Kinder Morgan Energy Partners (NYSE: KMP) today increased its quarterly cash distribution per common unit to $1.32 ($5.28 annualized) payable on Aug. 14, 2013, to unitholders of record as of July 31, 2013. This represents a 7 percent increase over the second quarter 2012 cash distribution per unit of $1.23 ($4.92 annualized) and is up from $1.30 per unit ($5.20 annualized) for the first quarter of 2013. KMP has increased the distribution 48 times since current management took over in February 1997.

Chairman and CEO Richard D. Kinder said, “KMP had a strong second quarter as our stable and diversified assets continued to grow and produce incremental cash flow. Our five business segments produced approximately $1.337 billion in segment earnings before DD&A and certain items, up 39 percent from the second quarter of 2012. Growth was spearheaded by the drop downs from Kinder Morgan, Inc. associated with its acquisition of El Paso Corporation last year, contributions from the midstream assets we recently acquired in the Copano Energy transaction, strong oil production in our CO2 segment and good results at our Products Pipelines business.

Looking forward, we see exceptional growth opportunities across all of our business segments, as there is a need to build additional midstream infrastructure to move or store oil, gas and liquids from the prolific shale plays in the United States and the oilsands in Alberta, along with increasing demand for CO2, which is used for enhanced oil recovery. We currently have identified approximately $13 billion in expansion and joint venture investments at KMP and we are pursuing customer commitments for additional projects.”

Read the entire KMP earnings report.



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Proposed KMI and El Paso Merger Would Create Largest U.S. Natural Gas Pipeline Company

The proposed merger of Kinder Morgan Inc. (KMI) and El Paso Corp. (El Paso) announced on October 16, 2011 would create the nation's largest natural gas pipeline company. If approved by state and federal regulatory officials, the combined company would operate about 67,000 miles of natural gas pipelines (see the blue and red lines in the map), or about 22% the U.S. natural gas pipeline network. Upon closing, the proposed $38 billion transaction would be one of the biggest natural gas pipeline mergers in United States history.

El Paso's natural gas pipeline network complements Kinder Morgan's natural gas system. By adding El Paso's network to its own, KMI increases its access to natural gas markets in the Southwest, Southeast, Northwest, and Northeast. El Paso has been extending its reach into these markets. In 2011, El Paso completed three major pipeline projects: Ruby Pipeline, Florida Gas Transmission Phase VIII, and Tennessee Gas Pipeline 300 Line, in total adding around 1,200 miles and 2.6 billion cubic feet per day of capacity to its network.

Source: U.S. Energy Information Administration, based on SNL Financial.

Note: The labeled brown bars represent the four largest deals since 1996. Total transaction value only includes completed and pending deals based on the announcement year.
*Pending transaction

As measured by total dollars, 2011 has been a significant year so far for mergers and acquisitions in the natural gas transmission sector compared with previous years. The proposed merger between Kinder Morgan and El Paso could be the largest U.S. pipeline related merger and acquisition since 1996, representing about 54% of the total transaction value of proposed or concluded mergers so far in 2011, according to SNL Financial.

On June 15, 2011, Energy Transfer Equity agreed to acquire Southern Union for $9.2 billion, making it the second largest pending natural gas pipeline-related deal in 2011. Since 1996, three natural gas transmission mergers and acquisitions deals over $20 billion were concluded according to data from SNL Financial: a $22 billion deal between El Paso and Coastal Corp in 2000; a $21 billion leveraged buyout deal of Kinder Morgan by a group of private investors in 2006; and a $20 billion deal between Enterprise Products Partners and Enterprise GP Holdings in 2010.


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