Kinder Morgan is set to acquire the South Texas assets of NextEra Energy Partners, known as STX Midstream, for a total of $1.815 billion. This acquisition includes a comprehensive pipeline system, primarily consisting of large, high-pressure natural gas pipelines. These pipelines are strategically positioned, connecting the Eagle Ford basin to significant demand areas in Mexico and the Gulf Coast. A key component of STX Midstream is its 90% stake in the NET Mexico pipeline, with the remaining 10% owned by MGI Enterprises, an affiliate of PEMEX. Additionally, STX Midstream operates the Eagle Ford Midstream, a 158-mile pipeline that links the Eagle Ford basin to the Agua Dulce Hub in Nueces County, Texas. This pipeline is interconnected with several major systems, including Kinder Morgan’s own Tennessee Gas Pipeline, Kinder Morgan Tejas Pipeline, and the Natural Gas Pipeline Company of America.
STX Midstream also holds a 50% interest in Dos Caminos LLC, a joint venture with Howard Energy Partners (HEP), who manages the operation and owns the other half. Dos Caminos recently launched a 62-mile pipeline, bridging HEP’s existing midstream infrastructure in Webb County, Texas, to Kinder Morgan’s newly operational Eagle Ford pipeline. The portfolio of assets involved in this deal is notable for its long-term stability, featuring an average contract duration of over 8 years. A significant portion, approximately 75%, of the business is underpinned by take-or-pay contracts, ensuring a steady revenue stream.