HOUSTON, March 6, 2013 -- On March 1, 2013, Kinder Morgan Energy Partners, L.P. (“KMP”) closed the acquisition of 50% of the outstanding equity interests in El Paso Midstream Investment Company, L.L.C. (“EPMIC”), and 50% of the outstanding equity interests in El Paso Natural Gas Company, L.L.C. (“EPNG”) from Kinder Morgan, Inc. (“KMI”).
The consideration includes cash of approximately $988 million and the issuance to KMI of KMP common units having an aggregate value of approximately $110 million. EPNG has approximately $1.12 billion debt that will remain in place following the acquisition. KMP funded the cash portion of the purchase price of the acquisition with proceeds from equity and debt issuances.
The acquisition was negotiated and approved on behalf of KMP and its public unitholders by the conflicts and audit committees of the boards of directors of both Kinder Morgan Management, LLC (“KMR”), the delegate of Kinder Morgan G.P., Inc., the general partner of KMP (“GP Inc.”), and GP Inc.
EPNG is a 10,200-mile pipeline system with a design capacity of about 5.6 Bcf per day. 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. EPMIC owns (i) the Altamont natural gas gathering, consisting of over 1,200 miles of pipeline infrastructure, over 450 well connections, a natural gas processing plant with a design capacity of 60 million cubic feet per day, and a natural gas liquids fractionator with a design capacity of 5,600 barrels per day, and (ii) the Camino Real gathering system located in the Eagle Ford, which has the capacity to gather 150 million cubic feet per day of natural gas and 110,000 barrels per day of crude oil.
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. KMI owns the general partner of KMP. Collectively, 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. (“EPB”), along with limited partner interests in KMP, KMR and EPB.
To view the Kinder Morgan press release click here.
Baker Botts represented the conflicts and audit committees of KMR and GP Inc. in the negotiation and approval of the acquisition. Greenhill & Co., Inc. acted as the financial advisor to the committees.
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