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Must-know: An introduction to Kinder Morgan and its business

Avik Chowdhury

Kinder Morgan's favorable 1Q14 earnings: Key takeaways (Part 1 of 1)

Kinder Morgan’s earnings report

On April 16, 2014, Kinder Morgan presented its earnings for the first quarter of 2014. Kinder Morgan Energy Partners (KMP) is one of the largest master limited partnerships operating in the midstream energy space. Kinder Morgan Energy Partners (KMP) is a master limited partnership that operates as a pipeline transportation and energy storage company in North America. As of March 31, 2014, KMP owns an interest in or operates approximately 52,000 miles of pipelines and 180 terminals. Its delivers gasoline, diesel fuel, jet fuel, and natural gas liquids to various markets; gathers, transports, stores, treats, processes, and sells natural gas; produces, markets, and transports carbon dioxide to oil fields; transloads, stores, and delivers petroleum, petrochemical, and other liquids products; and transports crude oil and refined petroleum products from Canada to various parts of the U.S.

KMP is one of the largest independent transporters of petroleum products in the U.S., transporting about 1.9 million barrels of product per day.

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KMP has five reportable business segments. Its Products Pipelines segment delivers gasoline, diesel fuel, jet fuel, and natural gas liquids to various markets through approximately 8,600 miles of refined petroleum products pipelines. The company’s Natural Gas Pipelines segment gathers, transports, stores, treats, processes, and sells natural gas through approximately 33,000 miles of pipeline. Its CO2 segment produces, markets, and transports carbon dioxide through approximately 1,500 miles of pipelines to oil fields. This segment also owns and operates seven oil fields. The company’s Terminals segment transloads, stores and delivers bulk, petroleum, petrochemical, and other liquids products. Its Kinder Morgan Canada segment transports crude oil and refined petroleum products through approximately 2,500 miles of pipelines.

Kinder Morgan, Inc. (KMI) owns the general partner and limited partner interests in KMP and El Paso Pipeline (EPB). KMI completed a ~$38 billion acquisition of El Paso Corporation (EPB) in May 2012. Energy Partners (KMP) is one of the largest master limited partnerships operating in the midstream energy space. Other major companies operating in the same sector as KMP include Targa Resource Partners (NGLS), Regency Energy Partners (RGP), Plains All American Pipeline (PAA), and Energy Products Partners (EPD). All of these companies are components of the Alerian MLP ETF (AMLP). KMP is part of the Alerian MLP ETF (AMLP), as well as the MLPA ETF (MLPA). KMI is part of the MLPX ETF (MLPX).

In the next part, we will discuss the 1Q14 earnings, and also, the key trends we have noticed in KMP.