KMI, TrailStone Form Mexican Gas Marketing Company

January 2016, Vol. 243, No. 1

A subsidiary of Kinder Morgan signed a joint venture letter of intent with a subsidiary of the TrailStone Group to form a Mexican natural gas marketing company.

The JV between KMI and TrailStone subsidiaries 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 to other markets that can be accessed via the national system of gas pipelines to be owned and operated by CENAGAS.

The JV will be managed and operated by TrailStone and, subject to regulatory approvals, expects to be operational by the first quarter of 2016. The companies involved in the JV are pursuing and engaged in conversations with U.S. producers and end-users in Monterrey and customers connected to the Mexican national grid. The JV will provide these customers with a bundled natural gas supply package that can include Henry Hub or Houston Ship Channel-based pricing alternatives as well as swing and storage services.

Pending execution of the formal JV agreement and commitments to sell gas through the Mexican marketing company, Kinder Morgan will commence its Mier-Monterrey expansion, which will consist of adding compression and/or looping KMI’s existing Mier-Monterrey pipeline system from the Mexico-U.S. border to Huinalá, Nuevo León, Mexico. The expansion can be completed by the fourth quarter of 2017 and will provide up to 200,000 Mcf/d of incremental capacity into the Monterrey area.

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