HomeNewsKinder Morgan acquires gas gathering and processing system from Outrigger Energy II

Kinder Morgan acquires gas gathering and processing system from Outrigger Energy II

1/14/2025
  • $640-MM purchase includes 270-MMft3d processing plant and rich gas header system strategically located in Williston Basin, North Dakota (U.S.)

Kinder Morgan Inc. (KMI) subsidiary, Hiland Partners Holdings LLC, has agreed to purchase a natural gas gathering and processing system in North Dakota from Outrigger Energy II LLC for $640 MM.

The acquisition includes a 270-MMft3d processing facility and a 104-mi., large-diameter, high-pressure rich gas gathering header pipeline with 350 MMft3d of capacity connecting supplies from the Williston Basin area to high-demand markets. The gathering and processing system is backed by long-term contracts with commitments from major customers in the basin.

“We’re pleased to be integrating this complementary system with our existing Hiland gas assets to aggregate additional supplies from the Bakken,” said KMI Natural Gas Midstream President Tom Dender. “This strategic acquisition allows us to efficiently expand our footprint and provide incremental transportation and processing services to meet the growing needs of our customers.”

KMI expects the acquisition to be immediately accretive to its shareholders, with a 2025 Adjusted EBITDA multiple of approximately 8 times on a full-year basis. Adjusted EBITDA does not include approximately $20 MM of expected cash payments in 2025 that receive deferred revenue recognition. With this transaction, KMI expects to reduce future capital expenditures needed to accommodate the growth of its existing Bakken customers. Initially, KMI plans to fund the transaction with short-term borrowings and cash on hand.

The transaction requires clearance under Hart-Scott-Rodino and is expected to close in the first quarter of 2025.

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