- Southern Co. has completed its acquisition of 50% of Kinder Morgan's Southern Natural Gas (SNG) system, and the two companies say they are "pursuing specific growth opportunities" including developing additional gas infrastructure.
- Kinder Morgan will continue to operate the pipeline system, which stretches approximately 7,000 miles throughout the Southeast. It is a principle supplier of gas to Alabama, Georgia and South Carolina.
- The deal is part of Southern Co.'s push to expand its gas pipeline system, building on its purchase of gas utility AGL Resources in July, making it the second biggest combined gas and electric utility by customer base.
Southern Co. continues to expand its presence in the natural gas side of utilities, following a trend set by Duke Energy with its proposed acquisition of Piedmont Gas. That, combined recent purchases of AGL Resources and PowerSecure, gives Southern a bigger foothold in a wider range of distributed energy technologies and fuel resources.
Southern Co., through its subsidiary Southern Company Gas, will now be a part owner of the SNG pipeline and not just a customer. Kinder Morgan will continue to operate the pipeline. But the most significant part of the companies' announcement they had completed the deal appears to be a hint that more projects are in the works.
In a statement, Kinder Morgan and Southern said the companies are "pursuing specific growth opportunities to develop additional natural gas infrastructure for the strategic venture."
“With our new ownership stake in Southern Natural Gas we look forward to working with Kinder Morgan to explore future opportunities to deliver natural gas to customers," Southern Co. President and CEO Thomas Fanning said in the statement.
The SNG system links natural gas supply basins in Texas, Louisiana, Mississippi and Alabama to markets in Louisiana, Mississippi, Tennessee , Florida, Georgia, South Carolina and Alabama. The companies say those last three states "are part of one of the fastest-growing natural gas demand regions in the United States."
Kinder Morgan said it is sticking with its plan to use proceeds from this transaction to reduce debt.