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The Wall Street Journal: Kinder Morgan to Sell Pipeline

By JOHN MORITSUGU

Inter Pipeline Fund said Monday it has agreed to acquire the Corridor Pipeline System from an affiliate of Kinder Morgan Inc. for $760 million Canadian (US$646 million) including debt.

The Canadian fund said Corridor is the sole transporter of diluted bitumen and related products produced by the Athabasca Oil Sands Project, an oil-sands operations owned by Shell Canada Energy, Chevron Canada Ltd. and Western Oil Sands LP (Western).

Inter said the purchase price is subject to closing adjustments. It said funding for the acquisition will be provided from Inter Pipeline’s existing bank-credit facilities and the assumption of about $411 million of existing debt.

Inter said it will also assume responsibility for the completion of an estimated $1.53 billion expansion of Corridor. This project, which currently is under construction, will allow diluted bitumen capacity on the Corridor system to increase to about 465,000 barrels a day from its current capacity of 280,000 barrels.

“While Corridor is an operationally sound and strategically located pipeline, the sale of this asset will enable us to reduce debt and focus on other exciting growth opportunities,” said Richard D. Kinder, chairman and chief executive of Houston-based Kinder Morgan.

March 5, 2007 11:24 a.m.
Write to John Moritsugu at [email protected]

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