Kinder Morgan acquires STX Midstream for $1.815 billion

Kinder Morgan has signed an agreement to acquire NextEra Energy Partners' natural gas pipeline subsidiary STX Midstream in South Texas for $1.815 billion.
Kinder Morgan Acquiert STX Midstream

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Kinder Morgan recently announced its agreement to acquire STX Midstream, a subsidiary of NextEra Energy Partners. This strategic decision marks an important step in the company’s ongoing expansion.

Details of the Acquisition and Assets of STX Midstream

STX Midstream currently owns 462 miles of natural gas pipelines connecting the Eagle Ford Basin to various markets, including Mexico and the Gulf Coast. This acquisition will enable Kinder Morgan to expand its presence and diversify its activities in the region.

Growth prospects for Eagle Ford and exports to Mexico

The transaction is expected to close in the first quarter of 2024, and will be financed by available cash and short-term borrowings. With this acquisition, Kinder Morgan plans to seize new opportunities in LNG, power generation, LDC customers and exports to Mexico.

STX Midstream’s interest in Dos Caminos and Other Assets

STX Midstream also holds a 50% stake in Dos Caminos, in partnership with Howard Energy Partners. Dos Caminos recently commissioned a 62-mile line connecting HEP’s Eagle Ford midstream and pipeline facilities to KMI’s new Eagle Ford pipeline line in Freer. This collaboration further strengthens STX Midstream’s position in the region.

The sale of STX Midstream is in line with NextEra’s strategy of focusing exclusively on its renewable energies portfolio. NextEra will use part of the funds from this sale to finalize the redemption of its convertible equity portfolio financing from its Renewable Energy Fund II by 2025. This decision reflects NextEra’s commitment to clean, sustainable energy.

By acquiring STX Midstream, Kinder Morgan strengthens its position in the South Texas natural gas sector, paving the way for significant growth in production and exports to Mexico. The acquisition comes against the backdrop of growing demand for gas in the United States, and enables NextEra to focus more on its renewable energy portfolio.

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