Kinder Morgan Takes the Helm of TransColorado Gas Transmission and Steers a Western Course

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). In October of 2002, Kinder Morgan, Incorporated (NYSE:KMI) (Houston Texas) signed a definitive agreement with an affiliate of Questar Corporation (NYSE:STR) (Salt Lake City, Utah) to purchase an indirect fifty percent in TransColorado Gas Transmission Company (Lakewood Colorado/Houston Texas). When the $105 million transaction closed Kinder Morgan became the sole owner and operator of TransColorado Gas Transmission Company.

TransColorado is presently studying several scenarios to expand capacity on its natural gas pipeline. The existing pipeline originates in the Piceance Basin near the Greasewood Hub in Colorado and extends south for 292 miles and terminates in the San Juan Basin near Blanco New Mexico. Kinder Morgan announced an open season on its TransColorado pipeline to confirm its ability to increase incremental firm transportation capacity, which began on January 21, 2003 and was to close on March 14, 2003, but due to response, has been extended to March 31, 2003.

One such expansion scenario is the Mainline Expansion Project. The TransColorado Mainline Extension Project would add another 100 miles of 36' diameter transmission pipeline beginning near the existing southern terminus in the Blanco Hub and run west to a point near Window Rock in Apache County Arizona.

During this current open season Kinder Morgan is seeking shipper support for 750 mmscfd of new natural gas capacity to the region. The supporting facilities for this new line are still undefined. Most likely two new compressor stations will be required with first located about 20 miles south of Blanco and the second near the Arizona/New Mexico Border.

Estimates range from 20,000 to 30,000 horsepower of new compression will be needed to move the gas. It is still to early to determine if the new units will be turbine or internal combustion engine based. All things considered construction would begin in late 2004 with a spring 2005 completion date targeted for the summer cooling season.

Kinder Morgan is one of the largest transporters of natural gas and products in the US. Kinder Morgan, Inc. owns the general partnership interest of Kinder Morgan Energy Partners, LP (Houston Texas) (NYSE:KMP). The two companies have a combined value of $19 billion. Kinder Morgan Energy Partners LP operates over 25,000 miles of pipelines transporting over 2 million barrels per day in refined petroleum products and up to 7.8 Bcf/d of natural gas. Its 70+ terminals handle over 60 million dry goods annually as well as storage capacity for over 55 million barrels of petroleum products.