Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced it will invest approximately $671 million to grow its carbon dioxide (CO 2) infrastructure in southwestern Colorado and New Mexico. The company plans to expand its CO 2 production operations in the Cow Canyon area of the McElmo Dome source field in Montezuma County, Colo., and expand the approximately 500-mile Cortez Pipeline that transports CO 2 from southwestern Colorado to eastern New Mexico and West Texas for use in enhanced oil recovery (EOR) projects.
“These projects are designed to help address the market’s growing demand for CO 2 and enable companies, including Kinder Morgan, to increase incremental oil production by using CO 2 in EOR projects,” said James Wuerth, president of KMP’s CO 2 group. “Kinder Morgan is a leading CO 2 supplier and transporter, and we look forward to growing our CO 2 network.” These investments are in addition to KMP’s recently announced initiative to invest approximately $1 billion to develop the St. Johns source field in Apache County, Ariz., and build a new, 214-mile pipeline to transport CO 2 from St. Johns to the Cortez Pipeline in Torrance County, N.M.
Capital expenditures for the Cow Canyon development are estimated at approximately $344 million and will increase CO 2 production in the McElmo Dome source field by 200 million cubic feet per day (MMcf/d). The plan includes on-going 3-D seismic acquisition, 16 new wells, activation of one production well and one produced water disposal well, water separation facilities, one central compressor station, and associated gathering and produced water disposal pipelines. Pending regulatory approvals, the company anticipates that 100 MMcf/d of CO 2 from the Cow Canyon development will come online by July 2015, with the remaining 100 MMcf/d expected to be in service by the end of 2015.
Capital expenditures for the Cortez Pipeline expansion are estimated at approximately $327 million and will increase the pipeline’s capacity from 1.35 billion cubic feet per day (Bcf/d) to 2 Bcf/d by adding a 64-mile loop in New Mexico and three new pump stations, one in Colorado and two in New Mexico; and modifying five existing pump stations, one in Colorado, three in New Mexico, and one in Texas. This expansion will accommodate the increased CO 2 supply from the McElmo Dome field, the recently announced St. Johns source field, and other sources in southwestern Colorado. Kinder Morgan owns a 50 percent interest in and operates the Cortez Pipeline. Pending regulatory approvals, the northern portion of the Cortez Pipeline expansion is expected to be completed by July 2015 to handle the additional volumes from Cow Canyon, while the southern portion is expected to be complete by mid 2016 to handle the additional 300 MMcf/d of CO 2 expected from the company’s St. Johns CO 2 source field.Kinder Morgan Energy Partners, L.P. (NYSE: 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 more than 54,000 miles of pipelines and 180 terminals. 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 $100 billion. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO 2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. KMI owns the general partner interests of KMP and El Paso Pipeline Partners, L.P. (NYSE: EPB), along with limited partner interests in KMP, Kinder Morgan Management, LLC (NYSE: KMR) and EPB. For more information please visit www.kindermorgan.com. This news release includes forward-looking statements. These forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although Kinder Morgan believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include those enumerated in Kinder Morgan’s reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, Kinder Morgan undertakes no obligation to update or review any forward-looking statement because of new information, future events or other factors. Because of these uncertainties, readers should not place undue reliance on these forward-looking statements.
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