Oil prices fell a few…
Oil prices fell on Tuesday…
On Wednesday, Kinder Morgan (KMI) announced that it had reached a US$900-million deal to provide in-plant services to five Nucor plants. The plants are located in Decatur, Alabama; Hertford, North Carolina; Berkeley, and South Carolina. There are two plants at Blytheville, Arkansas.
Under the terms of the ten-year deal, Kinder Morgan will annually handle 14.8 million tons of scrap steel, direct reduced iron, pig iron, and provide other services. Kinder Morgan said that it expects the plants to produce around 1.34 million tons of steel products per year.
Commenting on the deal, Kinder Morgan Terminals President John Schlosser stated: “Nucor is one of our largest customers in our Terminals division. This new agreement ensures that KMI will continue to provide handling, processing, warehousing and marine services to Nucor, the largest recycler and steel producer in North America. These facilities provide Nucor and other customers access to our growing national network of marine and rail terminals. This agreement also reconfirms KMI's commitment to growing our terminals business."
U.S. steelmakers have struggled with lower steel prices as cheaper imported products have flooded the markets. However more recently, those companies have seen an uptick in steel prices as a result of new tariffs.
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In morning trading on Thursday, Nucor shares rose 1.3 percent to US$49.59 while shares in Kinder Morgan fell 1.3 percent to US$18.06. Nucor’s stock has been up 23 percent this year, Kinder Morgan’s stock has also climbed, by 21 percent.
Kinder Morgan recently sold 50 percent of its interest in the Utopia pipeline project to Riverstone Investment Group LLC. Under the terms of that deal, Riverstone would make an upfront cash payment, part of which would reimburse Kinder Morgan for half of what it has already spent on the Utopia pipeline project in Ohio. Riverstone will also finance Kinder Morgan’s share of the future capex required for the completion of the pipeline project.
By Lincoln Brown for Oilprice.com
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Lincoln Brown is the former News and Program Director for KVEL radio in Vernal, Utah. He hosted “The Lincoln Brown Show” and was penned a…