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Kinder Morgan Buys RNG Specialist

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Kinder Morgan has inked a deal to acquire Indianapolis-based Kinetrex Energy, a supplier of LNG in the Midwest and a rapidly growing player in producing and supplying RNG under long-term contracts to transport service providers.

Kinetrex has a 50% interest in the largest RNG facility in Indiana as well as signed commercial agreements to begin construction on three additional landfill-based RNG facilities. Once operational next year, total annual RNG production from the four sites is estimated to be over four bcf.

“This is a great day in the young history of Kinder Morgan Energy Transition Ventures (ETV),” said ETV president Jesse Arenivas. “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.”

Key members of Kinetrex’s management team will be joining KMI as part of the acquisition to pursue new projects that expand their successful RNG platform. After close, Kinetrex president and CEO Aaron Johnson will continue with KMI as president of Renewable Natural Gas and will report to Arenivas. Since its inception in 2013, Kinetrex has been committed to developing solutions that lower the cost of business while maintaining a focus on environmental stewardship. This acquisition will stay true to that focus.

KMI expects the investment to be accretive to its shareholders as the three RNG facilities become operational over the next 18 months, with the purchase price and additional development capital expenditures representing less than six times expected 2023 EBITDA.

Kinder Morgan paid an undisclosed amount to an affiliate of Parallel49 Equity, a specialist investor in manufacturing firms.

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