Kinder Morgan to acquire Hiland Partners for $3bn

Energy infrastructure firm Kinder Morgan has agreed to acquire Hiland Partners for about $3bn, including the assumption of debt.

The transaction, which is subject to regulatory approval, is expected to be completed in the first quarter of 2015.

Hiland operates crude oil gathering and transportation pipelines and natural gas gathering and processing systems primarily in the Bakken shale oilfields in North Dakota and Montana.

The company’s operations are primarily located in the Mid-Continent and Rocky Mountain regions of the US.

Hiland’s customers include Continental Resources, Oasis Petroleum, XTO Energy, Whiting Petroleum and Hess Corporation.

The company’s crude oil gathering systems feature about 1,225 miles of gathering pipelines.

At closing, the crude oil gathering systems will have over 1.8 million acres dedicated under long-term, fee-based agreements with major Bakken oil producers.

Hiland’s 485-mile Double H Pipeline will transport crude oil from the company’s Dore terminal in North Dakota to Guernsey, Wyoming.

The pipeline interconnects with Pony Express Pipeline for further transportation to Cushing, Oklahoma.

Double H Pipeline is in the final stages of construction and is anticipated to start service by the end of January 2015.

It will have an initial capacity of about 84,000 barrels per day, with an expansion to around 108,000 barrels a day in 2016.

Hiland’s gas gathering and processing systems in North Dakota and Montana include about 1,800 miles of gathering pipelines.

Kinder Morgan chairman and CEO Richard D. Kinder said: "Hiland’s systems serve some of the Bakken’s largest and most successful producers, including Continental.

"We look forward to continuing to provide high quality midstream services to these producers and pursuing incremental growth opportunities in the basin."