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Kinder Morgan Energy Partners Message Board

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  • arbtrdr arbtrdr Aug 20, 2012 9:39 AM Flag

    Dropdown Math Fail

    KMP owns a local pipeline that was built in the 1940s. It transports gasoline. I would guess its initial cost at somewhere under $2M and the annual capex for maintaining it is over $10M today per KMP. They get a cash flow for transport of some $18M a year on this chunk of pipe.

    Bottom line is transport pipe can go on virtually forever if you do enough maintanance. Demand is always there and they would cost big $$ to replace. Certainly gathering and processing systems are different, but there is always going to be a LTerm need to transport commodities from point to point and a line if maintained (and often bebuilt piece by piece) can last indefinately.

    ARB

 
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