Kinder Morgan to sell stake in pipeline and other assets for $1.8 billion
22 August 2012
US pipeline transporter Kinder Morgan Inc on Monday agreed to sell some of its Rocky Mountain natural-gas processing and pipeline assets to Tallgrass Energy Partners LP for about $1.8 billion, in order to meet the agreement arrived with the US antitrust regulators over its recent $21.1-billion acquisition of El Paso Corp.
Houston, Texas-based Kinder Morgan will sell its interstate Gas Transmission, Trailblazer Pipeline Company, the Casper-Douglas natural gas processing and West Frenchie Draw treating facilities in Wyoming and the company's 50 per cent interest in the Rockies Express Pipeline.
The sale is one of several that Kinder Morgan has recently undertaken as required by the US Federal Trade Commission (FTC) as part of its October 2011 acquisition of pipeline operator El Paso Corp. (See: Kinder Morgan may acquire El Paso for $21.1 bn, create $94-bn business)
In March 2012, Kinder Morgan 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, 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,'' said chairman and CEO Richard Kinder.
In February, it sold the exploration and production unit of El Paso Corp. for $7.15 billion to a consortium led by private equity firm Apollo Global Management.
''Tallgrass Energy Partners is excited about the opportunity to acquire these premier midstream assets. We look forward to working with a talented group of Kinder Morgan employees and will leverage their integral experience as we continue the high level of operational performance of these assets, work to expand the asset base and grow the company. said Tallgrass CEO, David Dehaemers,
Tallgrass is owned by the company's management, the private equity firm Kelso & Company and an investor consortium that includes the hedge fund Magnetar Capital.