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Will capital projects lift Kinder Morgan in the medium term?

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Mar. 10 2015, Updated 5:05 p.m. ET

Key CO2 and Terminals segments projects

In the previous article, we discussed why Kinder Morgan (KMI) will require higher capital expenditure, and how much it will spend in the next three to four years in the Natural Gas Pipelines segment. In this article, we’ll discuss the various capital projects that Kinder Morgan has in the medium term.

Kinder Morgan (KMI) makes up 4.4% of the Energy Select Sector SPDR ETF (XLE). Spectra Energy (SE) and Williams Companies (WMB) are two major US energy midstream operators. Spectra Energy (SE) makes up 1.45% of the Vanguard Energy ETF (VDE).

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Yellow Jacket central facility expansion

In September 2014, Kinder Morgan put in place this booster compression project in southwestern Colorado that will increase CO2 production by up to 90 million cubic feet per day.

American Petroleum Tankers and State Class Tankers

Kinder Morgan acquired five tankers in January 2014 for $961 million. These tankers have long-term time charters with a major integrated oil company.

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Edmonton and Bostco expansions

These two expansion projects added 4.6 million barrels of crude oil and refined petroleum products, and 7.1 million barrels of distillate, residual fuel, and other black oil product storage for a combined investment of $707 million. Both are supported by long-term contracts with the producers.

Products Pipelines and Kinder Morgan Canada projects

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Cochin Reversal project

In service since July 2014, the $301 million condensate pipeline conversion project in western Canada is supported by long-term contracts from the oilsands producers.

Utica Marcellus Texas Pipeline

Still in its development phase, the project involves the conversion of over 1,000 miles of natural gas service on TGP, the construction of approximately 200 miles of new pipeline from Louisiana to Texas, and 155 miles in Pennsylvania, Ohio, and West Virginia.

Will 2015 bring more stability to Kinder Morgan? What could be the potential obstacles? Read the following section to find out.

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