Kinder Morgan picks IPO route to fund Trans Mountain Expansion
Houston-based Kinder Morgan has filed for an initial public offering (IPO) of its Canadian subsidiary, Kinder Morgan Canada. The company had hoped to find a joint-venture partner to help fund 50% of its Trans Mountain expansion but now says spinning off its Canadian subsidiary provides the "best opportunity for obtaining acceptable financing terms for the project."
Besides the Trans Mountain Pipeline, Kinder Morgan Canada includes:
- the Puget Sound pipeline, which transports approximately 180,000 bbl/day of products from the Trans Mountain line into the Anacortes, Cherry Point and Ferndale refineries located in Washington State
- the Jet Fuel pipeline system, which transports 45,000 bbl/day of jet fuel from the Burnaby Refinery and Westridge terminal to the Vancouver Airport
- the Canadian portion of the Cochin pipeline system, which transports about 95,000 bbl/day of condensate from Illinois to Fort Saskatchewan, Alberta
- the North 40 Terminal in Sherwood Park which includes 2.1 million barrels of storage capacity
- the Vancouver Wharves bulk materials terminal
- the Edmonton South Rail Terminal, owned jointly with Imperial Oil
- the Alberta Crude Terminal, another rail loading terminal owned jointly with Keyera
- the Base Line Terminal, a 4.8 million barrel crude oil storage terminal located in Sherwood Park, also owned jointly with Keyera.
The Trans Mountain pipeline currently transports 300,000 bbl/day of crude oil and refined petroleum products from the Edmonton area to Vancouver, BC and Washington State. The system has received all regulatory approvals to expand capacity to 890,000 bbl/day for an estimated cost of $7.4 billion.
If all goes according to plan, the expansion is expected to be completed sometime in 2019. Timing of the IPO was not disclosed.