Williston Basin deal finalized

Kinder Morgan said its subsidiary, Hiland Partners Holdings, closed on its previously announced US$640 million acquisition of a natural gas gathering and processing system in North Dakota from Outrigger Energy II.

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.

“We are pleased to have completed this strategic acquisition and to start integrating these assets with our existing Hiland gas footprint,” said KMI Natural Gas Midstream President Tom Dender. “This acquisition expands our transportation and processing services, allowing us to meet the growing needs of our customers.”

Outrigger Energy II LLC announced today that it has completed the sale of its midstream system in the Williston Basin of North Dakota to Hiland Partners Holdings LLC, a wholly owned subsidiary of Kinder Morgan, for US$640 million. (Image: Outrigger Energy II)

KMI expects the acquisition to be immediately accretive to its shareholders, with a 2025 Adjusted EBITDA multiple of approximately 8 times on a full-year basis. Adjusted EBITDA does not include approximately $20 million of expected cash payments in 2025 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.