Kinder Morgan Inc. (KMI) agreed to sell certain Kinder Morgan
Energy Partners L.P. (KMP) assets in order to receive U.S. Federal
Trade Commission approval of its proposed El Paso Corp. (EP)
acquisition.
Kinder Morgan agreed to buy El Paso in a cash and stock deal
valued at $21.1 billion when announced in October. Last week, El
Paso shareholders overwhelmingly approved the sale, which would
create North America's largest natural-gas pipeline operator.
Kinder Morgan Energy transports natural gas and coal.
Under the tentative FTC agreement, Kinder Morgan will sell
Kinder Morgan Interstate Gas Transmission; Trailblazer Pipeline
Co.; its Casper-Douglas natural gas processing and West Frenchie
Draw treating facilities in Wyoming; and the company's 50% interest
in the Rockies Express Pipeline.
"We would prefer to retain all of these assets, but as we
anticipated when the transaction was announced, we must sell
certain assets in the Rockies to obtain FTC approval," Chairman and
Chief Executive Richard D. Kinder said.
Kinder Morgan expects to offer drop-down El Paso assets to
Kinder Morgan Energy to replace the assets that latter will
divest.
El Paso also expects to offer drop-down assets to El Paso
Partners L.P. (EPB), a natural-gas pipeline and storage facility
operator.
Kinder Morgan now expects to close the El Paso acquisition in
mid to late May.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com
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