Kinder Morgan Energy Partners LP (NYSE: KMP) said June 10 that it is initiating a new business of owning, leasing and acquiring natural resource reserves within its Terminals business segment to pursue non-operating investments in coal and other mineral reserve properties and infrastructure.
Richard Whiting, a senior executive with more than 35 years of experience in the coal industry at coal producing companies like Patriot Coal and Peabody Energy, has joined KMP as President of Kinder Morgan Resources LLC, which will own mineral reserve properties and other assets in North America. KMP said it will not actively engage in the mining of coal or other natural resources, but will lease properties it acquires to various operators in exchange for royalty payments. The lessees of the properties will manage any commodity price risk associated with the operations, not KMP.
This move would put Kinder Morgan in direct competition with a number of privately-held coal reserve companies, and also publicly-traded Natural Resource Partners LP.
John Schlosser, president of KMP’s Terminals business, said: “This new business platform will enable us to increase the services we offer to our valued coal industry customers, as well as other extractive industry participants. We currently have over $450 million in coal terminals expansion projects underway at KMP and we are pursuing additional opportunities. Rick Whiting has extensive commercial and operating experience, and is highly regarded in the coal industry, and we are delighted he has joined KMP to oversee our new endeavor—Kinder Morgan Resources.”
KMP is a leading pipeline transportation and energy storage company and one of the largest publicly traded pipeline limited partnerships in America. It owns an interest in or operates approximately 51,000 miles of pipelines and 180 terminals, many of which transload coal from rail-to-barge or rail-to-ship. The general partner of KMP is owned by Kinder Morgan Inc. (NYSE: KMI). Kinder Morgan is the largest midstream and the third largest energy company in North America with a combined enterprise value of approximately $115 billion. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals.
KMI owns the general partner interests of KMP and El Paso Pipeline Partners LP (NYSE: EPB), along with limited partner interests in KMP, Kinder Morgan Management LLC (NYSE: KMR) and EPB.