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Kinder Morgan Inks Deal to Supply CenterPoint with Transport, Storage

Kinder Morgan Energy Partners LP last Tuesday announced it signed a long-term agreement to supply CenterPoint Energy Resources Corp. with firm natural gas transportation and storage services through its Texas intrastate pipeline system beginning next April.

CenterPoint Energy, a Houston-based utility, has contracted for 1 Bcf/d of transportation capacity and 16 Bcf of storage capacity, effective April 1, 2007, Kinder Morgan reported. As a result of the deal, Kinder Morgan "will become the main transporter of natural gas for the Houston area's largest local distribution company," said CEO Richard D. Kinder.

Kinder noted that Kinder Morgan Energy Partners also is pursuing projects to expand the transportation and storage capabilities of the Texas intrastate system to take advantage of increasing gas production in East Texas and pending liquefied natural gas supplies targeted for the Texas Gulf Coast, and that the company's relationship with CenterPoint Energy will help facilitate those efforts.

Last Monday, Kinder Morgan Energy Partners launched a nonbinding open season for its proposed Kinder Morgan MidContinent Express Pipeline, a 780-mile, $1.5-2.0 billion pipe designed to provide takeaway capacity from several constrained producing areas, including the Anadarko Basin in western Oklahoma and the Texas Panhandle. The project, which would transport up to 1.5 Bcf/d, is targeted for in-service in late 2008.

Houston-based Kinder Morgan Energy Partners is one of the largest publicly traded pipeline limited partnerships in the United States and owns or operates up to 9 Bcf/d of natural gas capacity, along with petroleum product pipelines and product/chemicals/coal storage terminals.

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