This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

KMP To Purchase 100% Of Tennessee Gas Pipeline And 50% Of El Paso Natural Gas Pipeline For Approximately $6.22 Billion

Kinder Morgan Energy Partners, L.P. (NYSE: KMP), today announced that it will acquire 100 percent of Tennessee Gas Pipeline (TGP) and a 50 percent interest in El Paso Natural Gas (EPNG) pipeline from Kinder Morgan, Inc. (NYSE: KMI) for approximately $6.22 billion, including about $1.8 billion in assumed debt at TGP and approximately $560 million of proportional debt at EPNG. The transaction, which is expected to close this month and be effective Aug. 1, was approved by the independent members of the boards of directors of both KMI and Kinder Morgan Management, LLC (NYSE: KMR) following the receipt by each board of separate fairness opinions from different investment banks.

The company previously announced that KMI would offer to sell (drop down) these assets to KMP to more than replace cash flow from certain assets KMP is divesting pursuant to an agreement KMI reached with the Federal Trade Commission in order to complete the El Paso Corporation acquisition. KMP expects to complete the divestiture process during the third quarter of 2012. It is anticipated that the combination of the divestitures and the dropdowns will be slightly accretive to KMP’s distributable cash flow in 2012 and nicely accretive thereafter.

“We are delighted to announce the drop down of two premier natural gas pipelines, which will generate substantial, stable cash flow to KMP and its unitholders for many years to come,” said Kinder Morgan Chairman and CEO Richard D. Kinder. “TGP serves the Northeast and has access to the growing Marcellus and Utica shale plays, while EPNG serves much of the West, including southern California, Arizona and northern Mexico. A number of expansion projects are already underway on both of these pipeline systems (see July 18, 2012, KMP earnings release) and we are pursuing additional opportunities. This is a great transaction for both KMI and KMP. KMP is purchasing world-class assets with tremendous growth opportunities at an attractive price, and KMI is reducing its debt outstanding and continuing to participate in the cash flows from the assets through its general and limited partner interests in KMP.”

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASDAQ 4,776.5080 -51.8170 -1.07%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs