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Kinder Morgan’s CO2 Segment: Understanding the Key Growth Drivers


Feb. 17 2017, Updated 7:36 a.m. ET

KMI’s CO2 segment

Kinder Morgan’s (KMI) CO2 segment primarily produces, transports, and markets CO2 to oil fields, which is used to enhance the recovery of crude oil from mature oil fields. The segment’s exposure to commodity prices has negatively impacted its performance over the last several quarters.

In the long-term, however, demand for scarce CO2 is expected to drive volume and price. That said, KMI expects to maintain its current CO2 production levels with minimal incremental investment.

The above graph shows Kinder Morgan’s CO2 segment’s DCF (distributable cash flow) over the past 16 years. As the graph shows, the segment’s performance has historically been close to the budget, despite the inherent volatility associated with the segment’s operations.

In the next part of this series, we’ll explore Kinder Morgan’s Products Pipelines segment.

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