Kinder Morgan, Inc. Agrees to Sell Retail Gas Operations to GE Energy Financial Services.GE Unit Expanding Its Pipeline Investing Into Retail Gas Distribution
Kinder Morgan, Inc. (NYSE: KMI) today announced it will sell its natural gas retail distribution and related operations serving 260,000 customers in Colorado, Nebraska, Wyoming and Hermosillo, Mexico, to GE Energy Financial Services for $710 million plus working capital. The transaction is subject to certain closing conditions and regulatory approvals, including approvals from state utility commissions. The transaction is expected to close by the end of the first quarter of 2007.
The retail business serves residential, commercial, agricultural and industrial customers through 11,400 miles of distribution and transmission pipelines, underground storage fields, fieldsystem lines and related facilities.
KMI Chairman and CEO Richard D. Kinder said, "This is a good business that produces stable cash flow. However, given our small retail footprint within the United States and the proceeds KMI will receive, the sale makes sense for our shareholders. I would like to thank President Dan Watson and Retail's employees for their contributions to KMI." Upon closing, KMI expects to recognize a book gain from this transaction and will use proceeds from the sale to retire debt and repurchase stock. The sale does not include Terasen Gas, the large British Columbia natural gas utility that KMI purchased in November 2005.
With this transaction, GE Energy Financial Services expands beyond investments in wholesale pipelines and gas services into retail natural gas distribution. "This acquisition of an established retail natural gas distribution business with a capable and experienced management team and workforce extends our pipeline business and provides an excellent growth platform for our energy investing," said Alex Urquhart, President and CEO of GE Energy Financial Services. "We expect the acquisition and ensuing transition to be seamless to customers, who can continue to expect great service."
GE Energy Financial Services intends to maintain the retail gas distribution business' headquarters in Lakewood, Colo., with its president, Dan Watson, leading the workforce. The business will adopt a new name to be announced after the transaction closes.
About Kinder Morgan, Inc.
Kinder Morgan, Inc., headquartered in Houston, is one of the largest energy transportation, storage and distribution companies in North America. It owns an interest in or operates approximately 43,000 miles of pipelines that transport primarily natural gas, crude oil, petroleum products and CO2; more than 150 terminals that store, transfer and handle products like gasoline and coal; and provides natural gas distribution service to over 1.1 million customers. KMI owns the general partner interest of Kinder Morgan Energy Partners (NYSE: KMP), one of the largest publicly traded pipeline limited partnerships in the United States. Combined, the companies have an enterprise value of more than $35 billion. More information: www.kindermorgan.com.
This news release includes forward–looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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.
Note to editors: A map of the retail natural gas system is attached to this release
GE Energy Financial Services