KMEP completes TGP, EPNG pipeline purchases

Kinder Morgan Energy Partners LP (KMEP) has completed its previously announced acquisition of 100% of Tennessee Gas Pipeline (TGP) and a 50% interest in El Paso Natural Gas (EPNG) pipeline from Kinder Morgan Inc. (KMI). The $6.22 billion transaction allows KMEP to more than replace cash flow from certain assets it is divesting pursuant to an agreement KMI reached with the US Federal Trade Commission as part of completing its El Paso Corp. acquisition.

FTC issued its final order approving the acquisition in June, requiring KMI to sell three Rocky Mountain gas pipelines and associated assets. KMI had said when the deal closed in May that it would offer assets to KMEP to replace the divested holdings (OGJ Online, June 20, 2012).

TGP is a 13,900-mile system with a design capacity of 7.5 bcfd, moving gas from Louisiana, the Gulf of Mexico, and South Texas to the US Northeast, including New York City and Boston. EPNG is a 10,200-mile system with a design capacity of 5.6 bcfd. It transports gas from the San Juan, Permian, and Anadarko basins to California, other western states, Texas, and northern Mexico. TGP and EPNG combined have more than 200 bcf of working gas storage capacity.

KMEP and BP North America last month signed agreements to provide BP condensate processing and storage at KMEP’s terminal on the Houston Ship Channel (OGJ Online, July 19, 2012). In June, KMEP completed its acquisition of a 50% interest in a joint venture owning the Altamont gathering, processing, and treating assets in the Uinta basin in Utah and the Camino Real gathering system in the Eagle Ford shale in Texas from Kohlberg Kravis Roberts & Co. LP (OGJ Online, June 5, 2012).

Contact Christopher E. Smith at chriss@ogjonline.com.

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