Full Description

Kinder Morgan Energy Partners, L.P. (KMP) is a pipeline transportation and energy storage company in North America. The Company owns an interest in or operate more than 26,000 miles of pipelines and approximately 170 terminals. The pipelines transport natural gas, gasoline, crude oil, carbon dioxide and other products, and the terminals store petroleum products and chemicals and handle bulk materials like coal and petroleum coke. KMP is also a provider of carbon dioxide for the oil recovery projects in North America. The Company operates in five business segments: product pipelines, natural gas pipelines, CO2 , terminals and Kinder Morgan Canada. On April 1, 2008, the Company sold its 25% equity ownership interest in Thunder Creek Gas Services, LLC to PVR Midstream LLC, subsidiary of Penn Virginia Corporation. In October 2009, Crosstex Energy, L.P. and Crosstex Energy, Inc. completed the sale of its natural gas treating business to Kinder Morgan Energy Partners, L.P.

Product Pipelines

The product pipelines segment consists of approximately 8,300 miles of refined petroleum products pipelines that deliver gasoline, diesel fuel, jet fuel and natural gas liquids to various markets, approximately 60 associated product terminals and petroleum pipeline transmix processing facilities serving customers across the United States. The product pipelines segment consists of the refined petroleum products and natural gas liquids pipelines and their associated terminals, southeast terminals and the transmix processing facilities.

The West Coast Products pipelines operations include the SFPP, L.P. operations, Calnev Pipeline operations and West Coast terminals operations. The SFPP, L.P. operations, serve six western states with approximately 3,100 miles of refined petroleum products pipelines and related terminal facilities that provide refined products to major population centers in the United States, including California; Las Vegas and Reno, Nevada, and the Phoenix-Tucson, Arizona corridor. During the year ended December 31, 2008, the three products transported by the Company were gasoline, diesel fuel and jet fuel.

The Calnev Pipeline consists of two parallel 248-mile, 14-inch and 8-inch diameter pipelines that run from the facilities at Colton, California to Las Vegas, Nevada. The pipeline serves the Mojave Desert through deliveries to a terminal at Barstow California and two nearby major railroad yards. It also serves Nellis Air Force Base, located in Las Vegas, and also includes approximately 55 miles of pipeline serving Edwards Air Force Base.

The West Coast Products Pipelines operations include 15 truck-loading terminals with anaggregate usable tankage capacity of approximately 14.9 million barrels. The truck terminals provide services, including short-term product storage, truck loading, vapor handling, additive injection, dye injection and ethanol blending. The West Coast terminals located in the Seattle, Portland, San Francisco and Los Angeles areas along the west coast of the United States with a combined total capacity of approximately 8.4 million barrels of storage for both petroleum products and chemicals.

The Company owns approximately 51% of Plantation Pipe Line Company (Plantation), a 3,100-mile refined petroleum products pipeline system serving the south-eastern United States. Plantation serves as a common carrier of refined petroleum products to various metropolitan areas, including Birmingham, Alabama; Atlanta, Georgia; Charlotte, North Carolina; and the Washington, D.C. area. In 2008, Plantation delivered average of 480,341 barrels per day of refined petroleum products.

The Central Florida pipeline system consists of a110-mile, 16-inch diameter pipeline that transports gasoline and ethanol, and an 85-mile, 10-inch diameter pipeline that transports diesel fuel and jet fuel from Tampa to Orlando, with an intermediate delivery point on the 10-inch pipeline at Intercession City, Florida. In addition to being connected to the Tampa terminal, the pipeline system is connected to terminals owned and operated by TransMontaigne, Citgo, BP, and Marathon Petroleum. The 10-inch diameter pipeline is connected to the Taft, Florida terminal (located near Orlando) and is also the pipeline supplying jet fuel to the Orlando International Airport in Orlando, Florida. In 2008, the pipeline system transported approximately 106,700 barrels per day of refined products, with the product mix being approximately 68% gasoline, 12% diesel fuel, and 20% jet fuel.

The Cochin pipeline system consists of an approximate 1,900-mile, 12-inch diameter multi-product pipeline operating between Fort Saskatchewan, Alberta and Windsor, Ontario, including five terminals. It includes 31 pump stations spaced at 60 mile intervals and five United States propane terminals. In 2008, the pipeline system transported approximately 30,800 barrels per day of natural gas liquids.

The Cypress pipeline is an interstate common carrier natural gas liquids pipeline originating at storage facilities in Mont Belvieu, Texas and extending 104 miles east to a petrochemical producer in the Lake Charles, Louisiana area. Mont Belvieu, located approximately 20 miles east of Houston. In 2008, the pipeline system transported approximately 43,900 barrels per day of refined petroleum products.

