Kinder Morgan, TrailStone form Mexican natural gas marketing company

The joint venture between KMI and TrailStone subsidiaries will combine North American gas supply and transportation to provide competitively priced gas supply to industrial markets and power generators in the Monterrey area and to other markets that can be accessed via the national system of gas pipelines to be owned and operated by CENAGAS.

The joint venture will market capacity allocated to a TrailStone subsidiary on KMI’s Mier-Monterrey expansion.

“Our Texas Intrastate system will provide transportation, storage and gas supply services in the United States in support of the joint venture, and benefit from increased utilization of its existing assets,” said Larry Bell, Kinder Morgan Natural Gas Midstream VP of marketing and transportation.

The joint venture will be managed and operated by TrailStone and, subject to regulatory approvals, expects to be operational by the first quarter of 2016.

The companies involved in the joint venture say they are actively pursuing and engaged in conversations with U.S. producers and end-users in Monterrey and customers connected to the Mexican national grid.

“The marketing company will provide a convenient and efficient option for end-users in the Monterrey area and other regions of Mexico to benefit from low cost U.S. natural gas under the new open access regulations that will become effective in Mexico in 2016,” said Bell.

The joint venture will provide these customers with a bundled natural gas supply package that can include Henry Hub or Houston Ship Channel-based pricing alternatives as well as swing and storage services.

“This joint venture is a significant building block in the expansion of TrailStone’s physical commodity trading and logistics platform,” said TrailStone Chief Executive Officer David Silbert.

“We are excited to further develop our strategic relationship with Kinder Morgan, which is one of the most prominent and proven energy companies in North America.”