Kinder Morgan to acquire renewable natural gas developer Kinetrex Energy

Energy infrastructure giant Kinder Morgan (KMI) has agreed to acquire renewable natural gas developer Kinetrex Energy from an affiliate of Parallel49 Equity for $310 million.

Based in Indianapolis, Kinetrex Energy supplies liquefied natural gas (LNG) in the US Midwest. Under long-term contracts to transportation service providers, the company also produces and supplies renewable natural gas (RNG).

Kinetrex Energy has a 50% stake in the largest RNG facility in Indiana. Besides, the company has signed commercial agreements to start construction on three more landfill-based RNG facilities.

After the three plants enter into operations in 2022, the total annual RNG production from the four sites is projected to be more than four billion cubic feet.

Aaron Johnson – Kinetrex Energy President and CEO said: “As we looked for the best partner to help grow our presence in renewable natural gas, Kinder Morgan’s Energy Transition Ventures emerged as the clear choice.

“KMI’s project management 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.”

Kinder Morgan to acquire renewable natural gas developer Kinetrex Energy. Photo courtesy of WhisperToMe/Wikipedia.org.

RNG is derived from renewable sources such as organic waste collected in landfills, agricultural operations, and wastewater treatment plants.

By collecting methane produced from the decomposition of organic waste, the RNG production process lowers or removes greenhouse gas emissions.

According to Kinder Morgan, the unique full-service platform of Kinetrex Energy gives excellent value for its customers as well as host landfills.

Jesse Arenivas – Kinder Morgan Energy Transition Ventures President said: “We have been focused on RNG due to its potential to grow rapidly in the near term and deliver attractive returns, with landfills providing a low cost, predictable and long-term feedstock.

“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.”

The deal, which is subject to regulatory approval under Hart-Scott-Rodino, is likely to be wrapped up in Q3 2021.