Kinder Morgan to acquire NextEra Energy Partner’s South Texas assets for $1.8 billion

Kinder Morgan Inc. (KMI), Houston, has agreed to acquire NextEra Energy Partner’s South Texas assets, STX Midstream, for $1.815 billion.

The STX Midstream pipeline system includes integrated, large diameter high pressure natural gas pipelines that connect the Eagle Ford basin to Mexico and Gulf Coast demand markets.

The acquisition of 462 miles of pipeline with 4.9 bcfd of transport capacity compliments KMI’s existing assets and will enable the company “to capture incremental opportunities serving LNG, power generation, LDC customers, and exports to Mexico,” said Sital Mody, KMI president of natural gas pipelines, in a release Nov. 6.

STX Midstream includes a 90% interest in the NET Mexico pipeline; MGI Enterprises, a PEMEX affiliate, owns the other 10%.

STX Midstream owns and operates Eagle Ford Midstream, a 158-mile residue line connecting the Eagle Ford basin to the Agua Dulce Hub in Nueces County, Tex. Eagle Ford Midstream is connected to multiple pipeline systems, including KMI’s Tennessee Gas Pipeline, Kinder Morgan Tejas Pipeline, and Natural Gas Pipeline Company of America.

STX Midstream also owns a 50% interest in Dos Caminos LLC, which is operated by, and the other 50% interest owned by, Howard Energy Partners (HEP). Dos Caminos has placed in service a 62-mile pipeline that connects HEP’s existing midstream pipeline and infrastructure in Webb County, Tex. to KMI’s new Eagle Ford pipeline, which was recently placed in service.

The portfolio of assets is highly contracted, with an average contract length over 8 years, KMI said. About 75% of the business is supported by take-or-pay contracts.

The transaction requires clearance under Hart-Scott-Rodino and is expected to close in first-quarter 2024.