Reuters: Deals: Kinder Morgan to sell some assets for El Paso buy

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Kinder Morgan to sell some assets for El Paso buy Mar 15th 2012, 13:20 Thu Mar 15, 2012 9:51am EDT (Reuters) - Kinder Morgan Inc (KMI.N) said on Thursday it had reached a verbal agreement with regulators to sell some of Kinder Morgan Energy Partners LP's (KMP.N) pipeline assets in order to win approval for its planned purchase of El Paso Corp (EP.N). The $21 billion deal, which will close in May, had been expected to attract scrutiny from the Federal Trade Commission because of the merged company's overlapping pipeline networks. Without the divestments, the combined company would have controlled 80,000 miles of pipe stretching from coast to coast, potentially allowing it to raise transport fees from oil and gas producers, which could then drive up gas prices for power companies and other energy customers. Under the agreement with the FTC, Kinder Morgan said it would sell Kinder Morgan Interstate Gas Transmission, Trailblazer Pipeline Co, its Casper-Douglas natural gas processing and West Frenchie Draw treating facilities in Wyoming, and its 50 percent interest in the Rockies Express Pipeline. "We would prefer to retain all of these assets, but as we anticipated when the transaction was announced, we must sell certain assets in the Rockies to obtain FTC approval," Kinder Morgan Inc Chairman and CEO Richard D. Kinder said in a statement. El Paso shareholders voted to approve the sale of the company last week, despite criticism from some investors that the company's CEO Doug Foshee and the company's adviser, Goldman Sachs (GS.N), had conflicts of interest that kept El Paso from getting the highest possible price. Kinder Morgan Inc owns nearly all of its assets through its Master Limited Partnership, Kinder Morgan Energy Partners (KMP.N) Master Limited Partnership (MLP), a corporate structure that reduces its tax liability by paying nearly all of the profits to its owners. Shares of Kinder Morgan Inc rose 1.6 percent to $36.63 in early Thursday trading, while Kinder Morgan Energy partners, which trades as 'units' rather than shares, fell 0.9 percent to $83.10. (Reporting By Matt Daily; Editing by Gerald E. McCormick, Dave Zimmerman) Link this Share this Digg this Email Reprints

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