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Kinder Morgan Inc. (KMI), an energy services company based in Houston, recently announced the completion of its acquisition of North American Natural Resources Inc. (NANR), Ann Arbor, Michigan and its sister companies, North American Biofuels and North American-Central. The $135 million acquisition in the combined purchase price and related transaction costs includes seven landfill gas-to-power facilities in Michigan and Kentucky.
“We are excited to continue KMI’s commitment to growing our RNG business through the acquisition of NANR’s facilities and expertise,” says Anthony Ashley, president of Energy Transition Ventures. “We believe this further positions us as a leader in the RNG marketplace and look forward to expanding our RNG footprint to benefit the customers, businesses and communities we serve.”
According to a news release from KMI, the company will make a final investment decision (FID) on the conversion of up to four of the seven gas-to-power facilities to renewable natural gas (RNG) facilities with a capital spend of approximately $175 million. Pending FID, these facilities are expected to be in service by early 2024. Once complete, the facilities are expected to generate about 2 billion cubic feet per year of RNG.
The company says this acquisition and the additional investments discussed above, combined with the recent Kinetrex Energy and Mas CanAm acquisitions, will enhance the company’s vertically integrated platform that delivers differentiated solutions across the RNG value chain. The combined RNG operations will provide KMI with an annual RNG generation capacity of about 7.7 billion cubic feet annually once the RNG facilities are in service. The company says the remaining three NANR assets, projected to produce 4.8 megawatt-hours in 2023, will further diversify KMI’s renewable portfolio by adding electricity generation to its landfill gas-to-power operations.
“We are proud of the business NANR’s employees have built over the past 43 years,” says NANR President Bob Evans. “With the evolution of energy markets, we are excited to join the KMI family as the world transitions to a cleaner energy future.”
KMI expects the investment to be accretive to its shareholders as the four converted RNG facilities become operational over the next 18 months, with the purchase price and additional development capital expenditures representing less than six times the expected 2024 earnings before interest, taxation and amortization.