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Kinder Morgan Energy Partners Expanding Texas Intrastate System Into the Permian Basin

Posted on: Monday, 15 August 2005, 12:00 CDT

HOUSTON, Aug. 15 /PRNewswire-FirstCall/ -- Kinder Morgan Energy Partners, L.P. today announced that work is underway to expand its Texas intrastate natural gas pipeline system into the Permian Basin by converting 254 miles of a previously acquired 24-inch diameter crude oil pipeline to natural gas service. The $40 million project is in addition to and will complement the conversion of a 130-mile segment of the same crude oil pipeline between Katy, Texas, and Austin, Texas, that began natural gas service in July of 2004. This portion of the conversion will access a number of natural gas processing plants in West Texas and provide transportation service from McCamey to just west of rapidly growing Austin.

"The conversion project will provide Austin and other key central Texas markets with access to additional, attractively priced supplies of natural gas to help them meet the area's growing demand," said Tom Martin, president of KMP's Texas Intrastate Pipeline Group. "Initial service on this portion of the conversion is expected to commence in October 2005, and the project is expected to be immediately accretive to earnings and cash flow at KMP."

The project is supported by contracts with Baltimore, Md.-based Constellation Energy Commodities Group, Inc., WTG Gas Marketing, Inc., an affiliate of West Texas Gas, Inc., based in Midland, Texas, and other shippers. Approximately 95 percent of the 150 million cubic feet per day (MMcf/d) of new capacity being created by the conversion project is already under contract.

KMP's Texas intrastate system is a critical piece of the energy infrastructure in Texas, which is the nation's largest producer and consumer of natural gas. The 5,800-mile pipeline system serves as a vital link between the natural gas producing areas along the Gulf Coast and the rest of the state, with approximately 5 billion cubic feet per day (Bcf) of peak transportation capacity and about 120 Bcf of working gas storage capacity.

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 approximately 145 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 $30 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: Rick Rainey, Media Relations, +1-713-369-9452, or Mindy Mills,Investor Relations, +1-713-369-9490, both of Kinder Morgan Energy Partners,L.P.

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

Source: PRNewswire-FirstCall

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