Kinder Morgan closed on the acquisition of North American Natural Resources Inc. (NANR) and its sister companies, North American Biofuels LLC and North American-Central LLC. The US$135 million acquisition in combined purchase price and related transaction costs includes seven landfill gas-to-power facilities in Michigan and Kentucky. Shortly following close, Kinder Morgan will make a final investment decision (FID) on the conversion of up to four of the seven gas-to-power facilities to renewable natural gas (RNG) facilities with a capital spend of approximately US$175 million. Pending FID, these facilities are expected to be in service by early 2024. Once complete, the facilities are expected to generate approximately 2 Bscf (56.6 × 106 m3) per year of RNG. This acquisition and the additional investments discussed above, combined with the recent should enhance the company’s vertically integrated platform that delivers differentiated solutions across the RNG value chain. The combined RNG operations will provide Kinder Morgan with annual RNG generation capacity of approximately 7.7 Bscf (218 × 106 m3) per year once all of the RNG facilities are in service. The remaining three NANR assets, projected to produce 4.8 MW-hours in 2023, will further diversify Kinder Morgan’s renewable portfolio by adding electricity generation to its landfill gas-to-power operations.
Kinder Morgan expects the investment to be accretive to its shareholders as the four converted RNG facilities become operational over the next 18 months, with the purchase price and additional development capital expenditures representing less than six times the expected 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA).
