Kinder Morgan has been under pressure from investors to reduce fossil fuel production and invest in clean energy; Kinetrex Energy operates several renewable gas facilities in America and has 4 facilities ready for operations by 2022
Kinder Morgan, an operator of oil and gas pipelines in America has announced that it will buy Kinetrex Energy, a renewable gas developer for over €260 million. The buyout will be facilitated by a subsidiary of Parallel49 Equity. The decision comes after Kinder Morgan began facing intense pressure from its investors to focus on low-carbon energy initiatives. The purchase will enable Kinder Morgan to expand its operations into green energy and transitioning into sustainable modes of production.
Kinetrex Energy is a major supplier of liquefied natural gas to the Midwest in America. The company has a major investment in the largest renewable natural gas facility in Indiana – it owns 50% stake in the project. In addition to this facility, Kinetrex Energy has invested in other projects to develop and supply renewable natural gas.
The company has secured commercial agreements for three more renewable natural gas facilities which will be based on landfills in the vicinity. Renewable natural gas achieves many green energy objectives. It is produced from biodegradable waste material generated by humans in a wide variety of contexts. This waste could be food waste, garden and lawn waste and also carbon-based waste such as paper, cardboard and wood.
Construction of all three facilities is expected to be complete by 2022. Once all the facilities are operational (including the largest one in Indiana), they will produce over 4 billion cubic feet of renewable natural gas every year. Assuming these timelines are met, Kinetrex Energy will prove to be a fruitful acquisition for Kinder Morgan. Investors have been pushing Kinder Morgan to not only seriously consider lowering the production of fossil fuels but also invest in green energy, both objectives which can be met by Kinetrex Energy’s facilities.