Trailblazer Pipeline, expanded and 100% owned by Kinder Morgan Energy Partners LP, went back into service Tuesday carrying KMP’s expectations of significant growth in its natural gas pipelines business segment with the increased capacity to carry gas out of the fast-growing Rockies supply area.

KMP announced last week it had completed its previously announced $68 million purchase of Enron Trailblazer Pipeline Co.’s 33.3% stake in the pipeline. The court overseeing Enron’s bankruptcy approved the transaction on May 2, 2002. And Tuesday Trailblazer placed into service its previously announced $59 million expansion project, which increases transportation capacity on the pipeline by 60% to 846,000 Dth/d, and which has already been fully subscribed by customers.

In the first quarter of 2002, KMP paid $12 million to CIG Trailblazer Company (an affiliate of El Paso Corp.) in exchange for the stake in Trailblazer Pipeline Co. that CIG would have obtained through participation in the expansion.

KMP now owns 100% of the 436-mile interstate natural gas pipeline that runs from Rockport (Weld County), CO to Beatrice (Gage County), NE.

“We are delighted to have sole ownership of Trailblazer Pipeline Co., which provides a critical link between the rapidly growing Rocky Mountain supply basins and eastern markets and has consistently generated significant cash flow,” said Richard D. Kinder, chairman and CEO of KMP. “The acquisition is expected to be immediately accretive to cash available for distribution to unitholders, and completion of the expansion project should result in significant growth on the pipeline. The additional 324,000 Dth of pipeline capacity has already been fully subscribed by customers in the form of long- term, firm-transportation contracts.”

The expansion project began in August of 2001, as growth in Rocky Mountain natural gas supplies created the need for additional pipeline transportation infrastructure. The expansion project included installing two new compressor stations and adding 10,000 additional horsepower at an existing compressor station.

KMP first acquired an interest in Trailblazer in the fourth quarter of 1999, when it purchased a 33.3% interest from an affiliate of Columbia Energy, and acquired another 33.3% interest from Kinder Morgan, Inc., the parent company of its general partner.

KMP is the nation’s largest pipeline master limited partnership with an enterprise value of over $9 billion. It owns and operates more than 25,000 miles of pipelines and over 70 terminals. Its pipelines transport more than two million bbl/d of gasoline and other petroleum products and up to 7.8 Bcf/d of natural gas. Its terminals handle over 55 million tons of coal and other dry-bulk materials annually and have a liquids storage capacity of approximately 55 million barrels for petroleum products and chemicals. KMP is also the leading provider in the U.S. of CO2, which is used in enhanced oil recovery projects.

The general partner of KMP is owned by Kinder Morgan, Inc., one of the largest midstream energy companies in America. Combined, the two companies have an enterprise value of approximately $19 billion.

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