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Kinder Morgan Energy Partners Distributes $4.98 Per Unit For 2012 – Meets Annual Budget

Stocks in this article: EPB KMI KMP KMR

The Products Pipelines segment handled 9.4 million barrels of biofuels (ethanol and biodiesel) in the fourth quarter, up 22 percent from the same period a year ago spearheaded by the August 2012 acquisition of a biofuel transload terminal in South Carolina. For the year, 34.4 million barrels of biofuels were handled, up 11 percent from 2011. This segment continues to make investments in assets across its operations to accommodate more biofuels.

The Natural Gas Pipelines business produced fourth quarter segment earnings before DD&A and certain items of $474 million, up 64 percent from $290 million for the comparable period in 2011. For the year, Natural Gas Pipelines produced $1.37 billion in segment earnings before DD&A and certain items, up 44 percent from $951 million in 2011, and well ahead of its published annual budget of 19 percent growth due to the dropdowns described below.

“Growth in the fourth quarter compared to the same period last year was driven by the TGP and EPNG dropdowns, along with the June 2012 purchase of 50 percent of certain midstream assets,” Kinder explained. “Fourth quarter earnings in this segment also benefited from good results at the Texas intrastates, our Eagle Ford assets, Kinder Morgan Treating and the Fayetteville Express Pipeline. This segment’s earnings were impacted in the fourth quarter by the November divestitures of our Rockies assets, but that impact was more than mitigated by the dropdowns.”

For the full year, growth in the segment was driven by the previously noted dropdowns and acquisition, along with good results from Kinder Morgan Treating (which benefited from the SouthTex acquisition), Fayetteville Express (which realized contracts ramping up), the Eagle Ford assets and a full year of contributions from KinderHawk.

Overall segment transport volumes were up 6 percent in the fourth quarter compared to the same period last year and up 11 percent for the full year. These increases represented higher volumes on Fayetteville Express, solid throughput on the Texas intrastates (due in part to Eagle Ford Gathering volumes, and higher industrial and Mexico demand), and higher throughput for natural gas fired power generation on TGP (up 12 percent versus 2011). Sales volumes on the Texas intrastates were up 8 percent compared to the fourth quarter last year and 9 percent for the full year compared to 2011.

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