First let me turn to KMI, we declared a quarterly dividend of $0.30 or $1.20 annualized run rate. That means we are on track to pay a $1.18 for 2011 and I’ll remind you that bursts the target of $1.16 that we announced during the IPO road show back in February. As we announced Sunday afternoon, KMI and El Paso Corp have entered into a definitive agreement, whereby KMI will acquire all the outstanding shares of El Paso. This transaction will create the largest midstream and the fourth largest energy company in North America.As we said in our conference call on Monday morning, assuming that that merger closes on January 1, 2012, we would expect dividends per share for 2012 at KMI to be about $1.45 that increased from the $1.18 in 2011 results from strong internal growth that we would get regardless of the El Paso merger and from the impact of the merger. Since we don’t expect the merger to close until the second quarter, the actual dividend payment for 2012 will likely be a few cents smaller than the $1.45, I described. With that let me turn to KMP. At KMP, the board increased the quarterly cash distribution per common unit to $1.16 or $4.64 annualized. That distribution represents a 5% increase over the third quarter 2010 cash distribution. In my judgment, KMP had a very good third quarter with all five of our business segments producing higher segment earnings before DD&A than during the same period last year. We now expect to exceed our previously announced 2011 budget at KMP for cash distributions of $4.60 per unit. We are seeing really good growth opportunities in the midstream energy sector, particularly in the natural gas shale plays and in the coal export business over in our terminal segment. Distributable cash flow per unit at KMP before certain items was a $1.19 compared to $1.02 for the third quarter last year and also above our plan for the third quarter of this year.
Now let me turn to the segments. I will start with the products pipeline segment. The growth there was driven by higher volumes on the Cochin pipeline system due to increased demand for both terminal and storage deliveries. Plantation Pipe Line also had higher revenues and increased gasoline and jet fuel volumes, and the Southeast and West Coast terminals also produced better results than in the comparable period last year.That said, total refined products volumes on our systems decreased by 0.4% for the third quarter versus the same period last year, pipeline volumes were up on Calnev and Plantation, but down on Pacific and Central Florida. To put that in perspective, as we always do we compare that to the EIA national figures, which for the third quarter of 2011 showed a decline of 2%. So, we showed a 0.4% and they showed a 2%. So, we were a bit better than the national average, but still somewhat disappointing that the absolute volumes of refined products deteriorated from the year ago in the third quarter. NGL volumes on the other hand were up by 14% versus the same period last year due to the strong performance at Cochin and our ethanol volumes were also up in the segment and in our products pipeline segment we handled 8 million barrels of ethanol that was up 6% from last year, and we continue to realized solid growth in the biodiesel barrels that we are handling in our products pipeline segment. Turning to our natural gas segment, the natural gas pipeline segment, growth in the third quarter was driven primarily by contributions from the KinderHawk acquisition, the Fayetteville Express Pipeline coming on full service on January 1st of this year by good results on the Texas intrastate system, which largely reflected better processing margins and very good results from our Eagle Ford joint venture and then for higher Casper-Douglas processing margins. If you look at volumes on our natural gas pipeline, overall segment transport volumes were up 12% in the third quarter versus the same period last year due to the Fayetteville Express Pipeline coming online and due to solid transport volumes on our Texas intrastate pipeline system. Read the rest of this transcript for free on seekingalpha.com