Kinder Morgan Canada Limited Prices C$1.75
billion Initial Public Offering
Kinder Morgan, Inc., (NYSE: KMI), today announced a final
investment decision for the Trans Mountain Expansion Project in
conjunction with its indirect subsidiary, Kinder Morgan Canada
Limited (KML), pricing its initial public offering (the Offering)
of 102.9 million shares of common stock at a price to the public of
C$17.00 per share for total gross proceeds of C$1.75 billion. The
final investment decision is conditioned on the successful
completion of the IPO, which is expected to take place by not later
than May 31, 2017.
“Upon the completion of the IPO, we will have secured
satisfactory financing for the Trans Mountain Expansion Project. We
are excited to be moving forward on this tremendous project which
is expected to benefit KMI and KML as well as our Trans Mountain
shippers and Canada,” said Steve Kean, Kinder Morgan chief
executive officer. “The KML IPO is one of the largest ever in
Canada and provides Canadian investors the opportunity to invest in
a leading integrated midstream set of western Canadian assets. We
are very pleased to price the Offering and excited about the future
growth opportunities that this platform enables. The Offering also
strengthens KMI’s balance sheet and strengthens our ability to
return value to shareholders.”
“Our execution planning is complete, our approvals are in hand,
and we are now ready to commence construction activities this fall
generating thousands of direct jobs for Canadians, including
significant benefits to Indigenous communities in Alberta and
British Columbia,” said Ian Anderson, president of Kinder Morgan
Canada Limited.
The Trans Mountain Expansion Project is a C$7.4 billion project
(with a remaining cash spend of C$6.2 billion as of March 31, 2017)
which upon completion will provide western Canadian oil producers
with an additional approximately 590,000 barrels per day (resulting
in total pipeline capacity of 890,000 barrels per day) of shipping
capacity and tidewater access to the western United States and
global markets. The project is underpinned by 15- and 20-year
shipper commitments of 707,500 barrels per day, or roughly 80
percent of the capacity on the expanded pipeline, with the other 20
percent reserved for spot volumes as required by the National
Energy Board. Construction on the project is expected to begin in
September 2017 with completion expected in December 2019.
The final investment decision was contingent on securing
financing. While the political climate was not ideal, the process
proceeded at this time because the Trans Mountain Expansion Project
financing contingency period, as specified in shipper agreements,
concludes at the end of May.
The Offering constitutes a sale of a portion of KMI’s interest
in the Canadian business of KMI (the Business). The Business is
composed of: the Trans Mountain pipeline system (including related
terminals assets), the Puget Sound pipeline, the Jet Fuel pipeline
system, the Canadian portion of the Cochin pipeline system, the
Vancouver Wharves Terminal and the North 40 Terminal; as well as
three jointly controlled investments: the Edmonton Rail Terminal,
the Alberta Crude Terminal and the Base Line Terminal.
KMI will use the proceeds it receives to pay down debt. As a
result, KMI now expects to end the year at approximately 5.2X debt
to EBITDA versus its budget of 5.4X and remains on track to
announce revised dividend guidance for 2018 in the latter part of
this year, consistent with the previously announced goal of
returning additional value to shareholders. Upon closing of the
Offering, KMI will own an approximately 70 percent interest in the
Business, which will be operated and administered by KML and its
affiliates.
An amended and restated preliminary prospectus of KML
containing important information relating to these securities has
been filed with the securities commissions or similar authorities
in each province and territory of Canada. The amended and restated
prospectus of KML is still subject to completion or amendment.
Copies of the amended and restated prospectus of KML are
available on SEDAR at http://www.sedar.com or from the
underwriters named in it. There will not be any sale or any
acceptance of any offer to buy the securities until a receipt for
the final prospectus has been issued.
The securities of KML have not been and will not be registered
under the United States Securities Act of 1933 (the Securities Act)
or the securities laws of any state or other jurisdiction of the
United States. Accordingly, these securities may not be offered or
sold in the United States absent registration under the Securities
Act or an exemption from registration, and in each case in
compliance with the applicable securities laws of any state or
other jurisdiction of the United States. In particular, this press
release is not an offer of securities for sale in the United
States.
About Kinder Morgan, Inc. (KMI)
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. It owns an interest in
or operates approximately 84,000 miles of pipelines and 155
terminals. KMI’s pipelines transport natural gas, refined petroleum
products, crude oil, condensate, CO2 and other products, and its
terminals transload and store petroleum products, ethanol and
chemicals, and handle such products as steel, coal and petroleum
coke. It is also a leading producer of CO2 that we and others use
for enhanced oil recovery projects primarily in the Permian basin.
For more information please visit www.kindermorgan.com.
About Kinder Morgan Canada Limited (KML)
Kinder Morgan Canada Limited will operate the Business,
comprised of a number of pipeline systems and terminal facilities
including the Trans Mountain pipeline, the Cochin pipeline, the
Puget Sound and Trans Mountain Jet Fuel pipelines, the Westridge
marine and Vancouver Wharves terminals in British Columbia as well
as various crude oil loading facilities in Edmonton, Alberta.
The Trans Mountain pipeline currently transports approximately
300,000 barrels per day (bpd) of crude oil and refined petroleum
products from the oil sands in Alberta to Vancouver, British
Columbia and Washington state. On Nov. 29, 2016, the Government of
Canada granted approval for the $7.4 billion Trans Mountain
Expansion Project, to increase the nominal capacity of the system
to 890,000 bpd. The expanded pipeline is expected to be completed
in 2019.
Important Information Relating to
Forward-Looking Statements
In the interests of providing potential investors with
information regarding KMI and KML, including management's
assessment of KMI's and KML's future plans for the Business,
certain statements contained in this news release are
forward-looking statements or information within the meaning of
applicable securities legislation, collectively referred to herein
as "forward-looking statements." Forward-looking statements in this
news release include, but are not limited to: the expected future
activities of KML following closing of the Offering, KMI's expected
ownership level in KML following closing of the Offering,
expectations that applicable regulatory approvals will be obtained,
the success of the Offering, and expected timing of closing of the
Offering. Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the
plans, intentions or expectations upon which they are based will
occur.
By their nature, forward-looking statements involve numerous
assumptions, known and unknown risks and uncertainties, both
general and specific, that contribute to the possibility that the
predictions, forecasts, projections and other forward-looking
statements will not occur, which may cause the Business' actual
performance and financial results in future periods to differ
materially from any estimates or projections of future performance
or results expressed or implied by such forward-looking statements.
There can be no assurance that KML will ultimately complete the
Offering, the size of the retained interest that KMI would hold
initially or in the future in KML, and other arrangements that
would exist between KMI and KML. Closing of the Offering is subject
to a number of risks and uncertainties, including without
limitation, those relating to due diligence, favourable market
conditions, stock exchange and regulatory approvals, and approval
by KMI's and KML's boards of directors. Although KMI believes that
the expectations represented by such forward-looking statements are
reasonable, there can be no assurance that such expectations will
prove to be correct. Potential investors are cautioned that the
foregoing list of important factors is not exhaustive. In addition,
assumptions relating to such forward-looking statements generally
include KMI's current expectations and projections made in light
of, and generally consistent with, its historical experience and
its perception of historical trends, all of which are subject to
the risk factors identified elsewhere in this news release or in
the preliminary prospectus, including assumptions related to
receipt of all required regulatory approvals and completion of the
Offering. Furthermore, the forward-looking statements contained in
this news release are made as of the date hereof and, except as
required by law, KMI and KML undertake no obligation to update
publicly or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. The
forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
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version on businesswire.com: http://www.businesswire.com/news/home/20170525006162/en/
Kinder Morgan, Inc.Media RelationsDave Conover,
(713) 369-9407dave_conover@kindermorgan.comorInvestor
Relations(713)
369-9490km_ir@kindermorgan.comwww.kindermorgan.com
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