Kinder Morgan & TrailStone sign joint Mexico venture

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Earlier this week, Kinder Morgan announced it signed a joint venture with TrailStone to start a natural gas marketing company in Mexico.

The joint venture between Kinder Morgan and TrailStone will combine North American gas supply and transportation to provide competitively priced gas supply to industrial markets and power generators in the Monterrey area and other markets.

“The marketing company will provide a convenient and efficient option for end-users in the Monterrey area and other regions of Mexico to benefit from low-cost U.S. natural gas under the new open access regulations that will become effective in Mexico in 2016,” said Larry Bell, Kinder Morgan Natural Gas Midstream Vice President of Marketing and Transportation.

Kinder Morgan, the largest energy infrastructure in North America, is invested in 84,000 miles of pipelines and 165 terminals. The corporation’s large intrastate system will be able to offer transportation, storage, and gas supply service to the joint venture. This will allow the company to increase its utilization of its existing assets according to Bell.

The energy-focused private equity shop TrailStone, known for its trading and logistics services believes the joint venture will help develop the company’s platform.

“This JV is a significant building block in the expansion of TrailStone’s physical commodity trading and logistics platform,” said TrailStone CEO David Silbert. “We are excited to further develop our strategic relationship with Kinder Morgan, which is one of the most prominent and proven energy companies in North America.”

The marketing company is part of Kinder Morgan’s plan to expand its major pipeline, the Mier-Monterrey, located in Mexico. Since the major route has been in service the company has nearly doubled its capacity. Kinder Morgan is preparing to expand the line to produce 1.3 billion cubic units per day which would make it the largest natural gas route between the U.S. and Mexico. The project has already attracted potential investors.

“We received interest in our binding open season from numerous industrial and power generation consumers and plan to move forward with the project as commitments are obtained,” said Duane Kokinda President of Kinder Morgan’s Natural Gas Midstream.
The joint venture is expected to be effective by the first quarter of 2016.

Article written by HEI contributor Aliyah Cole.

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