Kinder Morgan reports rise in fourth-quarter profits

Kinder Morgan Energy Partners reported Wednesday that fourth-quarter profits were up sharply from the same quarter in 2011 as the company expands to meet the transportation needs of the country’s growing energy production operations.

The oil and natural gas storage and pipeline company reported net income of $619 million for the quarter that ended Dec. 31, compared with $479 million a year earlier.

The partnership increased its quarterly cash distribution per common unit to $1.29, up 11 percent from the fourth quarter of 2011.

Richard Kinder, chairman and CEO of Kinder Morgan Inc., which owns Kinder Morgan Energy Partners’ general partner, said increasing the distribution to shareholders remains a key focus for the companies that make up Kinder Morgan. The company also owns El Paso Pipeline Partners.

“The future looks very good,” he told analysts on a conference call after the fourth-quarter results were released.

He said growth at Kinder Morgan Inc. was driven by strong performance at both Kinder Morgan Energy Partners and El Paso Pipeline Partners and discussed several other projects the company has under construction or in the planning phase.

Kinder Morgan Energy Partners, a master limited partnership, has benefited from increasing volumes on its Eagle Ford shale assets, Kinder said, detailing $2.7 billion in projects that are currently under way.

He also talked a little about a potential pipeline project linking production in the Permian Basin to California, promising “a lot more announcements to come in 2013.”

Kinder Morgan was the first of the big U.S. midstream companies to report fourth-quarter earnings, which were released after the stock market closed.

Before the earnings were announced, shares of Kinder Morgan Inc. closed down 24 cents a share, at $36.60. Units of Kinder Morgan Energy Partners closed up 26 cents, at $87.95.

El Paso Pipeline Partners closed up 10 cents a unit, at $39.59.

Kinder Morgan Inc. reported net income of $349 million for the quarter, up from $155 million for the fourth quarter of 2011.

It also reported that the board of directors had increased the quarterly cash dividend to 37 cents per share, up 19 percent from the fourth quarter of 2011.

Kinder also told analysts that several management changes will be coming over the next few months, including the retirement of Kinder Morgan Inc. President C. Park Shaper.

Shaper will remain on the board of Kinder Morgan Inc. but said he wants to spend more time with his wife and children, “whether they like it or not.”

Kinder also announced several other changes in the executive suite, effective March 31, including:

Steve Kean will become president and chief operating officer of Kinder Morgan Inc and will join the boards of Kinder Morgan Energy Partners and Kinder Morgan Management. Kean is currently executive vice president and chief operating officer and a member of the boards of directors of Kinder Morgan Inc. and the general partner of El Paso Pipeline Partners.

Jeff Armstrong, president of Kinder Morgan Terminals, will become vice president of corporate strategy.

John Schlosser will become president of the terminals division; he is currently vice president of business development for the division.

Ron McClain will become president of the products pipelines division, replacing Tom Bannigan, who is retiring.

Jim Wuerth will become president of Kinder Morgan CO2, replacing Tim Bradley, who is retiring.