Kinder Morgan announced Tuesday that it sold 50 percent of its stake in the Utopia Pipeline Project to Riverstone Investment Group. The private equity firm agreed to an upfront cash payment that will reimburse Kinder Morgan for half of its prior capital expenditures related to the project.
Riverstone has also agreed to pay for its share of future capital expenditures that are necessary to complete and commission the project that is estimated at $500 million.
“This is another step towards achieving our stated goals of strengthening our balance sheet and positioning the company for long-term value creation. This agreement also demonstrates our ability to originate projects with attractive returns that partners are willing to pay to participate and invest in,” said Kinder Morgan president and chief executive officer Steve Kean.
The Utopia Pipeline will run for 215 miles from Harrison County, Ohio to Fulton County, Ohio and connect with an existing Kinder Morgan pipeline to transport ethane and ethane-propane mixtures to petrochemical companies in Ontario, Canada. The pipeline is planned for construction in November of this year and full service early 2018.