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Kinder Morgan (KMI) to Modify Harvey for Neste's Green Fuel
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Kinder Morgan, Inc. (KMI - Free Report) is teaming up with Finnish renewable fuels firm Neste to build a raw material storage and logistics hub. The energy infrastructure provider intends to modify the existing Harvey facility in Louisiana to provide support for rising renewable diesel, feedstock and sustainable aviation fuel production. The renewable feedstocks are used for polymers and chemicals.
Per the deal, the Harvey facility will be modified to store raw materials like cooking oil and others for renewable fuels, which emit lower greenhouse gases than traditional fuel. The facility will likely act as the primary hub, where cooking oil of more than 40,000 restaurants from all over the United States will be stored. Initially, 30 converted tanks will be used by Neste to store more than 650,000 barrels of oil, marking around 20% of its capacity at the moment.
The financial details of the deal are yet to be disclosed. The renewable project is likely to come online in first-quarter 2023 and can be expanded in the future. The move strengthened the existing partnership between the two companies and solidified Kinder Morgan’s position in Neste’s renewable fuel value chain. Kinder Morgan is actively increasing green energy exposure. Last month, it closed the acquisition of renewable natural gas developer Kinetrex Energy. Renewable natural gas is developed from sources like organic waste in landfills, waste from agricultural operations and wastewater treatments.
With rapidly rising renewable fuel production, building complementary green infrastructure is necessary but costly. Also, new infrastructure projects are facing harsh criticism from environmental groups across the country. Given the tight situation, modification of the existing infrastructure can not only reduce costs but also decrease carbon footprint. It can also increase the affordability of low-emission fuels across the markets served. As such, the long-term contract is expected to enhance the sustainability of Kinder Morgan’s Louisiana assets while reducing logistics costs for Neste.
Neste’s renewable fuel business is likely to further expand in the United States in the coming days, which can provide more opportunities for Kinder Morgan. The Finnish firm is acquiring companies in the United States that gather used cooking oil from restaurants. Securing the supply of raw materials will strengthen its future production. Several other companies with refining operations like Phillips 66 (PSX - Free Report) , Chevron Corporation (CVX - Free Report) , Marathon Petroleum Corporation (MPC - Free Report) and others are securing soybean oil, which will be used as raw materials for their renewable fuel projects.
Image: Bigstock
Kinder Morgan (KMI) to Modify Harvey for Neste's Green Fuel
Kinder Morgan, Inc. (KMI - Free Report) is teaming up with Finnish renewable fuels firm Neste to build a raw material storage and logistics hub. The energy infrastructure provider intends to modify the existing Harvey facility in Louisiana to provide support for rising renewable diesel, feedstock and sustainable aviation fuel production. The renewable feedstocks are used for polymers and chemicals.
Per the deal, the Harvey facility will be modified to store raw materials like cooking oil and others for renewable fuels, which emit lower greenhouse gases than traditional fuel. The facility will likely act as the primary hub, where cooking oil of more than 40,000 restaurants from all over the United States will be stored. Initially, 30 converted tanks will be used by Neste to store more than 650,000 barrels of oil, marking around 20% of its capacity at the moment.
The financial details of the deal are yet to be disclosed. The renewable project is likely to come online in first-quarter 2023 and can be expanded in the future. The move strengthened the existing partnership between the two companies and solidified Kinder Morgan’s position in Neste’s renewable fuel value chain. Kinder Morgan is actively increasing green energy exposure. Last month, it closed the acquisition of renewable natural gas developer Kinetrex Energy. Renewable natural gas is developed from sources like organic waste in landfills, waste from agricultural operations and wastewater treatments.
With rapidly rising renewable fuel production, building complementary green infrastructure is necessary but costly. Also, new infrastructure projects are facing harsh criticism from environmental groups across the country. Given the tight situation, modification of the existing infrastructure can not only reduce costs but also decrease carbon footprint. It can also increase the affordability of low-emission fuels across the markets served. As such, the long-term contract is expected to enhance the sustainability of Kinder Morgan’s Louisiana assets while reducing logistics costs for Neste.
Neste’s renewable fuel business is likely to further expand in the United States in the coming days, which can provide more opportunities for Kinder Morgan. The Finnish firm is acquiring companies in the United States that gather used cooking oil from restaurants. Securing the supply of raw materials will strengthen its future production. Several other companies with refining operations like Phillips 66 (PSX - Free Report) , Chevron Corporation (CVX - Free Report) , Marathon Petroleum Corporation (MPC - Free Report) and others are securing soybean oil, which will be used as raw materials for their renewable fuel projects.
Price Performance & Zacks Rank
Its shares have increased 25% in the past year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research