Taking yet another step in stabilizing the company’s financials through the divestiture of assets, CMS Energy Corp.’s pipeline subsidiary, CMS Panhandle Eastern Pipe Line Co., said it has entered into a definitive agreement to sell its one-third equity interest in Centennial Pipeline LLC to Centennial’s two other partners for $40 million.

Centennial is a 795-mile pipeline with the capacity to transport more than 210,000 b/d of refined petroleum products such as gasoline and diesel fuel from the Gulf Coast to the Midwest.

Marathon Ashland Petroleum LLC and TE Products Pipeline Co., LP, through its general partner, Texas Eastern Products Pipeline Company, LLC (TEPPCO), will each have a 50% ownership in Centennial Pipeline upon the closing of the transaction. CMS said the sale is scheduled to close in mid-February 2003.

In late December, CMS Energy announced the sale of CMS Panhandle Companies to Southern Union Corp. as a part of the corporation’s ongoing asset sales program. In the announcement, CMS Energy it planned to pursue the sale of CMS Panhandle’s interests in Centennial Pipeline and Guardian pipeline separately. The company noted that the asset sales program is part of its “continuing efforts” to strengthen its balance sheet and liquidity.

“This sale is another step in our continuing efforts to increase the company’s financial flexibility through our back-to-basics strategy,” said CMS Energy CEO Ken Whipple. “With this agreement, CMS Energy has sold or announced asset sales of more than $3.6 billion since the beginning of 2002. We will continue to take steps to strengthen the balance sheet and liquidity so we are in a better position to meet the challenges facing our company and our industry.”

On Centennial, shippers can deliver refined petroleum products from origination points along the U.S. Gulf Coast to Midwest markets served by the Marathon Ashland Pipe Line and the TEPPCO systems, as well as to markets further east that are served by those pipeline systems.

The Guardian pipeline is a natural gas pipe that serves northern Illinois and southern Wisconsin in which CMS Panhandle has a one-third equity interest. CMS Panhandle operates Guardian Pipeline for the partnership.

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