Kinder Morgan Energy Partners will buy natural gas pipeline operator Copano Energy for $3.22 billion to tap into growing demand for infrastructure to transport vast supplies from the shale fields of Texas and Oklahoma.
Private equity firm TPG Capital, Copano’s top shareholder with a stake of more than 14 percent, will get a 41 percent premium to its $300 million investment made in 2010, if the deal goes through.
The deal is the latest in a flurry of multi-billion-dollar takeovers in the U.S. pipeline industry over the past two years as companies rush to cash in on a shortage of pipelines to move gas and gas liquids such as ethane and propane.
The oversupply of gas and gas liquids, largely due to the advent of new drilling methods such as hydraulic fracturing, has also hurt prices.
Many companies have announced plans to build new pipelines, but stricter regulations and environmental concerns have delayed the completion of several projects.
“Copano is already executing on a substantial backlog of expansion projects for which it has secured customer commitments and is exploring a significant amount of projects incremental to these,” said Kinder Morgan Chief Executive Richard Kinder.
“As a result of this acquisition, we will be able to pursue incremental development in the Eagle Ford Shale play in south Texas, gain entry into the Barnett Shale Combo in north Texas and the Mississippi Lime and Woodford Shales in Oklahoma,” CEO Kinder said.
Copano owns an interest in or operates about 6,900 miles of pipelines with capacity of 2.7 billion cubic feet per day (bcf/d) of gas and nine processing plants with more than 1 bcf/d capacity.
Kinder Morgan Energy owns an interest in or runs about 46,000 miles of pipelines that transport gas, gasoline, crude oil and other products, while its 180 terminals store petroleum products, chemicals and such other products.