Outrigger Energy II has finalised the sale of its Williston Basin midstream system in North Dakota, US, to Hiland Partners, a subsidiary of Kinder Morgan, in a deal valued at $640m.
The deal, which was announced last month, comprises a 270 million cubic feet per day cryogenic gas processing plant, approximately 167km of high-pressure gathering pipelines, and 6,720hp of field compression.
Go deeper with GlobalData
Spanning Williams and Mountrail counties, the system is supported by long-term, fee-based contracts with several operators in the region.
These contracts include minimum volume commitments.
Kinder Morgan natural gas midstream president Tom Dender said: “We are pleased to have completed this strategic acquisition and to start integrating these assets with our existing Hiland gas footprint.
“This acquisition expands our transportation and processing services, allowing us to meet the growing needs of our customers.”
The acquisition is expected to be beneficial for Kinder Morgan’s shareholders, with a projected 2025 adjusted earnings before interest, taxes, depreciation, and amortisation multiple of around eight times.
This figure excludes an anticipated $20m in cash payments for 2025 that are subject to deferred revenue recognition.
Additionally, Kinder Morgan anticipates that the integration of this system will lead to reduced capital expenditure requirements for supporting the growth of its existing Bakken customers.
Outrigger’s president and CEO Dave Keanini stated: “The significant midstream system we developed, which includes the largest single-train cryogenic processing facility in North Dakota, is a career highlight. We are very proud of the exceptional results delivered by our team, particularly against the challenge of the Covid-19 pandemic during the construction phase.
“We appreciate the strong relationships we built with our customers and are confident that Kinder Morgan’s extensive presence and expertise in the basin will provide substantial synergies with the Outrigger system to benefit area operators.”
This development comes after Kinder Morgan’s $100m asset acquisition in West Texas in May 2024 and its subsidiary Tennessee Gas Pipeline formally approving the MSX Project in December 2024.
