Kinder Morgan Inc (KMI): The Opportunity

Kinder Morgan’s carbon dioxide business is a great strength, but it is also the business segment most exposed to commodity risk, which we will look at later. The country’s leading transporter and marketer of carbon dioxide has assets in all the right places to serve oil producers looking for help in enhanced oil recovery. Kinder Morgan has an ownership stake in the two largest CO₂ domes, which provide a combined 1.5 billion cubic feet of CO₂ per day to operators in Utah, Oklahoma, and the Permian Basin.

Things are going so well for Kinder Morgan Inc (NYSE:KMI)’s CO₂ business that the company has had to turn customers away. As a result of increasing demand in the Permian Basin, Kinder Morgan has acquired and begun to develop the St. Johns CO₂ field. Stretching across Arizona into New Mexico, St. Johns is expected to provide about 400 million cubic feet of CO₂ per day to producers in the Permian.

Finally, Kinder Morgan’s Texas intrastate assets have always been important revenue generators for the partnership. The partnership continued to improve its footprint here with its January 2013 announcement that it would acquire Copano Energy. Copano has nine processing plants, including the third-largest facility in Texas, which will expand Kinder Morgan Inc (NYSE:KMI)’s midstream capabilities and overall presence in the Eagle Ford Shale.

The article What’s the Opportunity at Kinder Morgan originally appeared on Fool.com and is written by Aimee Duffy.

Motley Fool contributor Aimee Duffy has no position in any stocks mentioned. The Motley Fool recommends El Paso Pipeline Partners and Kinder Morgan. The Motley Fool owns shares of Kinder Morgan.

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