HOUSTON, TX -- (MARKET WIRE) -- 12/07/10 --
El Paso Midstream Group, Inc., a subsidiary of El Paso Corporation (NYSE: EP), and Kohlberg Kravis Roberts & Co. (together with its affiliates, "KKR") today announced that El Paso and KKR have executed agreements to create a new midstream joint venture. El Paso Midstream will operate the new venture, and they will each own a 50 percent interest. The joint venture is consistent with El Paso's commitment to develop midstream opportunities in a balance sheet-friendly manner. The transaction is expected to close by December 31, 2010.
Under the terms of the agreement, KKR will acquire a 50-percent interest in El Paso's Altamont gathering and processing assets for $125 million. The Altamont gathering and processing assets include approximately 800 miles of pipelines, 3,800 barrels per day of fractionation capacity and 40 million cubic feet per day of natural gas processing capacity. These assets serve El Paso Exploration & Production Company, as well as third-party producers. The Altamont field is one of El Paso's core oil programs, and El Paso expects to increase its drilling activity from a current two-rig program to three rigs in 2011 and six rigs by 2013. The partnership expects that there will be opportunities to expand the Altamont midstream assets given El Paso's and others' drilling plans.
In addition, KKR and El Paso will each invest up to approximately $500 million in future midstream projects including, but not limited to, the Marcellus Ethane Pipeline System (MEPS) in the Marcellus shale and the Camino Real Pipeline in the Eagle Ford shale. El Paso previously announced that it is partnering with Spectra Energy to develop the MEPS project, and expects to have a partner for the Camino Real Pipeline project.
"We are very pleased to partner with KKR as we develop our midstream business," said Mark Leland, president, El Paso Midstream Group. "KKR is a very successful and experienced investor in energy-related infrastructure, and we believe that the combination of our two companies creates a strong competitor in the midstream space."
"The emergence of unconventional resources is driving a need for significant investment in midstream infrastructure in the U.S., and El Paso's talented team is developing projects that are very well-positioned to meet these needs. El Paso is a world class pipeline operator and developer, and we are thrilled to be partnering with them to build a leading midstream business," Marc Lipschultz, the global head of KKR's Energy and Infrastructure business, said.
El Paso Corporation provides natural gas and related energy products in a safe, efficient, and dependable manner. The company owns North America's largest interstate natural gas pipeline system and one of North America's largest independent natural gas producers. El Paso has interests in more than 42,000 miles of interstate natural gas pipeline serving all of the major supply regions and leading markets across the U.S. For more information, visit www.elpaso.com. For more information about El Paso Midstream Group, visit www.elpaso.com/midstream.
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global alternative asset manager with $55.5 billion in assets under management as of September 30, 2010. With over 650 people and 14 offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with investors through its client relationships and capital markets platforms. KKR is publicly traded on the New York Stock
Exchange (NYSE: KKR). For additional information, please visit KKR's website at www.kkr.com.
El Paso Corporation Cautionary Statement Regarding Forward-Looking Statements
This release includes certain forward-looking statements and projections. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including, without limitation, our ability to successfully identify and finance new Midstream opportunities; changes in commodity prices and basis differentials for oil, natural gas, and power; general economic and weather conditions in geographic regions or markets served by the company and its affiliates, or where operations of the company and its affiliates are located, including the risk of a global recession and negative impact on natural gas demand; the
uncertainties associated with governmental regulation, competition; and other factors described in the company's (and its affiliates') Securities and Exchange Commission (SEC) filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.
El Paso Corporation
Peter McKillop or Kristi Huller
Source: El Paso Corporation
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