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Kinder Morgan Energy Partners Invests $96 Million to Acquire/Expand Terminal Assets; Acquisitions Year to Date Total Nearly $400 Million

Posted on: Monday, 11 July 2005, 09:01 CDT

HOUSTON, July 11 /PRNewswire-FirstCall/ -- Kinder Morgan Energy Partners, L.P. today announced two separate terminal acquisitions totaling $48 million, including capital to enhance operational efficiency, and an additional $48 million investment for two major terminal expansion projects. The largest of the transactions is the purchase of a refined petroleum products terminal in New York Harbor from ExxonMobil Oil Corporation (ExxonMobil). The other acquisition involves a dry-bulk river terminal in Kentucky. The expansion projects will take place at the company's existing liquids terminal complex on the Houston Ship Channel and its Shipyard River bulk terminal in South Carolina.

According to Chairman and CEO Richard D. Kinder, the acquisitions are expected to be immediately accretive to earnings and cash flow at KMP. "Acquiring these assets and expanding two existing facilities will enable us to expand our services to customers in growing markets. As the largest independent terminal operator in the United States, we will continue to look for strategic opportunities to grow our terminal business and provide needed services to customers and additional value to unitholders. We have announced approximately $400 million in acquisitions in 2005."

Acquisitions * In New York Harbor, KMP acquired a refined petroleum products terminal from ExxonMobil. Located on Staten Island, this terminal will complement existing KMP facilities in Carteret and Perth Amboy, N.J., and significantly increase the company's liquids storage capacity on the East Coast. The facility currently has storage capacity of 2.3 million barrels for gasoline, diesel and fuel oil and KMP expects to bring several idle tanks back into service that would add another 550,000 barrels of capacity. In addition, the company will be rebuilding a berth with the ability to accommodate tanker vessels. As part of the transaction, ExxonMobil entered into a long-term storage capacity agreement with KMP and will continue to utilize a portion of the terminal. * In Hawsville, Ky., KMP acquired a dry-bulk terminal from Southern Shores Terminal that primarily handles wood chips and finished paper products. The facility is located along the Ohio River. As part of the transaction, KMP executed a long-term handling agreement with Weyerhauser. Additionally, the company plans to expand the terminal to increase utilization and provide storage services for additional products. Expansions * On the Houston Ship Channel, KMP will construct 600,000 barrels of new storage capacity for gasoline and distillate at its Pasadena liquids terminal that is being supported by long-term contracts. Over the past four years, KMP has added more than 2.6 million barrels of capacity at its Pasadena and Galena Park facilities, which comprise the largest independently operated liquids terminals complex in the world. * In Charleston, S.C., KMP will undertake improvements at its Shipyard River terminal that are expected to increase throughput by more than 30 percent. KMP has executed a long-term contract with a third party to support the economics of the expansion. The terminal currently handles about 3.5 million tons of bulk products annually, mainly coal, petroleum coke and cement. Specifically, the expansion will enhance KMP's ability to handle the increasing supplies of imported coal used to meet the growing demand for electricity in the Southeast.

Kinder Morgan Energy Partners, L.P. is one of the largest publicly traded pipeline limited partnerships in America. KMP owns or operates more than 25,000 miles of pipelines and more than 140 terminals. Its pipelines transport more than 2 million barrels per day of gasoline and other petroleum products and up to 8.4 billion cubic feet per day of natural gas. Its terminals handle over 80 million tons of coal and other dry-bulk materials annually and have a liquids storage capacity of approximately 65 million barrels for petroleum products and chemicals. KMP is also the leading provider of CO2 for enhanced oil recovery projects in the United States.

The general partner of KMP is owned by Kinder Morgan, Inc. , one of the largest energy transportation and storage companies in America. Combined, the two companies have an enterprise value of approximately $28 billion.

This news release includes forward-looking statements. 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.

Kinder Morgan Energy Partners, L.P.

CONTACT: media relations, Rick Rainey, +1-713-369-9452, or investorrelations, Mindy Mills, +1-713-369-9490, both of Kinder Morgan EnergyPartners, L.P.

Web site: http://www.kindermorgan.com/

Source: PRNewswire-FirstCall

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