Attached files
file | filename |
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8-K - FORM 8-K - El Paso Pipeline Partners, L.P. | h71729e8vk.htm |
EX-2.1 - EX-2.1 - El Paso Pipeline Partners, L.P. | h71729exv2w1.htm |
EX-99.3 - EX-99.3 - El Paso Pipeline Partners, L.P. | h71729exv99w3.htm |
EX-99.2 - EX-99.2 - El Paso Pipeline Partners, L.P. | h71729exv99w2.htm |
Exhibit 99.1
News For Immediate Release |
El Paso Pipeline Partners Acquires Majority Interests in Elba Island LNG Terminal and Elba Express
Pipeline
HOUSTON, TEXAS, March 25, 2010El Paso Pipeline Partners, L.P. (NYSE: EPB) today announced that it
has agreed to acquire a 51-percent interest in both Southern LNG
Company, L.L.C. and El Paso Elba Express
Company, L.L.C. from El Paso Corporation for $810 million. Southern LNG owns the Elba Island
liquefied natural gas (LNG) terminal near Savannah, Georgia. El Paso Elba Express Company owns the
Elba Express Pipeline which went into service on March 1, 2010. El Paso will continue to own the
remaining interests of each company.
We are delighted to announce the partnerships largest acquisition to date, said Jim Yardley,
president and chief executive of El Paso Pipeline Partners. The addition of the Elba Island LNG
terminal and the Elba Express Pipeline broadens the partnerships asset base with two high-quality
assets. Almost all of the total revenues from Elba and Elba Express come from monthly demand
charges, making them a perfect fit with our partnerships existing steady cash flow profile. In
addition, these cash flows are supported by long-term contracts with two of the LNG industrys
leading participants.
The Elba Island LNG receiving terminal has 1.8 billion cubic feet (Bcf) per day of send-out
capacity and 7.3 Bcf of storage capacity, which is expected to increase to 11.5 Bcf following the
commissioning of a new storage tank this summer. The terminal is fully-contracted under agreements
with subsidiaries of Shell Oil Company (Shell) and BG Energy Holdings Limited (BG) with an average
life of more than 20 years. BG has an option to further expand the terminal to 15.7 Bcf of storage and 2.1
Bcf per day of peak send-out capacity.
Elba Express Company owns an approximately 190-mile interstate natural gas pipeline with current
capacity of 945 million cubic feet (MMcf) per day that is fully subscribed with a subsidiary of
Shell for 30 years. The pipeline provides natural gas transportation capacity from Elba Island to
markets in Georgia, and through interconnections with other pipelines, to the Southeastern and
Eastern United States. A subsidiary of BG has fully contracted, under a 25-year contract, for a
$30 million compression expansion of the pipeline that will increase the capacity up to 1,165 MMcf
per day and could be in-service as early as January 2014.
The transaction is expected to close by the end of March 2010 and is being funded with $236 million
of cash proceeds from the partnerships recent equity issuance, $149 million of equity from the
issuance of 5,346,251 million common units to El Paso Corporation, a $3 million general partner
capital contribution and new debt.
Management intends to recommend to the Board of Directors of the general partner a $0.02 per unit,
or 6 percent increase in the quarterly cash distribution to $0.38 per unit, or $1.52 per unit on an
annualized basis, beginning with the distribution to be declared and paid in the second quarter
2010.
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 Boards 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 approximately 60 percent of the limited partner units, and the 2 percent
general partner interest. 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.
Cautionary Statement Regarding Forward-Looking Statements
This release includes forward-looking statements and projections. El Paso Pipeline Partners 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, that the amount of
cash distributions declared will be determined on a quarterly basis by the board of directors of
our general partner, in their sole discretion, and will depend on many factors including El Paso
Pipeline Partners financial condition, earnings, cash flows, capital requirements, financial
covenants, legal requirements and other factors deemed relevant by the board of directors of our
general partner; and our ability to achieve projected growth rates will depend on many different
factors, including without limitation, the ability to obtain necessary governmental approvals for
proposed pipeline projects and to successfully construct expansion projects on time and within
budget; operating hazards, natural disasters, weather-related delays, casualty losses and other
matters beyond our control; the risks associated with recontracting of transportation commitments;
regulatory uncertainties associated with pipeline rate cases; actions taken by third-party
operators, processors and transporters; conditions in geographic regions or markets served by El
Paso Pipeline Partners and its affiliates and equity investees or where its operations and
affiliates are located; the effects of existing and future laws and governmental regulations;
competitive conditions in our industry; changes in the availability and cost of capital; and other
factors described in El Paso Pipeline Partners (and its affiliates) Securities and Exchange
Commission filings. While these statements and projections are made in good faith, El Paso Pipeline
Partners and its management cannot guarantee that anticipated future results will be achieved.
Reference must be made to those filings for additional important factors that may affect actual
results. El Paso Pipeline Partners assumes no obligation to publicly update or revise any
forward-looking statements made herein or any other forward-looking statements made, whether as a
result of new information, future events, or otherwise.
Contacts:
Investor-Media Relations
Bruce Connery, Vice President
(713) 420-5855
Bruce Connery, Vice President
(713) 420-5855
Media Relations
Bill Baerg, Manager
(713) 420-2906
Bill Baerg, Manager
(713) 420-2906