Kinder Morgan buying 50 percent interest in natural gas venture for $300 million

HOUSTON, Texas - Kinder Morgan Energy Partners, L.P. (KMP), on April 25 announced a definitive agreement with an investment vehicle affiliated with Kohlberg Kravis Roberts & Co. L.P., whereby KMP will purchase from KKR its 50 percent interest in the joint venture that owns the Altamont gathering, processing and treating assets (Uinta Basin in Utah) and the Camino Real Gathering System (Eagle Ford Shale in Texas) for $300 million in KMP common units.

El Paso Corp. (EP) owns the other 50 percent of the joint venture.

KMP anticipates the transaction will close subsequent to the completion of Kinder Morgan, Inc.'s (KMI) acquisition of El Paso, which is expected to occur by the end of May.

"We are pleased to reach this agreement with KKR which, upon closure of both transactions noted above, will increase Kinder Morgan's ownership in this joint venture to 100 percent - 50 percent at KMP and 50 percent at KMI," said Duane Kokinda, president of Kinder Morgan's intrastate pipelines.

Upon closing, the transaction is expected to be immediately accretive to cash distributable to KMP unitholders.

Marc Lipschultz, KKR's global head of energy and infrastructure, commented, "Since forming our joint venture over a year ago, it has been a pleasure partnering with the El Paso team on building out an exciting midstream business."

With over 1,100 miles of pipeline infrastructure, the Altamont system includes over 450 well connections with producers, and it operates a processing plant with the design capacity of 60 million cubic feet per day (MMcf/d) and a 5,600 barrel per day (b/d) natural gas liquids fractionator. The Camino Real Gathering System has 150 MMcf/d of gas gathering capacity and 110,000 b/d of oil gathering capacity.

Kinder Morgan and El Paso announce tentative election deadline of May 23

HOUSTON, Texas - Kinder Morgan, Inc. (NYSE: KMI) and El Paso Corp. (NYSE: EP) on April 16 announced that the tentative deadline for El Paso shareholders and equity award holders to elect the form of consideration they wish to receive in El Paso's pending merger with Kinder Morgan is May 23.

The election deadline may be extended, in which case Kinder Morgan will issue a press release announcing the new election deadline. The closing of the merger is expected to occur by the end of May, subject to regulatory approval. El Paso shareholders who hold shares through a bank, broker, trust company or other nominee may have an earlier election deadline and should carefully review any instructions received from their bank, broker, trust company or other nominee.

As previously announced, El Paso shareholders can elect, for each El Paso share held, either cash, Kinder Morgan common stock, or a combination of cash and Kinder Morgan common stock.

El Paso equity award holders can elect either cash or a combination of cash and Kinder Morgan common stock for all of their outstanding equity awards. All elections will be subject to proration and all El Paso shareholders and equity award holders will receive warrants to purchase Kinder Morgan common stock.

Kinder Morgan profit up in 2Q, but Kinder Morgan Partners net plummets

Second-quarter profit at Kinder Morgan Inc. (NYSE: KMI) soared on higher revenue and increased earnings from equity investments. For the latest quarter, Kinder Morgan Inc. reported earnings of $132.1 million, or 17 cents per Class A share, compared with $46 million a year earlier. Revenue climbed 2.1 percent to $2.03 billion. Analysts polled by Thomson Reuters expected a profit of 25 cents on revenue of $2.07 billion. Earnings from equity investments were $75.3 million, up 24 percent from the prior year. The company owns the general partner of Kinder Morgan Energy Partners as well as a stake in the pipeline operator.

Second-quarter profit at Kinder Morgan Energy Partners LP (NYSE: KMP) fell 36 percent as expenses jumped. KMP’s profit fell to $230.5 million from $361.2 million. On a per-unit basis, which is affected by the general partner's interest, the latest quarter was a loss of 19 cents per unit, compared with an 88-cent profit a year earlier. Revenue improved 2.9 percent to $2.02 billion. Wall Street projected a 40-cent profit on $2.12 billion in revenue. Expenses increased 14 percent.

Kinder Morgan, Inc. (NYSE: KMI) has announced an increase in its dividend for the second quarter to $0.30 per share ($1.20 annualized) from $.29 per share ($1.16 annualized), payable on Aug. 15 to shareholders of record on Aug. 1. KMI on July 19 reported second quarter cash available to pay dividends of $154 million. Through the first two quarters of the year, the company reported cash available to pay dividends of $405 million. Chairman and CEO Richard D. Kinder said, "KMI had a good second quarter and is on target to exceed its previously disclosed annual budget of $820 million in cash available to pay dividends." Approximately 98 percent of the distributions KMI receives are attributable to KMP. KMI also owns a 20 percent interest in Natural Gas Pipeline Company of America.