Kinder Morgan Inc. has agreed to acquire Indianapolis-based Kinetrex Energy, a supplier of liquefied natural gas (LNG) in the Midwest United States and a growing player in producing and supplying renewable natural gas (RNG) under long-term contracts to transportation service providers.
The US$310 million deal includes two small-scale LNG production and fueling facilities, a 50% interest in a landfill RNG facility, and three additional RNG facilities with signed commercial arrangements.
Kinetrex has a 50% interest in the largest RNG facility in Indiana, the Indy High BTU plant at the Indianapolis South Side Landfill, 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 more than 4 Bcf (113 x 106 m3).
“Kinder Morgan has 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,” said Jesse Arenivas, president of Kinder Morgan Energy Transition Ventures. “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 Kinder Morgan as part of the acquisition to pursue new projects that expand their RNG platform. After close, Kinetrex President and Chief Executive Officer Aaron Johnson will continue with Kinder Morgan as president of Renewable Natural Gas and will report to Arenivas.
“As we looked for the best partner to help grow our presence in RNG, Kinder Morgan’s Energy Transition Ventures emerged as the clear choice,” said Johnson. “Kinder Morgan’s project management expertise, extensive pipeline network, and broad customer relationships will undoubtedly help us realize the vision we had in founding Kinetrex eight years ago: to provide holistic solutions for customers seeking to meet emissions reductions targets.”