Energy infrastructure giant Kinder Morgan Inc. (NYSE: KMI) announced Wednesday morning that it had signed a 10-year agreement with steelmaker Nucor Corp. (NYSE: NUE) to provide services for five Nucor facilities. The agreement is valued at about $900 million for the contract period.
The five Nucor plans produce approximately 13.4 million tons of steel products annually, and Kinder Morgan’s terminals division plans to handle about 14.8 million tons a year of scrap steel, direct-reduced iron, pig iron and other feedstocks. The terminals division also will provide other ancillary services, according to the announcement.
Kinder Morgan already operates a terminal in Blytheville, Arkansas, where two of the five Nucor facilities are located, that can ship and receive materials via the Mississippi River, as well as by rail and truck. Kinder Morgan operates a terminal dedicated to storage for Nucor in Decatur, Alabama, as well as several other facilities in the Decatur area. The company also has terminals businesses in the Carolinas.
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Kinder Morgan Terminals division president, John Schlosser, said:
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.
Shares of Kinder Morgan traded down about 1.6% Wednesday morning, at $18.01, in a 52-week range of $11.20 to 38.58.
Nucor stock traded up about 1.7%, at $49.80, in a 52-week range of $33.90 to $51.99.
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