Kinder Morgan to buy Enron's share of Trailblazer Pipeline for $68 million

Kinder Morgan Energy Partners LP is buying Enron Trailblazer Pipeline Co.'s 33.3% interest in Trailblazer Pipeline Co. for $68 million in cash, increasing its ownership to 100%. Kinder Morgan has been in negotiations to buy the 436-mile line for several months, it said.

By the OGJ Online Staff

HOUSTON, Dec. 12 -- Kinder Morgan Energy Partners LP is buying Enron Trailblazer Pipeline Co.'s 33.3% interest in Trailblazer Pipeline Co. for $68 million in cash, increasing its ownership to 100%.

Kinder Morgan has been in negotiations to buy the 436-mile line for several months, it said.

If approved by the Enron board and Enron's bankruptcy court, the deal would close in the first quarter.

The Trailblazer Pipeline extends from Rockport, Colo., to Beatrice, Neb. Kinder Morgan operates the line.

"We are delighted to increase our ownership in Trailblazer, which generates reliable cash flow and is expected to experience significant growth in 2002 once our current expansion project is completed," said Richard D. Kinder, chairman and CEO of Kinder Morgan.

Trailblazer is expanding capacity to 846,000 dekatherms/day (Dth/d) from 522,000 Dth/d (OGJ Online, Aug. 9, 2000). The additional 324,000 Dth/d of capacity, to come online in mid-2002, has been fully subscribed in long-term, firm-transportation contracts. The expansion will cost $58 million.

Kinder said it has been interested in increasing its ownership of Trailblazer since it acquired its first stake in 1999.

Through capital contributions it will make to the expansion project, CIG Trailblazer Gas Co. -- an affiliate of El Paso Corp. -- is expected to become a 7-8% equity owner in Trailblazer Pipeline Co. in mid-2002 when the work is completed, Kinder Moran said.

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