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Kinder Morgan Energy Partners Increases Quarterly Distribution To $1.20 Per Unit

Stocks in this article: KMI KMP KMR

The Products Pipelines segment handled 7.3 million barrels of ethanol in the first quarter, flat with the same period a year ago. Additionally, this segment once again realized significant growth in biodiesel barrels stored and blended and continues to make various asset investments across its operations to accommodate more biofuels.

The Natural Gas Pipelines business produced first quarter segment earnings before DD&A and certain items of $279 million, up 25 percent from $223 million for the comparable period in 2011, and is currently expected to finish the year slightly below its published annual budget of 19 percent growth.

“Growth in the first quarter compared to the same period last year was driven by our purchase of Petrohawk’s 50 percent interest in KinderHawk (effective July 1, 2011), improved earnings at the Fayetteville Express Pipeline (while full service began Jan. 1, 2011, contracts were still ramping up in the first quarter last year) and good results at Kinder Morgan Treating, which benefited from the SouthTex acquisition in December of 2011 and subsequent strong plant sales,” Kinder said. The Texas intrastate pipeline system was impacted by lower sales margins, most of which was offset by strong transport volumes and higher storage revenues.

Overall segment transport volumes were up 4 percent in the first quarter versus the same period last year attributable to higher volumes on Fayetteville Express and solid transport volumes on the Texas intrastate pipeline system, due in part to Eagle Ford Gathering volumes. Sales volumes on the Texas intrastates were up 11 percent compared to the first quarter of 2011.

The CO 2 business produced first quarter segment earnings before DD&A and certain items of $337 million, up 31 percent from $258 million for the same period in 2011, and given current oil prices, is on track to meet its published annual budget of 26 percent growth.

“Growth in the first quarter compared to the same period last year was attributable primarily to higher oil prices, increased production at the Katz Field and higher NGL sales volumes,” Kinder said. “CO 2 production was basically flat compared to the first quarter of 2011, but as we have previously noted, strong demand for CO 2 is creating significant expansion opportunities for us as is detailed in the other news section of this release.”

The Snyder Gasoline Plant set a third consecutive quarterly NGL production record, producing gross volumes of 17.6 thousand barrels per day (MBbl/d), up almost 9 percent from 16.2 MBbl/d for the first quarter of 2011. February was also a record month at the facility, with NGL production of 18.4 MBbl/d.

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