A Big Deal in the Works for Kinder Morgan Energy Partners LP (KMP)

Looking ahead
Refurbishing the Port of Wilmington is now more important than ever. Beginning in 2015 , larger ships will sail through the newly expanded Panama canal, headed to and from U.S. ports, among other places. Few East Coast ports can handle these larger ships, which means that the Port of Delaware will not be alone in its upgrades. It also means that any port that does not upgrade will miss out on the new business.

There have also been increasing mentions of repealing the Jones Act — the legislation that requires American ships and crews to move cargo between American ports — in the media, coming from journalists, analysts, and industry professionals alike. A repeal of the act would introduce more foreign ships to American ports. Busier ports are great, provided the underlying infrastructure can handle the business.

If this deal goes through, it presents a great opportunity for Kinder Morgan to continue to expand its footprint outside of its traditional energy business — but not so far outside that investors need to be concerned that the partnership is biting off more than it can chew.

Foolish takeaway
From a forward-looking investment perspective, I like this deal. Kinder Morgan has proven itself adept at managing its terminal business. As the world of maritime trade continues to evolve, increasing exposure to maritime ports makes a lot of sense. Still, we will have to wait and see whether the deal goes through, and if it does, what the exact stipulations are, before we consider this a successful move for Kinder Morgan.

The article A Big Deal in the Works for Kinder Morgan originally appeared on Fool.com and is written by Aimee Duffy.

Fool contributor Aimee Duffy has no position in any stocks mentioned. Click here to see her holdings and a short bio. If you have the energy, check out what she’s keeping an eye on by following her on Twitter, where she goes by @TMFDuffy. The Motley Fool recommends Kinder Morgan. The Motley Fool owns shares of Kinder Morgan.

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