HOUSTON – Leading pipeline company Kinder Morgan Inc <KMI.N> will buy Hiland Partners, a pipeline and logistics company founded by Continental Resources Inc <CLR.N> Chief Executive Officer Harold Hamm, for $3 billion, the company said on Wednesday.
Hiland Partners builds and operates oil gathering and transportation pipelines and natural gas gathering and processing systems primarily in the Bakken shale oilfields in North Dakota and Montana. Hiland’s customers include Continental and Hess Corp <HES.N>.
The deal, slated to close during the first quarter of this year, will give Kinder Morgan a premier position in pipelines and logistics in the Bakken, the company said. The $3 billion includes assumption of debt at a time when falling oil prices <CLc1> <LCOc1> have pressured oil producers such as Continental.
Hiland’s assets include the new Double H 84,000 barrels-per-day pipeline that will move Bakken crude from North Dakota to Tallgrass Energy Partners’ <TEP.N> Pony Express pipeline in Wyoming. From there, Bakken flows will move to the U.S. crude futures hub in Cushing, Oklahoma via the Pony Express.
The pipeline is expected to start up by the end of January.
Kinder Morgan added that the first phase of its $382 million condensate processing facility near the Houston Ship Channel, which would run the very light crude oil through a splitter so it can be exported as refined products, should begin service in March. The company said “earnings versus our budget” were impacted by delays for the facility.
It said the second phase of the condensate processing plant would be operational this summer.
(Reporting by Kristen Hays; Writing by Terry Wade; Editing by James Dalgleish)
This article was written by Kristen Hays from Reuters and was legally licensed through the NewsCred publisher network.