Kinder Morgan, Inc. announced that its subsidiary, Hiland Partners Holdings LLC, closed on its previously announced $640 million acquisition of a natural gas gathering and processing system in North Dakota from Outrigger Energy II LLC. The acquisition includes a 270 million cubic feet per day (MMcf/d) 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 an Adjusted EBITDA multiple of approximately 8 times on a full-year basis. Adjusted EBITDA does not include approximately $20 million of expected cash payments 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.