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Kinder Morgan to acquire Copano for $5 billion to broaden shale midstream operations

HOUSTON -- Kinder Morgan Energy Partners and Copano Energy have announced a definitive agreement whereby KMP will acquire all of Copano’s outstanding units for a total purchase price of approximately $5 billion, including the assumption of debt.

Copano, a midstream natural gas company with operations primarily in Texas, Oklahoma and Wyoming, provides comprehensive services to natural gas producers, including natural gas gathering, processing, treating and natural gas liquids fractionation. Copano owns an interest in or operates about 6,900 mi of pipelines with 2.7 Bcfd of natural gas throughput capacity and 9 processing plants with more than 1 Bcfd of processing capacity and 315 MMcfd of treating capacity.

KMP Chairman and CEO Richard D. Kinder said, “As a result of this acquisition, we will be able to pursue incremental development in the Eagle Ford Shale play in south Texas, gain entry into the Barnett Shale Combo in north Texas and the Mississippi Lime and Woodford Shales in Oklahoma. We continue to be bullish on the domestic shale plays and believe they will drive substantial future growth at KMP. Copano’s assets are very complementary to ours, as KMP is principally a pipeline transportation and storage company, while Copano is primarily a fee-based gathering, processing and fractionation player. Broadening our midstream assets will allow us to offer a wider array of services to our customers.”

“We anticipate retaining the vast majority of Copano’s approximately 415 employees,” Kinder said. “This transaction is about producing future cash flow and expanding our midstream services footprint.”

Copano is headquartered in Houston, Texas, and has a sizable office in Tulsa, Okla., which KMP intends to maintain. Upon closing, KMP will own 100% of Eagle Ford Gathering (currently a joint venture with Copano), which provides gathering, transportation and processing services to natural gas producers in the Eagle Ford Shale. Eagle Ford Gathering comprises approximately 400 mi of pipelines (including its capacity rights in certain KMP pipelines) with capacity to gather and process over 700,000 MMBtu per day.

01/31/2013

 

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