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El Paso Pipeline Partners Acquires Additional Interest in Colorado Interstate Gas Company From El Paso Corporation
By Amarendra Bhushan for CEOWORLD Magazine Updated:July 27, 2009
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Natural gas transportation company El Paso Pipeline Partners L.P. announced that it has completed the acquisition of an additional 18-percent interest in Colorado Interstate Gas Company or CIG from El Paso Corporation for about $215 million. The acquisition increases El Paso Pipeline Partners’ interest in CIG to 58%.
“We are pleased to announce the partnership’s second acquisition from El Paso Corporation, which is immediately accretive to distributable cash flow,” said Jim Yardley, president and chief executive officer for the general partner of El Paso Pipeline Partners. “The acquisition increases our interest in CIG’s well-positioned assets with strong cash flows and organic growth opportunities.”
Recently, El Paso Pipeline Partners issued 12.65 million units, which raised cash proceeds of approximately $217 million. The partnership used the equity issuance proceeds to fund the transaction.
Management intends to recommend to the Board of Directors of the general partner an increase in the quarterly cash distribution to $0.35 per unit, or $1.40 per unit on an annualized basis, beginning with the distribution to be declared and paid in the fourth quarter 2009. This represents an increase of 6 percent from the announced second quarter 2009 quarterly rate of $0.33 per unit and an increase of 22 percent above the partnership’s original minimum quarterly distribution rate.
The terms of the transaction were unanimously approved by the Board of Directors of the general partner, El Paso Pipeline GP Company, L.L.C., based in part on the unanimous approval and recommendation of the Board’s conflicts committee, which is comprised entirely of independent directors. The conflicts committee engaged Tudor, Pickering, Holt & Co. to act as its independent financial advisor and to render a fairness opinion.
El Paso Pipeline Partners, L.P. is a Delaware limited partnership formed by El Paso Corporation to own and operate natural gas transportation pipelines and storage assets.
El Paso Corporation owns a 65-percent limited partner interest and a 2-percent general partner interest in the partnership. El Paso Pipeline Partners, L.P. owns Wyoming Interstate Company, an interstate pipeline system serving the Rocky Mountain region, a 58-percent interest in Colorado Interstate Gas Company which operates in the Rocky Mountain region, and a 25-percent interest in Southern Natural Gas Company, which operates in the southeastern region of the United States. For more information about El Paso Pipeline Partners, visit www.eppipelinepartners.com.
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