HOUSTON--(BUSINESS WIRE)--Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced that El Paso Natural Gas Company (EPNG) has entered into a 21-year firm transportation agreement with Mexico’s Comisión Federal de Electricidad (CFE) to initially provide approximately 163,000 dekatherms per day (Dth/d) of firm transportation capacity by October 2014, ramping up to 200,000 Dth/d by October 2017 and 550,000 Dth/d by October 2020. The phased capacity increases will be accomplished using existing and expansion capacity on the EPNG system. As previously announced, capital expenditures are estimated at approximately $529 million.
Engineering and procurement activities have begun on the first phase of work, which involves system improvements to deliver volumes to the Sierrita Pipeline near Tucson by October 2014. The second phase will result in incremental deliveries of natural gas to the Sierrita Pipeline and to California, and is expected to be completed by October 2020. The Sierrita Pipeline is expected to be in service in September of this year.
“This firm transportation agreement will help CFE to realize its goal of converting numerous fuel oil-powered generation plants throughout Mexico to natural gas, as well as provide transportation for a number of new gas-fired plants currently under development,” said West Region Gas Pipeline President Mark Kissel.
The agreement provides for deliveries primarily to a new point of interconnection with the Sierrita Pipeline project along EPNG’s South Mainline and also to California.
Transportation service will be provided by utilizing existing capacity available on EPNG’s North Mainline, along with undertaking certain system upgrades to enhance deliverability to the South Mainline. In order to facilitate the full 550,000 Dth/d of service by October 2020, EPNG is planning an expansion that would consist of looping its Havasu Crossover line and installing new compression, as well as undertaking modifications at several existing compressor stations to facilitate west-to-east flow along the South Mainline. This project is included in KMP’s $15.4 billion backlog, and the associated volume was included in the 4.8 billion cubic feet of executed and pending firm transport commitments described in KMP’s second quarter earnings release.
Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline transportation and energy storage company and one of the largest publicly traded pipeline limited partnerships in America. It owns an interest in or operates approximately 54,000 miles of pipelines and 180 terminals. The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI). Kinder Morgan is the largest midstream and the fourth largest energy company in North America with a combined enterprise value of approximately $110 billion. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. KMI owns the general partner interests of KMP and El Paso Pipeline Partners, L.P. (NYSE: EPB), along with limited partner interests in KMP and EPB and shares in Kinder Morgan Management, LLC (NYSE: KMR). For more information please visit www.kindermorgan.com.
This news release includes forward-looking statements. These forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although Kinder Morgan believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include those enumerated in Kinder Morgan’s reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, Kinder Morgan undertakes no obligation to update or review any forward-looking statement because of new information, future events or other factors. Because of these uncertainties, readers should not place undue reliance on these forward-looking statements.