Kinder Morgan, one of the largest infrastructure energy companies in North America, announced it has entered into an agreement to acquire renewable natural gas (RNG) company Kinetrex Energy; the leading supplier of liquefied natural gas (LNG) in the Midwest.
Firstly, the acquisition of Indianapolis-based company will be done from an affiliate of Parallel49 Equity; as said above Kinetrex Energy is an LNG leader and it is rapidly growing player in producing and supplying RNG, under long term contracts to transportation service providers.
In fact, Kinetrex has a 50% interest in the largest RNG facility in Indiana; as well as signed commercial agreements to begin construction on three additional landfill-based RNG facilities.
Secondly, the acquisition’s value is around $310 million; it includes two small scale, domestic LNG facilities; a 50% interest in a landfill RNG facility, and three additional RNG facilities with signed commercial arrangements.
Thirdly, one Kinetrex finalizes the construction of the facilities, all four of them will have a total capacity of over four billion cubic feet of RNG. The transaction still requires regulatory approval under Hart-Scott-Rodino; and will close in the third quarter of 2021.
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Kinetrex’s members to join Kinder Morgan after acquisition
Moreover, the RNG produced by Kinetrex Energy derives from abundant renewable sources; including organic waste in landfills, also, wastewater treatment plants and agricultural operations. Kinetrex captures methane produced from the decomposition of organic waste, reducing substantially the GHG emissions on the gas.
In addition, about the importance of the acquisition, Kinder Morgan ETV President Jesse Arenivas, said. “This is a great day in the young history of Kinder Morgan Energy Transition Ventures (ETV). We have been focused on RNG due to its potential to grow rapidly in the near term; and also deliver attractive returns, with landfills providing a low cost, predictable and long-term feedstock.”
He also remarked. “The team at Kinetrex has developed an outstanding business model and platform for future growth in a fragmented market; and we are excited to welcome them to Kinder Morgan.”
On the other hand, Kinetrex CEO Aaron Johnson, said. “Kinder Morgan’s expertise, extensive pipeline network and broad customer relationships will undoubtedly help us realize the vision we had in founding Kinetrex eight years ago; to provide holistic solutions for customers seeking to meet emission reduction targets.”
Finally, as part of the acquisition, key members of Kinetrex’s management team will join Kinder Morgan; to pursue new projects that expand their successful RNG platform.