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Kinder Morgan to Move Aux Sable Liquids

Kinder Morgan to Move Aux Sable Liquids

Kinder Morgan Energy Partners LP will provide pipeline transportation services for Aux Sable Liquid Products LP in the Chicago area for liquids from Alliance Pipeline. Aux Sable is constructing natural gas liquids (NGL) extraction and fractionation facilities in Channahon, IL, about two miles east of Kinder Morgan's Morris, IL, liquids pipeline, storage and truck loading facility. Aux Sable's facilities will initially process up to 1.6 Bcf/d from Alliance and remove from the gas stream up to 40,000 barrels of ethane, 19,000 barrels of propane, 8,000 barrels of butane (both normal butane and isobutane) and 3,000 barrels of natural gasoline. The facilities are targeted for completion by Oct. 1, 2000.

Kinder Morgan will modify its pipeline system and its Morris and Lemont, IL, facilities to transport NGLs Aux Sable extracts from the Alliance system. Kinder Morgan plans to complete modifications by Oct. 1, 2000.

"We hope to obviously move most of the NGLs in that immediate Chicago area," said Larry Payne, Aux Sable general manager. Some of the propane will move out of a private terminal south of Chicago to various customers on the Texas Eastern Transmission products pipeline. Some product will move through the old MAPCO (Mid American Pipeline) system, now a part of Williams.

A majority of the NGLs will be sold under contract with spot sales used for balancing, Payne said, with most of the contracts to be written around March.

"This will complete another step in the process of Aux Sable becoming a major supplier of natural gas liquids in the area with transportation in place to provide reliable service to customers," said Payne. "We are likewise delighted to play an integral role in Aux Sable's project in the Chicago area," said Rich Kinder, CEO of Kinder Morgan.

Kinder Morgan, which has an enterprise value of about $2.9 billion, owns and operates one of the largest product pipeline systems in the nation, spanning 16 states with more than 5,000 miles of pipeline and twenty associated terminals.

Aux Sable Liquid Products LP through its managing general partner, Aux Sable Liquid Products Inc., will operate the processing plant and handle marketing of all production from the plant. Gas for the facility will be delivered through the affiliated Alliance Pipeline system originating in western Canada.

Investors in the Aux Sable Liquid Products LP include affiliates of Duke Energy Corp., Enbridge Inc., Fort Chicago Energy Partners LP, The Coastal Corp., The Williams Companies Inc., and Westcoast Energy Inc.

Joe Fisher

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