Kinder Morgan has acquired nearly 12,000 acres in Texas for oil and gas operations, driven by the U.S. Inflation Reduction Act’s carbon capture incentives. The $60 per metric ton tax credit for carbon sequestration makes older fields financially appealing. Kinder Morgan, partnering with Avad Energy Partners, aims to enhance production via CO2 injection, capitalizing on their existing CO2 resources in West Texas. The acquisition supports their sustained commitment to exploration and production (E&P) and aligns with their strategic natural gas demand forecasts and financial growth (OilPrice.com). For more details, you can view the full article here.
The acquisition includes some 11,600 acres of land that can potentially increase oil production using the enhanced oil recovery technique involving carbon dioxide injection, sources said.
Kinder Morgan separately plans to sell several of its older, conventional oilfields in the area, one of the people said, to concentrate on the higher-potential properties.
“This is showing KMI is staying in the E&P business,” one of the people said using the acronym for exploration and production. “They have huge CO2 sources in West Texas” that can be used to produce more oil.
Another 100 million to 300 million barrels of oil could be recovered over time from the field by using enhanced oil recovery.
Kinder Morgan, one of North America’s largest energy infrastructure companies, operates a vast network of pipelines and terminals across the region. The company handles a variety of energy resources including natural gas, crude oil, and carbon dioxide. Notably, Kinder Morgan’s pipeline system spans approximately 83,000 miles, and it manages about 143 terminals. This infrastructure plays a crucial role in the transportation and storage of energy resources in the U.S.
The company is actively involved in the CO2 business segment, where it produces, transports, and markets CO2 primarily for enhanced oil recovery operations in mature oil fields. This segment also includes Kinder Morgan’s operations in crude oil pipelines, particularly in West Texas, and ventures into renewable natural gas (RNG) and liquefied natural gas (LNG) facilities (Financial Times) (Disfold).
Avad Energy Partners’ information is less publicly detailed, but they are identified as a partner with Kinder Morgan in this new venture in Texas’s oil fields, particularly in Crane County. This area is noted for its oil production potential, and the partnership aims to boost outputs through advanced recovery techniques like CO2 injection.
For further details on Kinder Morgan’s operations, you can visit their official site here. The Avad Energy Partners website can be found HERE. Steven Mickey is the President of AVAD Energy Partners II, bringing extensive experience in oil and gas asset acquisitions from his previous role at Venado Oil & Gas. His career began at Goldman Sachs in the Global Natural Resources Group, followed by a stint at Denham Capital Management, overseeing diverse investments. He holds a B.S. in Finance and a minor in Spanish from Trinity University. [Link to full bio]
