Kinder Morgan Inc. (KMI) CEO Rich Kinder, who put together a mega-deal to take the pipeline company private, said Wednesday he expects to have a final decision on the buyout from California regulators on May 24.

The Houston-based company only requires approval from the California Public Utilities Commission to close the deal, Kinder said (see Daily GPI, March 5). The termination date for KMI going private had been extended to Aug. 28.

KMI is being purchased by a group of investors, including Kinder, co-founder Bill Morgan, current board members Fayez Sarofim and Mike Morgan and affiliates of Goldman Sachs Capital Partners, American International Group, Inc., The Carlyle Group and Riverstone Holdings LLC.

Because of the buyout, KMI did not release full 1Q2007 results because it is expected to go private in the second quarter. However, Kinder said KMI's quarterly results were slightly ahead of those reported in 1Q2006.

KMI's master limited partnership, Kinder Morgan Energy Partners (KMP), reported that refinancing debt at the Red Cedar Gathering Co., as well as insurance costs and recoveries associated with Hurricanes Katrina and Rita, sent earnings to a net loss of $1.4 million in 1Q2007. The quarterly distributable cash flow fell 1% from a year ago, to $185.8 million versus $187.6 million in 1Q2006.

KMP owns a 49% interest in the Red Cedar system, which is located in the Northern San Juan Basin. The system handles 700 MMcf/d of conventional and coalbed methane gas from more than 700 producing wells. Red Cedar, based in Durango, CO, is jointly owned by KMP and the Southern Ute Indian Tribe. Red Cedar facilities include more than 800 miles of gathering pipe, 19 compressor stations housing 59 units of field compression totaling more than 80,000 installed horsepower and a 230 MMcf/d carbon dioxide treating plant.

Kinder, who helms the partnership, said KMP was continuing to make progress on several large infrastructure projects to position it for growth, including a plan to invest $6 billion in new expansion over the next four years.

KMP began service on the second segment of the first leg of the Rockies Express Pipeline (REX), a 192-mile section of 42-inch diameter pipeline from the Wamsutter Hub in Wyoming to the Cheyenne Hub in Colorado. About 328 miles of the project, which originated at the Meeker Hub in Colorado, are now in service, transporting up to 500,000 Dth/d. The Federal Energy Regulatory Commission (FERC) recently issued a favorable final environmental review for the next 713-mile segment of the project, which will run from Weld County, CO, to Audrain County, MO (see Daily GPI, March 19). REX-West, which expects to receive the FERC certificate this week to allow construction to begin, is expected to be in service in January 2008.

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