Kinder Morgan Energy Partners (KMP) said it bought the remaining interest in Mid-Tex Gas Storage Co. LLP (Midtex), which owns the 5 Bcf Markham storage field in Matagorda County, TX, from NiSource for $17.5 million. The deal increases Kinder Morgan’s stake in the project from 68% to 100%.

“We expect this acquisition will be immediately accretive to unitholders, adding stable cash flow through long-term contracts,” said CEO Richard D. Kinder.

KMP’s Texas intrastate pipeline operations consist of 5,800 miles of pipeline with a peak capacity of about 5 Bcf/d and more than 30 Bcf of storage capacity. KMP said it has completed $335 million in acquisitions this year.

In contrast, NiSource has sold off or is in the process of selling all of its unregulated businesses, including exploration and production, telecommunications, pipeline construction, electric generation, propane distribution, water and utility line locating operations. The moves are part of what has become an industry trend of selling off high-risk and costly unregulated operations and focusing on a back-to-basics strategy of optimizing regulated utility and pipeline businesses. NiSource reported a $54.6 million net loss for the first nine months of the year, compared to $290.4 million in net income over the same period in 2002.

The Markham storage field has two salt caverns and a total deliverability of about 500 MMcf/d with capacity to injection about 100 MMcf/d. The storage field is connected to Kinder Morgan Texas Pipeline.

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