Kinder Morgan Energy Partners LP (KMP) continued amassing gasassets yesterday, buying an indirect 33.3% interest in TrailblazerPipeline from an affiliate of Columbia Energy Group for $38 millionin cash. The move comes only a week after Kinder Morgan Inc. (KMI),parent of the general partner in KMP, announced plans to transfer$700 million in former KN Energy assets to the company, includinganother 33.3% share in Trailblazer.

“This is another accretive acquisition for KMP,” said Richard D.Kinder, Chairman and CEO of Kinder Morgan. “Trailblazer generatessecure cash flow and has significant opportunities to benefit fromexpected growth in the Rockies.”

Trailblazer is an Illinois partnership that owns and operates a436-mile, 36-inch diameter gas pipeline that extends from Coloradothrough southeastern Wyoming to Beatrice, NE, where it connectswith Kinder Morgan’s Natural Gas Pipeline Co. of American andEnron’s Northern Natural Gas. The pipeline has a design capacity of492 MMcf/d.

KMI currently owns an additional 33.3% of Trailblazer. Enronowns the other 33.3%. On Dec. 15, KMI announced its intention totransfer its interest in Trailblazer to KMP as part of a largertransaction. Once the transfer from KMI is complete, KMP will own66.66% of the company.

Columbia said the sale is part of its current re-evaluation ofits assets and operations. It is in the midst of defending againsta hostile takeover by NiSource Inc. and is evaluating all options,including a potential sale of all or part of the company.

“As part of our regular, ongoing evaluation of our operationsand assets, it became apparent that Trailblazer was no longerstrategic to our business,” explained Terrance L. McGill, ColumbiaGulf’s president. Columbia Gulf operates a 4,200-mile interstatenatural gas pipeline system which is capable of transporting 2Bcf/d of gas from the Gulf of Mexico to a connection with itssister pipeline, Columbia Gas, which extends to the Northeast.

In the Midwest Kinder Morgan’s Natural Gas Pipeline (NGPL) alsomade the news yesterday, signing a four-year contract fortransportation and storage services for four new electricgenerating plants being built by Ameren Corp. in Illinois. The fourplants, slated to have initial generating capacity of 1,700 MW,will use up to 245,000 MMBtu/d beginning April 1, 2000. That isabout 14% of the capacity of NGPL’s Gulf Coast line.

Ameren is building the power units along NGPL’s system. Thepipeline company will design, construct and operate new lateral andmeasurement facilities to connect the plants.

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