Kinder Morgan (KMI) has agreed to acquire Kinetrex Energy, an Indianapolis-based renewable natural gas (RNG) developer, from an affiliate of Parallel49 Equity for $310m.
Kinetrex Energy is engaged in supplying liquefied natural gas (LNG) in the US Midwest. Apart from that, the company has long-term contracts with transportation service providers for the supply of RNG.
Founded in 2013, the RNG producer was acquired by Parallel49 Equity in December 2016.
The company has a 50% stake in the Indy High BTU plant, which is claimed to be the largest RNG facility in Indiana. Located at the Indianapolis South Side Landfill, the plant converts landfill methane gas into nearly eight million gallons of pipeline-quality RNG annually.
Kinetrex Energy also has commercial agreements in place to begin construction on three more landfill-based RNG facilities.
After the commissioning of the three plants, which is expected next year, the company’s total annual RNG production will be over four billion cubic feet.
Kinetrex Energy president and CEO Aaron Johnson said: “As we looked for the best partner to help grow our presence in renewable natural gas, Kinder Morgan’s Energy Transition Ventures emerged as the clear choice.
“KMI’s project management expertise, extensive pipeline network and broad customer relationships will undoubtedly help us realise the vision we had in founding Kinetrex eight years ago: to provide holistic solutions for customers seeking to meet emission reduction targets.”
Kinder Morgan said that Kinetrex Energy’s unique full-service platform offers its customers and host landfills with outstanding value.
The midstream major said that key members of Kinetrex Energy’s management team will be joining it as part of the deal to pursue new projects for growing its RNG platform.
Kinder Morgan Energy Transition Ventures president Jesse Arenivas said: “We have been focused on RNG due to its potential to grow rapidly in the near term and deliver attractive returns, with landfills providing a low cost, predictable and long-term feedstock.
“The team at Kinetrex has developed an outstanding business model and platform for future growth in a fragmented market, and we are excited to welcome them to Kinder Morgan.”
The transaction is subject to regulatory approval under Hart-Scott-Rodino and is anticipated to close in Q3 2021.
