HOUSTON--(BUSINESS WIRE)--Mar. 1, 2013--
Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced that it
has completed the previously announced acquisition (drop down) of
50 percent of El Paso Natural Gas Company, L.L.C. (EPNG) and 50 percent
of former El Paso Midstream assets in Utah and South Texas from Kinder
Morgan, Inc. (NYSE: KMI). The transaction has a total value of
approximately $1.655 billion, including approximately $560 million of
proportional debt at EPNG. The transaction is expected to be immediately
accretive to cash available for distribution to KMP unitholders. KMP now
owns 100 percent of both EPNG and the midstream assets. The transaction,
which closed and is effective March 1, was approved by the independent
boards of both KMI and Kinder Morgan Management, L.L.C. (NYSE: KMR).
KMP purchased the assets at about eight times 2013 EBITDA. KMP funded 10
percent of the transaction value, net of debt assumed, with KMP units
valued at approximately $110 million that were issued to KMI at closing.
The remaining value was funded with cash. KMI intends to use the
proceeds from the dropdown to pay down debt that was associated with the
May 2012 purchase of El Paso Corporation.
EPNG is a 10,200-mile pipeline system with a design capacity of about
5.6 billion cubic feet per day (Bcf/d) of gas. It transports natural gas
from the San Juan, Permian and Anadarko basins to California, other
western states, Texas and northern Mexico. EPNG has up to 44 Bcf of
working natural gas storage capacity.
The midstream assets include Altamont gathering, processing and treating
assets in the Uinta Basin in Utah and the Camino Real gathering system
in the Eagle Ford shale in South Texas. The Altamont System has over
1,200 miles of pipeline infrastructure, over 450 well connections with
producers, and it operates a processing plant with a design capacity of
over 60 million cubic feet per day (MMcf/d) of gas being expanded to 80
MMcf/d and a 5,600 barrel per day (bpd) natural gas liquids
fractionator. The Camino Real Gathering System has 150 MMcf/d of gas
gathering capacity and 110,000 bpd of oil gathering capacity.
In connection with the transaction, BofA Merrill Lynch provided certain
financial advisory services to the board of directors of Kinder Morgan,
Inc. Greenhill & Co., LLC provided certain financial advisory services
to the conflicts and audit committee of the board of directors of Kinder
Morgan G.P., Inc. and Kinder Morgan Management, LLC.
Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline
transportation and energy storage company and one of the largest
publicly traded pipeline limited partnerships in America. It owns an
interest in or operates approximately 46,000 miles of pipelines and 180
terminals. The general partner of KMP is owned by Kinder Morgan, Inc.
(NYSE: KMI). Kinder Morgan is the largest midstream and the third
largest energy company in North America with a combined enterprise value
of approximately $100 billion. It owns an interest in or operates
approximately 75,000 miles of pipelines and 180 terminals. Its pipelines
transport natural gas, gasoline, crude oil, CO2 and other
products, and its terminals store petroleum products and chemicals and
handle such products as ethanol, coal, petroleum coke and steel. KMI
owns the general partner interests of KMP and El Paso Pipeline Partners,
L.P. (NYSE: EPB), along with limited partner interests in KMP, Kinder
Morgan Management, LLC (NYSE: KMR) and EPB. For more information please
This news release includes forward-looking statements. These
forward-looking statements are subject to risks and uncertainties and
are based on the beliefs and assumptions of management, based on
information currently available to them. Although Kinder Morgan believes
that these forward-looking statements are based on reasonable
assumptions, it can give no assurance that such assumptions will
materialize. Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include
those enumerated in Kinder Morgan’s reports filed with the Securities
and Exchange Commission. Forward-looking statements speak only as of the
date they were made, and except to the extent required by law, Kinder
Morgan/EPB undertakes no obligation to update or review any
forward-looking statement because of new information, future events or
other factors. Because of these uncertainties, readers should not place
undue reliance on these forward-looking statements.
Source: Kinder Morgan Energy Partners, L.P.
Kinder Morgan Energy Partners, L.P.
Richard Wheatley, (713) 420-6828
Staples, (713) 369-9221