYSE: KMP), Kinder Morgan Management, LLC (NYSE: KMR) and El Paso
Pipeline Partners, L.P. (NYSE: EPB). Chairman and CEO Richard D. Kinder
stated, “We anticipate strong growth in 2014 across the Kinder Morgan
family of companies. We currently have identified approximately $14.4
billion in expansion and joint venture investments that we are confident
will contribute to our growth, and we are pursuing customer commitments
for many more projects.” Kinder Morgan owns and operates a large,
diversified portfolio of primarily fee-based energy assets across North
America that historically have produced substantial cash flow in
virtually all types of market conditions.
KMI expects to declare dividends of $1.72 per share for 2014. This
represents an approximate 10 percent increase over KMI’s 2013 budget
target of $1.57 per share and an approximate 8 percent increase over the
$1.60 per share of dividends it expects to declare for 2013. Growth at
KMI in 2014 is expected to be driven by continued strong performance at
KMP and contributions from EPB. The growth at KMI from KMP and EPB will
be partially offset by the loss of income from the 2013 and expected
2014 sales (dropdowns) of certain assets to KMP and EPB. Subject to
appropriate board approvals, KMI expects to drop down its 50 percent
interest in Ruby Pipeline, its 50 percent interest in Gulf LNG and its
47.5 percent interest in Young Gas Storage to EPB during 2014.
KMP expects to declare cash distributions of $5.58 per unit for 2014, an
approximate 6 percent increase over its 2013 budget target of $5.28 per
unit and an approximate 5 percent increase above its current expectation
of $5.33. (KMR also expects to declare distributions of $5.58 per share
for 2014 and the distribution to KMR shareholders will be paid in the
form of additional KMR shares.)
“We see exceptional growth opportunities across all of KMP’s business
segments, including the need for more midstream infrastructure to move
and store oil, gas and liquids from the prolific shale plays in the
United States and the oilsands in Alberta, along with increasing demand
for CO2,” Kinder said.
In 2014, KMP expects to:
Generate approximately $6.4 billion in business segment earnings
before DD&A (adding back KMP’s share of joint venture DD&A), an
increase of approximately $750 million over the 2013 forecast.
Distribute over $2.5 billion to its limited partners.
Invest approximately $3.6 billion in expansions (including
contributions to joint ventures) and small acquisitions. Almost $720
million of the equity required for this investment program is expected
to be funded by KMR share dividends.
KMP’s expectations assume an average West Texas Intermediate (WTI) crude
oil price of approximately $96.15 per barrel in 2014, which approximated
the forward curve at the time this budget was prepared. The overwhelming
majority of cash generated by KMP’s assets is fee based and is not
sensitive to commodity prices. In its CO2 segment, the
company hedges the majority of its oil production, but does have
exposure to unhedged volumes, a significant portion of which are natural
gas liquids. For 2014, the company expects that every $1 change in the
average WTI crude oil price per barrel will impact the CO2 segment
by approximately $8 million, or approximately 0.125 percent of KMP’s
combined business segments’ anticipated segment earnings before DD&A.
EPB expects to declare cash distributions of $2.60 per unit for 2014, an
approximate 2 percent increase over its 2013 expected distribution of
$2.55 per unit. EPB’s 2014 budget includes the expected purchase
(dropdown) from KMI of 50 percent of Ruby Pipeline, 50 percent of Gulf
LNG and 47.5 percent of Young Gas Storage. The positive impact from the
expected dropdowns at attractive multiples will be largely offset by the
impacts of the Southern Natural Gas and Wyoming Intestate Company (WIC)
rate cases and expected lower rates on contract renewals on the WIC
system. In 2014, EPB expects its regulated pipeline and storage assets,
along with its LNG business, to generate earnings before DD&A of almost
$1.3 billion (adding back EPB’s share of joint venture DD&A), an
increase of almost $90 million compared to 2013. EPB also has over $1
billion of expansion projects under contract with customers, which will
benefit EPB unitholders in 2016 and beyond.
The boards of directors will review and approve the 2014 Kinder Morgan
budgets at the January board meeting and the budgets will be discussed
in detail during the company’s annual analyst meeting on Jan. 29, 2014,
in Houston. Kinder Morgan remains committed to transparency and will
continue to publish its budgets on the company’s web site, www.kindermorgan.com.
The 2014 budget will be the standard by which KMI, KMP, KMR and EPB
measure their performance next year, and will be a target for
determining employee bonuses.
Kinder Morgan is the largest midstream and the fourth largest energy
company in North America with a combined enterprise value of
approximately $105 billion. It owns an interest in or operates
approximately 82,000 miles of pipelines and 180 terminals. Its pipelines
transport natural gas, gasoline, crude oil, CO2 and other
products, and its terminals store petroleum products and chemicals and
handle such products as ethanol, coal, petroleum coke and steel. Kinder
Morgan, Inc. (NYSE: KMI) owns the general partner interest of Kinder
Morgan Energy Partners, L.P. (NYSE: KMP) and El Paso Pipeline Partners,
L.P. (NYSE: EPB), along with limited partner interests in KMP and EPB
and shares in Kinder Morgan Management, LLC (NYSE: KMR). For more
information please visit www.kindermorgan.com.
This news release includes forward-looking statements. These
forward-looking statements are subject to risks and uncertainties and
are based on the beliefs and assumptions of management, based on
information currently available to them. Although Kinder Morgan believes
that these forward-looking statements are based on reasonable
assumptions, it can give no assurance that such assumptions will
materialize. Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include
those enumerated in Kinder Morgan’s reports filed with the Securities
and Exchange Commission. Forward-looking statements speak only as of the
date they were made, and except to the extent required by law, Kinder
Morgan undertakes no obligation to update or review any forward-looking
statement because of new information, future events or other factors.
Because of these uncertainties, readers should not place undue
reliance on these forward-looking statements.
Source: Kinder Morgan
Larry Pierce, 713-369-9407