By Tess Stynes
Kinder Morgan Energy Partners LP (KMP) agreed to sell certain
assets to Tallgrass Energy Partners LP for about $1.8 billion,
divestitures required in an agreement with government regulators
related to the recent acquisition of El Paso Corp.
Including debt related to one of the assets--the company's 50%
interest in the Rockies Express Pipeline--Kinder Morgan Energy said
the deal is valued at about $3.3 billion.
Kinder Morgan Inc. (KMI) in March said it agreed to sell certain
KMP assets in order to receive U.S. Federal Trade Commission
approval for the roughly $21 billion El Paso deal, which closed in
May and created the largest natural-gas-pipeline operator in North
America.
The assets also include Kinder Morgan Interstate Gas
Transmission; Trailblazer Pipeline Co.; the Casper-Douglas natural
gas processing and West Frenchie Draw treating facilities in
Wyoming.
"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
Chief Executive Richard D. Kinder said .
Tallgrass is owned by Energy & Minerals Group, Kelso &
Co. and the management team of Tallgrass including Chief Executive
David G. Dehaemers.
Mr. Dehaemers served as chief financial officer at Kinder Morgan
from 1997 to 2003. He also was an executive at Inergy LP (NRGY)
from 2003 to 2007 and was one of the owners of Inergy's general
partner when it went public in 2005.
Kinder Morgan Energy plans to use proceeds from the asset sales
to repay a $2 billion credit facility.
The company, which transports natural gas and coal, has been
benefiting from a rush into U.S. alternative-shale fields, while
increasing demand in Asia for coal used in steelmaking had
supported performance at its coal export terminals.
Kinder Morgan Energy's common units closed Friday at $82.54 and
were inactive premarket. Kinder Morgan Inc.'s Class A shares rose
0.4% to $34.51 premarket.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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