Kinder Morgan Transfers $300M in Assets to MLP

Kinder Morgan, Inc. announced plans to contribute $300 million in assets to 
Kinder Morgan Energy Partners, L.P., the company's master limited 
partnership. The largest asset to be contributed is Kinder Morgan Texas 
Pipeline, formerly MidCon Texas, a 2,600-mile natural gas pipeline system 
that extends from South Texas to Houston along the Texas Gulf Coast. 

Other assets include the Casper and Douglas Gas Gathering and Processing 
Systems, KMI's 50% interest in Coyote Gas Treating and KMI's 25% interest in 
Thunder Creek Gas Services. As consideration for the assets, KMI will receive 
$300 million, 50% in cash and 50% in KMP partnership units. KMI expects the 
transaction to be completed in the fourth quarter. 

"This transaction represents a true win-win for both KMI and KMP," said 
Kinder Morgan CEO Rich Kinder. "It is expected to be accretive to cash 
available for distribution to KMP's unitholders by between 5-10 cents in 
2001. The pipeline assets are a good fit for KMP because they complement 
existing KMP assets, have long-term contracts in place and offer significant 
growth opportunities." Kinder noted that because the mix of consideration 
paid will include equity issued to KMI, it will not be necessary to raise 
funds for the transaction via a public offering of KMP units. 

"KMI will also benefit from the transaction, as it will be able to reduce its 
debt by $150 million," Kinder said. "Additionally, the transaction is 
expected to be modestly accretive to KMI's earnings per share in 2001. By 
increasing its stake in the master limited partnership, KMI will enjoy 
greater participation in the expected future growth of KMP." 

Upon closing, KMP will have completed in excess of $600 million of 
acquisitions in 2000. In addition, this transaction will boost KMI's total 
asset contribution to KMP to more than $1 billion, far exceeding the original 
goal stipulated when Kinder Morgan merged with KN Energy last July.