Kinder Morgan Energy Partners, L.P. (NYSE: KMP) announced that its natural gas intrastate pipeline companies in Texas have entered into long-term transportation, storage and sales contracts with BP Energy of North America effective Sept. 1, 2002.
Through the agreements, BP will have access to up to one billion cubic feet per day (Bcf/d) of natural gas transportation capacity and up to 19 Bcf of storage capacity combined on the Kinder Morgan Tejas and Kinder Morgan Texas Pipeline (KMTP) systems. Texas is one of the country's major energy markets, with the largest natural gas consumption and production of any state in the U.S. "These long-term contracts, which represent a large portion of the 3.5 Bcf/d of peak capacity on Kinder Morgan Tejas, are expected to result in significant growth for our Texas intrastate pipelines," said Richard D. Kinder, chairman and CEO of KMP. "Our agreement with BP is exactly the type of customer relationship that we envisioned when we completed our acquisition of Kinder Morgan Tejas earlier this year. BP has strong credit, and as the largest gas producer and one of the top marketers in the North American market, BP is an ideal partner for us since we focus solely on operating natural gas pipelines and other midstream energy assets."
By combining the operations of its large intrastate pipeline systems, KMP has increased transportation capacity, improved reliability and created additional services for its customer base. "We have received enthusiastic support from local utility companies, and as we previously announced, KMTP has extended agreements and entered into new long-term transportation and sales contracts with various utilities," Kinder said. "Texas is expected to have strong demand growth over the next decade, and much of the market is connected to our pipelines."
With a peak transportation capacity of 3.5 Bcf/d, Kinder Morgan Tejas is a 3,400-mile pipeline system that stretches from south Texas into east Texas to the Texas-Louisiana state border. KMTP is a 2,500-mile natural gas pipeline system with a peak capacity of 2.8 Bcf/d that transports gas from producing fields in south Texas, the Gulf Coast and the Gulf of Mexico to markets in southeastern Texas. Combined, the systems serve a significant number of utilities and other industrial customers located along the Houston Ship Channel and in the Beaumont/Port Arthur areas of Texas.
Kinder Morgan Energy Partners, L. P. is the largest publicly traded pipeline limited partnership in the U.S. in terms of market capitalization and the largest independent refined petroleum products pipeline system in the U.S. in terms of volumes delivered. KMP owns or operates more than 25,000 miles of pipelines and over 70 terminals. Its pipelines transport more than two million barrels per day of gasoline and other petroleum products and up to 7.8 billion cubic feet per day of natural gas. Its terminals handle over 55 million tons of coal and other dry-bulk materials annually and have a liquids storage capacity of approximately 55 million barrels for petroleum products and chemicals. KMP is also the leading provider in the U.S. of CO2, which is used in enhanced oil recovery projects.
The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI), one of the largest energy transportation and storage companies in America. Combined, the two companies have an enterprise value of approximately $17 billion. This news release includes forward-looking statements. Although Kinder Morgan believes that its expectations are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are enumerated in Kinder Morgan's Forms 10-K and 10-Q as filed with the Securities and Exchange Commission.
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