Trans Mountain Pipeline System Project to Be Sold for C$4.5B

Source: www.gulfoilandgas.com 5/29/2018, Location: North America

Kinder Morgan, Inc. (KMI) announced that the Kinder Morgan Canada Limited (KML) board of directors has agreed to the purchase of the Trans Mountain Pipeline system and the expansion project (TMEP) by the Government of Canada for C$4.5 billion, and has agreed to work with the Government of Canada to seek a third party buyer for the Trans Mountain Pipeline system and TMEP through July 22, 2018.

As part of the agreement, the Government has agreed to fund the resumption of TMEP planning and construction work by guaranteeing TMEP’s advances under a separate Federal Government recourse credit facility until the transaction closes. The parties expect to close the transaction late in the third quarter or early in the fourth quarter of 2018, subject to KML shareholder and applicable regulatory approvals.

“We are pleased that KML and the Government were able to reach agreement on a transaction that benefits the people of Canada, TMEP shippers and both KMI and KML shareholders,” said KMI Chief Executive Officer, and KML Chairman and CEO, Steve Kean. “The outcome reached represents the best opportunity to complete TMEP and thereby realize the great economic benefits promised by that project.

“For KMI, despite losing the EBITDA associated with the Trans Mountain system, we still expect to meet or exceed our 2018 distributable cash flow (DCF) per share target. The transaction will also have a positive impact on our consolidated balance sheet, as we expect KMI’s approximately 70 percent share of after tax proceeds to be approximately US$2.0 billion. Additionally, we continue to expect a 2018 annualized dividend of $0.80 per share, followed by $1.00 per share in 2019 and $1.25 per share in 2020, a growth rate of 25 percent annually,” said Kean. “We will provide additional financial guidance after the transaction closes.

“With respect to future growth, we are confident that KMI will continue to find investment opportunities across its unparalleled network of midstream assets. Since mid-2015, we have added on average approximately $1.3 billion per year to our backlog,” continued Kean.

“During the last twelve months, we have added approximately $2.1 billion. Assuming that KMI can invest $2.0 billion per year at an average capital-to-Adjusted EBITDA multiple of approximately 7.0 times (versus the on-average 6.0 times for our backlog as of the first quarter of this year) those investments would yield KMI incremental annual EBITDA of over $300 million, representing greater than 4 percent annual EBITDA growth,” Kean concluded.

KMI does not provide forecasted net income (the GAAP financial measure most directly comparable to the non-GAPP financial measures DCF and Adjusted EBITDA) due to the impracticality of quantifying certain amounts required by GAAP, such as realized and unrealized foreign currency gains and losses and potential changes in estimates for certain contingent liabilities.


Russia >>  5/25/2022 - On 27 February 2022, Equinor decided to start the process of exiting the company’s Joint Ventures in Russia.

...

Russia >>  5/25/2022 - Shell Overseas Investments B.V. and B.V. Dordtsche Petroleum Maatschappij, subsidiaries of Shell plc, have completed the sale of Shell Neft LLC, Shell...

United Kingdom >>  5/24/2022 - Reabold, the AIM quoted investing company, which focuses on investments in upstream oil and gas projects, is pleased to provide additional details on ...
United Kingdom >>  5/24/2022 - Angus Energy has executed a share purchase agreement ('SPA') to acquire the entire issued share capital of the Company's current joint venture partner...

Brazil >>  5/23/2022 - Karoon Energy Ltd has provided notice to Enauta Energia S.A. to terminate the Exclusivity Agreement entered into to undertake due diligence and negoti...
Nigeria >>  5/23/2022 - With reference to the stock exchange announcement made 27 January 2022, and the update provided 2 May 2022, regarding the government consent provided ...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


Gulf Oil and Gas
Copyright © 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.