Kinder Morgan Energy Partners LP (KMP) said Monday it has been notified by federal investigators that they are conducting an informal probe of the company’s accounting treatment of its purchase of Tejas Gas LLC.

Specifically, the staff of the Securities and Exchange Commission (SEC) is questioning the way the Houston-based company allocated the purchase price between assets and goodwill in connection with KMP’s acquisition of Tejas Gas last January. The SEC has not claimed that KMP acted improperly or illegally, the company said.

KMP, a unit of Kinder Morgan Inc, is the largest publicly traded pipeline limited partnership in the United States, transporting up to 7.8 Bcf/d of natural gas, 2 million bbl/d of gasoline and other petroleum products. It has an enterprise value of $9 billion.

KMP purchased Tejas Gas for $728 million in cash and $158 million of assumed debt. KMP said it allocated about $56 million to current assets, $674 million to property plant and equipment, including cushion gas, and $155 million to goodwill. The allocations were based on a valuation analysis of an independent appraiser and also were reviewed by KMP’s independent auditors, the company said.

If the SEC orders the company to adjust the allocation of the Tejas Gas purchase price, KMP said it “would not have an effect on cash available for distributions to KMP’s limited partners.” Rather, an adjustment would “either increase or decrease depreciation and amortization expense with a corresponding increase or decrease in net income,” the company noted.

“We do not believe an examination of this issue will result in a material change to our financial statements,” said Kinder Morgan Chairman Richard D. Kinder.

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