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Kinder Morgan Acquires Three Ethanol Handling Terminals and Forms New Ethanol Joint Venture; US-Wide Ethanol Distribution Network

Kinder Morgan Energy Partners, L.P. (KMP) announced a terminal venture designed specifically to handle renewable fuels. The transaction includes KMP’s acquisition of three unit train ethanol handling terminals in Linden, N.J., Baltimore, Md., and Dallas, Texas, from US Development Group (USD), and the formation of a joint venture to coordinate access to these terminals, other assets KMP already owns and operates, and other projects under development.

The three unit train terminals acquired, together with KMP’s existing ethanol terminal assets, will create a nationwide distribution network of ethanol handling facilities connected by rail, marine, truck and pipeline. With the new terminal and pipeline venture and existing operations, KMP expects to handle in excess of 218,000 barrels per day of ethanol in 2010.

As part of the transaction, KMP and USD have entered into a joint venture agreement which will optimize and coordinate customer access to the expanded distribution platform and facilitate the rapid expansion of additional ethanol logistics facilities throughout the United States.

The acquisition price for the terminals was approximately $195 million, including more than $80 million in KMP equity issued to the seller. Upon closing, the transaction is expected to be immediately accretive to cash distributable to KMP unitholders. Combined with other acquisitions and projects already completed or underway, KMP has invested approximately $500 million in the renewable fuels handling business.

KMP is a leading pipeline transportation and energy storage company in North America. KMP owns an interest in or operates more than 28,000 miles of pipelines and 170 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke. KMP is also the leading provider of CO2 for enhanced oil recovery projects in North America.



The more distribution for biofuels the better. This is kind of like eBay for biofuels - small independent ethanol producers will have much better access to buyers around the country.

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