The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to a statement released by the pipeline operator yesterday regarding the consolidation efforts, Kinder Morgan Inc intends to acquire in full, Kinder Morgan Management LLC, Kinder Morgan Energy Partners LP as well as El Paso Pipeline Partners LP through a series of purchases with a total value of around $44 billion.

The consolidation of operations being carried out by Kinder, which fall under his control due to his 24% holding in their parent company, differs markedly from the current industry wide trend of spinning off pipelines and oil terminal operating units into tax-advantaged master limited partnerships, MLPs that will provide direct cash flow to shareholders. By streamlining its corporate structure, Kinder will be able to significantly lower its borrowing costs, while trading the company as a single stock entity, increasing the value it presents as currency when used to acquire its competitors.

“Richard Kinder did not get to the position he is in today by following the lead of others, he has always been a bit of a maverick in the industry and this has served him and his shareholders exceedingly well in the past, so we have no reason to think that this will not be the case in his current efforts of consolidating operations as others including major players like Royal Dutch Shell do the exact opposite,” said Murakami Hiroto, Senior Vice President of the Global Investment Division at The Avanti Group.

A presentation on Kinder's website shows the future for the company may well include the likely acquisition targets comprised of in excess 120 energy MLPs which between them hold a combined enterprise value of some $875 billion. In addition the energy pipeline operating giant has abundant room for growth via new industry projects with shale exploration and production in the U.S expanding at a record rate and generating the need for some $640 billion in developing additional pipelines and storage capacity up to 2035.

“As we have addressed before, the shale oil industry in the U.S and MLPs in particular are the hot ticket investments for all the obvious reasons as that country finally gets serious about energy independence from offshore oil purchases. Between the current industry boom and the high return that MLPs create for their investors in a direct manner they are one of the best investment vehicles on offer anywhere, to both individual and corporate investors alike,” concluded the Senior Vice President at The Avanti Group.

The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.