Kinder Morgan gets Partner in the Utopia Pipeline Project, Sells 50% Equity to Riverstone

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Kinder Morgan gets Partner in the Utopia Pipeline Project, Sells 50% Equity to Riverstone

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Utopia Pipeline Project Route (© Kinder Morgan
Utopia Pipeline Project Route (© Kinder Morgan

On June 28, Kinder Morgan, Inc. made a formal announcement that they are selling 50% equity interest of the Utopia pipeline project to the Riverstone Investment Group (LLC). To acquire the rights to become a partner of the project, Riverstone has to make an upfront cash payment to Kinder Morgan. This upfront cash payment includes 50% share reimbursement of its previous capital expenditure on the project. Riverstone also has to fund its share in the capital expenditure that will take place in the future for the pipeline commissioning and completion of the construction.

The shares of Kinder Morgan rose 2.6% to $17.86 next morning following the news of the partnership. The estimated cost of the new 215-mile, 12-inch diameter Utopia east pipeline project that will stretch from Harrison County to Fulton County is $500 million. The estimated daily capacity of the project is 50,000 barrels. The project will connect the existing infrastructure of Kinder Morgan that transports mixtures of ethane-propane and ethane to Ontario.

The Utopia pipeline project is expected to operate from early 2018.

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