* FTC says three U.S. natural gas pipelines must be sold
* Kinder Morgan, El Paso own more than 80,000 miles of pipe
* FTC values deal at $38 billion
* El Paso shareholders approved deal in March
WASHINGTON, May 1 cru Kinder Morgan Inc
has won U.S. approval to buy El Paso Corp on the
condition that it sells three U.S. natural gas pipelines, the
Federal Trade Commission said on Tuesday.
Kinder Morgan, which owns more than 38,000 miles of
pipelines, announced in October that it would buy El Paso.
The FTC valued the deal at $38 billion.
El Paso already owned the largest natural gas pipeline
system in North America, with more than 43,000 miles of pipe.
The combined company will be a pipeline juggernaut with the
ability to deliver massive amounts of crude oil and natural gas
over 80,000 miles of pipe stretching from coast to coast. Some
observers had feared the company would be able to demand higher
transport fees from oil and gas producers.
"We are pleased to receive FTC approval and we look forward
to becoming the largest midstream and the fourth-largest energy
company in North America when the transaction is completed,"
Kinder Morgan Chairman and CEO Richard Kinder said in a
To win antitrust approval for the deal, Kinder Morgan agreed
to sell three pipelines -- and Kinder Morgan Interstate Gas
Transmission pipeline, Trailblazer pipeline and Kinder's 50
percent interest in the Rockies Express pipeline. It also agreed
to sell two gas processing plants in the Rocky Mountain region,
the FTC said.
El Paso shareholders approved the deal in early March.
The companies hope to generate $350 million a year in cost
savings, or about 5 percent of their combined earnings before
interest, taxes, depreciation and amortization, Kinder Morgan
said in March.