HOUSTON — Kinder
Morgan Energy Partners, L.P. has entered into a purchase and sale agreement
with Tallgrass Energy Partners, LP to sell Kinder Morgan Interstate
GasTransmission (KMIGT), Trailblazer Pipeline Co., the Casper-Douglas natural
gas processing and West Frenchie Draw treating facilities in Wyoming and the
company’s 50% interest in the Rockies Express Pipeline (REX).
is owned by The Energy & Minerals Group, Kelso & Company and the
management team of Tallgrass, including CEO David G. Dehaemers, Jr. KMP will
receive approximately $1.8 billion in cash from the transaction. Including the
proportionate amount of REX debt, this amount is equivalent to a value of $3.3
billion. The transaction is expected to close in the fourth quarter. Barclays
and Citi acted as financial advisors to KMP on this transaction.
March 2012, Kinder Morgan, Inc. announced that it had reached an agreement with
the FTC to divest certain KMP assets in the Rockies in order to obtain
regulatory approval of its acquisition of El Paso Corp., which closed in May.
“As I previously stated, we would prefer to keep all of these assets, but we
anticipated divestiture of certain assets in the Rockies would be necessary to
obtain FTC approval,” Chairman and CEO Richard D. Kinder says.
previously served as CFO and EVP of corporate development at Kinder Morgan from
1997 to 2003. He served as the EVP of corporate development at Inergy, LP from
2003 to 2007 and was one of the owners of Inergy, LP’s general partner, NRGP,
when it went public in 2005. In his career he has led more than $14 billion of
midstream energy merger, acquisition and development opportunities.
conversion of the Pony Express Pipeline portion of KMIGT into oil service, the
seamless transitioning of its gas customers, and placing it in service during
the second half of 2014 will be a significant focus for near term growth. In
addition, we will be exploring some promising growth projects on the east end
of Rockies Express to maximize the potential of this state-of-the-art
pipeline,” Dehaemers says.
Energy & Minerals Group is the management company for a series of highly
specialized private equity funds with total investor commitments of
approximately $4.8 billion. Since inception in 2006, EMG has invested in nine
midstream energy transactions comprising approximately $2.6 billion of equity
Aug. 1, KMP acquired 100% of Tennessee Gas Pipeline (TGP) and a 50%
interest in El Paso Natural Gas (EPNG) pipeline from KMI to more than replace
the cash flow from the KMP assets being divested. KMP intends to use the
proceeds from the divestiture sales to repay a $2 billion credit facility
that was issued when KMP acquired TGP and EPNG.
Morgan Energy Partners, L.P. is a 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 29,000 miles of
pipelines and 180 terminals. The general partner of KMP is owned by Kinder
Morgan, Inc. 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.