Kinder Morgan to buy gas gathering, processing system in North Dakota for $640M

Kinder Morgan (KMI) announced that its subsidiary, Hiland Partners, has agreed to purchase a natural gas gathering and processing system in North Dakota from Outrigger Energy II for $640M. The acquisition includes a 270M cubic feet per day processing facility and a 104-mile, large-diameter, high-pressure rich gas gathering header pipeline with 350 MMcf/d 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. KMI expects the acquisition to be immediately accretive to its shareholders, with a 2025 adjusted EBITDA multiple of approximately eight times on a full-year basis. Adjusted EBITDA does not include approximately $20M 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.