El Paso Pipeline Partners LP (EPB) agreed to pay $635 million to
acquire midstream natural-gas assets from its general partner El
Paso Corp. (EP), a deal revealed last month to be in the works.
Under the terms of the agreement, El Paso Pipeline will buy its
general partner's remaining 14% interest in Colorado Interstate Gas
Co. and acquire all of Cheyenne Plains Investment Co., which serves
the Rocky Mountain region.
It will also assume roughly $242 million of debt.
The transaction is expected to close alongside Kinder Morgan
Inc.'s (KMI) acquisition of El Paso and immediately add to the
partnership's distributable cash flow.
Kinder Morgan, which transports natural gas and coal, agreed to
buy El Paso in a cash and stock deal valued at $21.1 billion when
unveiled in October. The acquisition would create North America's
largest natural-gas pipeline operator.
Kinder Morgan earlier this year reached an agreement with the
U.S. Federal Trade Commission to sell several midstream assets to
gain regulatory approval for the merger. Kinder Morgan also agreed
to shed its 50% interest in the Rockies Express Pipeline under that
deal.
Shares of El Paso closed at $28.77 Thursday and were inactive
premarket. Units of El Paso Pipeline were also inactive from their
Thursday close at $32.50.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; mia.lamar@dowjones.com