Kinder Morgan divests Rockies assets

Kinder Morgan Energy Partners LP (KMEP) has agreed to sell Kinder Morgan Interstate Gas Transmission (KMIGT), Trailblazer Pipeline Co., the Casper-Douglas natural gas processing and West Frenchie Draw treating facilities in Wyoming, and its 50% interest in the Rockies Express Pipeline (REP) to Tallgrass Energy Partners LP.

KMEP will receive $1.8 billion in cash from the transaction. Including the proportionate amount of REP debt, this amount is equivalent to a value of $3.3 billion.

In March, parent Kinder Morgan Inc. reached agreement with the US Federal Trade Commission to divest certain KMEP assets in the Rockies to obtain regulatory approval of its acquisition of El Paso Corp., which closed in May (OGJ Online, June 20, 2012).

Tallgrass emphasized conversion of the Pony Express Pipeline portion of KMIGT into oil service, the transitioning of its gas customers, and placing it in service second-half 2014 as among its initial focuses. The company will also explore what it describes as promising growth projects on the east end of REP.

Effective Aug. 1, KMEP acquired 100% of Tennessee Gas Pipeline (TGP) and a 50% interest in El Paso Natural Gas (EPNG) from KMI to replace the cash flow from the KMEP assets being divested (OGJ Online, Aug. 14, 2012).

Tallgrass is owned by The Energy & Minerals Group, Kelso & Co., and the management team of Tallgrass, including Chief Executive Officer David G. Dehaemers, Jr.

KMEP intends to use the proceeds from the divestiture sales to repay a $2 billion credit facility issued when it acquired TGP and EPNG. KMEP expects the transaction to close in the fourth quarter, subject to FTC approval.

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

Related Articles

DOE approves LNG exports to non-FTA countries from Oregon project

03/24/2014 The US Department of Energy conditionally approved Jordan Cove Energy Project LP’s application to export LNG through its proposed terminal on Orego...

MARKET WATCH: Front-month crude oil contract closes up, gas down on week

03/24/2014

The front-month crude oil contract ended the week higher Mar. 21 while natural gas futures prices edged slightly lower.

Judge bars Anadarko e-mails as evidence in Macondo blowout hearing

03/21/2014 A federal district judge in New Orleans refused to accept e-mails between Anadarko Petroleum Corp. and BP PLC as evidence in a hearing to determine...

Industry group welcomes most UK budget moves

03/21/2014 Oil & Gas UK voiced support for all but one of several measures affecting the offshore producing industry announced in the UK government’s annu...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected