Kinder Morgan Partners buys TransMontaigne Partners' interest in BOSTCO

HOUSTON, Texas - Kinder Morgan Energy Partners, L.P. (NYSE: KMP) on Jan. 4 announced the purchase of TransMontaigne Partners L.P.'s 50 percent interest in the previously announced Battleground Oil Specialty Terminal Co., LLC (BOSTCO) project.

KMP now owns 98 percent of BOSTCO and began construction on Dec. 14 of a new, approximately $430 million oil terminal located on the Houston Ship Channel.

The remaining two percent will be held by a customer at the BOSTCO facility.

The first phase of the project currently includes construction of 52 storage tanks that will have a capacity of 6.6 million barrels for handling residual fuel, feedstocks, distillates and other black oils. Terminal service agreements and/or letters of intent have been executed with customers for almost all of the capacity.

"The project will include one of the deepest vessel drafts in the Houston Ship Channel and position Kinder Morgan extremely well for the growing trend of exporting petroleum related products overseas," said Kinder Morgan Terminals President Jeff Armstrong.

BOSTCO is expected to be accretive to cash distributable to KMP unitholders when the first phase of the project comes online in the third quarter of 2013. The first phase of the project is expected to be completed by the first quarter of 2014.

TransMontaigne Partners L.P. (NYSE: TLP)  received cash consideration equal to its investment plus a transferrable option to buy 50 percent of Kinder Morgan's interest at any time prior to Jan. 20, 2013.

The project will include one of the deepest vessel drafts in the Houston Ship Channel and be well positioned to participate in the growing trend of exporting petroleum-related products overseas.

Chesapeake Partners buying Marcellus assets from Chesapeake Energy

OKLAHOMA CITY, Okla. - Chesapeake Midstream Partners, L.P. (NYSE: CHKM) on Dec. 28 announced it has agreed to acquire Appalachia Midstream Services, L.L.C. (NYSE: AMS), the wholly owned subsidiary of Chesapeake Midstream Development, L.P. that holds its Marcellus Shale midstream assets, for total consideration of $865 million.

Chesapeake Midstream Development, L.P. is a wholly owned subsidiary of Chesapeake Energy Corp. (NYSE: CHK).

The addition of the Marcellus assets makes CHKM the industry's largest gathering and processing master limited partnership as measured by throughput volume.

Through acquiring AMS, CHKM will own approximately 47 percent of an integrated system of assets that consist of approximately 200 miles of gathering pipeline in the Marcellus Shale, including the liquids-rich Marcellus South region. Throughput for these assets at Dec. 15, 2011, was just over one billion cubic feet per day. AMS operates the assets under 15-year fixed fee gathering agreements with leading Marcellus natural gas and liquids producers.

The gathering agreements include significant acreage dedications and annual fee redeterminations that target a mid-teens return on all invested capital in the acquired assets.

Chesapeake has committed to generating EBITDA of not less than $100 million in 2012 and $150 million in 2013 from the Marcellus assets for the benefit of CHKM.

The acquisition, which closed on Dec. 30, 2011, was financed by $600 million of cash drawn from CHKM's revolving credit facility and equity consideration of $265 million (9.8 million CHKM common units), increasing Chesapeake's limited partnership ownership of CHKM to 46.1 percent from 42.3 percent.

Kinder Morgan Partners buys TransMontaigne Partners’ interest in BOSTCO

HOUSTON, Texas - Kinder Morgan Energy Partners, L.P. (NYSE: KMP) on Jan. 4 announced the purchase of TransMontaigne Partners L.P.'s 50 percent interest in the previously announced Battleground Oil Specialty Terminal Co., LLC (BOSTCO) project.

KMP now owns 98 percent of BOSTCO and began construction on Dec. 14 of a new, approximately $430 million oil terminal located on the Houston Ship Channel.

The remaining two percent will be held by a customer at the BOSTCO facility.

The first phase of the project currently includes construction of 52 storage tanks that will have a capacity of 6.6 million barrels for handling residual fuel, feedstocks, distillates and other black oils. Terminal service agreements and/or letters of intent have been executed with customers for almost all of the capacity.

"The project will include one of the deepest vessel drafts in the Houston Ship Channel and position Kinder Morgan extremely well for the growing trend of exporting petroleum related products overseas," said Kinder Morgan Terminals President Jeff Armstrong.

BOSTCO is expected to be accretive to cash distributable to KMP unitholders when the first phase of the project comes online in the third quarter of 2013. The first phase of the project is expected to be completed by the first quarter of 2014.

TransMontaigne Partners L.P. (NYSE: TLP)  received cash consideration equal to its investment plus a transferrable option to buy 50 percent of Kinder Morgan's interest at any time prior to Jan. 20, 2013.

The project will include one of the deepest vessel drafts in the Houston Ship Channel and be well positioned to participate in the growing trend of exporting petroleum-related products overseas.

Transco proposes 258-mile Atlantic Access gas pipeline for Marcellus Shale

JOHNSTOWN, Pa. - Transcontinental Gas Pipe Line Co. is maneuvering to construct a pipeline to carry Marcellus Shale natural gas across Pennsylvania to West Virginia.

The Atlantic Access Project, a proposed 258-mile pipeline using 36-inch pipe, would move fuel from the rich Marcellus gas fields of western Pennsylvania and the panhandle of West Virginia to eastern gas-hungry markets.

"We are early - early in this process," said Christopher Stockton, a spokesman for Houston-based Transco. Transco is owned by The Williams Co. Inc. of Tulsa, Okla.

The company has filed a pre-application, amounting to a request for a review of project plans, with the Federal Energy Regulatory Commission.

The project could cost $1 billion, according to U.S. Rep. Bill Shuster, chairman of the House Subcommittee on Railroads, Pipelines and Hazardous Materials.

When the pipeline is completed, it would carry 1,350,000 dekatherms of natural gas per day, or enough energy to provide winter heat for 1,350,000 homes for one day, according to calculations by Penn State's Marcellus Center for Outreach and Research.

Enterprise to sell part of Energy Transfer stake for $825.1 million

Enterprise Products Partners L.P. (NYSE: EPD), the largest shareholder of Energy Transfer Equity L.P. (NYSE: ETE), agreed to sell about three-fourths of its stake in the company to unnamed purchasers, saying it will use the $825.1 million in proceeds for general partnership purposes, including funding growth capital projects.

ETE is the general partner of Energy Transfer Partners L.P. (NYSE: ETP), which runs a natural-gas pipeline business.

EPD, a pipeline company, said it plans to sell 22.8 million Energy Transfer units. The deal values Energy's units at about $36.18, or a 9.1 percent discount from the Dec. 23 closing price of $39.80.

EPD would still hold about 6.5 million shares of ETE's units after the sale, which is slated to close in January.