The Southeast terminal operations consist of Kinder Morgan Southeast Terminals LLC (KMST) and its consolidated affiliate, Guilford County Terminal Company, LLC. KMST was formed for the purpose of acquiring and operating high-quality liquid petroleum products terminals located along the Plantation/Colonial pipeline corridor in the Southeastern United States.

TheTransmix operations include the processing of petroleum pipeline transmix, a blend of dissimilar refined petroleum products that have become co-mingled in the pipeline transportation process. During pipeline transportation, different products are transported through the pipelines abutting each other, and generate a volume of different mixed products called transmix. At the transmix processing facility, the Company processes and separates pipeline transmix into pipeline-quality gasoline and light distillate products. It process transmix at six separate processing facilities located in Colton, California; Richmond, Virginia; Dorsey Junction, Maryland; Indianola, Pennsylvania; Wood River, Illinois; and Greensboro, North Carolina. The transmix facilities processed approximately 10.4 million barrels of transmix in 2008.

Natural Gas Pipelines

The natural gas pipelines segment contains both interstate and intrastate pipelines. Its primary business consists of natural gas sales, transportation, storage, gathering, processing and treating. Within this segment, the Company owns approximately 14,300 miles of natural gas pipelines and associated storage and supply lines that are located at the center of the North American pipeline grid. The transportation network provides access to the gas supply areas in the western United States, Texas and the Midwest, as well as the consumer markets.

The Texas intrastate natural gas pipeline group, which operates along the Texas Gulf coast consists of four natural gas pipeline systems: Kinder Morgan Texas Pipeline, Kinder Morgan Tejas Pipeline, Mier-Monterrey Mexico Pipeline and Kinder Morgan North Texas Pipeline. TheKinder Morgan Texas Pipeline andKinder Morgan Tejas Pipeline operates as a single pipeline system, providing customers and suppliers with improved flexibility and reliability. The combined system includes approximately 6,000 miles of intrastate natural gas pipelines with a transport and sales capacity of approximately 5.2 billion cubic feet per day of natural gas and approximately 126 billion cubic feet of on-system natural gas storage capacity. In addition, the combined system, through owned assets and contractual arrangements with third parties, has the capability to process 685 million cubic feet per day of natural gas for liquids extraction and to treat approximately 180 million cubic feet per day of natural gas for carbon dioxide removal.

Kinder Morgan Border Pipeline owns and operates an approximately 97-mile, 24-inch diameter pipeline that extends from a point of interconnection with the pipeline facilities of Pemex Gas Y Petroquimica Basica at the International Border between the United States and Mexico in Hidalgo County, Texas, to a point of interconnection with other intrastate pipeline facilities of Kinder Morgan Tejas located at King Ranch, Kleburg County, Texas. The pipeline has a capacity of approximately 300 million cubic feet of natural gas per day and is capable of importing this volume of Mexican gas into the United States or exporting this volume of gas to Mexico.

TheMier-Monterrey Pipeline consists of a 95-mile natural gas pipeline that stretches from the International Border between the United States and Mexico in Starr County, Texas, to Monterrey, Mexico and can transport up to 375 million cubic feet per day. The pipeline connects to a 1,000-megawatt power plant complex and to the PEMEX natural gas transportation system.

The Kinder Morgan North Texas Pipeline consists of an 82-mile pipeline that transports natural gas from an interconnect with the facilities of Natural Gas Pipeline Company of America LLC (NGPL) in Lamar County, Texas to a 1,750-megawatt electric generating facility located in Forney, Texas, 15 miles east of Dallas, Texas. It has the capacity to transport 325 million cubic feet per day of natural gas. The system is bi-directional, permitting deliveries of additional supply from the Barnett Shale area to NGPL’s pipeline, as well as power plants in the area.

The Company also own and operate various gathering systems in South and East Texas. These systems aggregate natural gas supplies into the main transmission pipelines, and in certain cases, aggregate natural gas that must be processed or treated at its own or third-party facilities. The Company own plants that can process up to 135 million cubic feet per day of natural gas for liquids extraction. The Company also owns and operates three natural gas treating plants that provide carbon dioxide and/or hydrogen sulfide removal.

The North Dayton natural gas storage facility, located in Liberty County, Texas, has two existing storage caverns providing approximately 6.3 billion cubic feet of total capacity, consisting of 4.2 billion cubic feet of working capacity and 2.1 billion cubic feet of cushion gas. It also owns the West Clear Lake natural gas storage facility located in Harris County, Texas.

The Western interstate natural gas pipeline group, which operates primarily along the Rocky Mountain region of the Western portion of the United States consists of four natural gas pipeline systems: Kinder Morgan Interstate Gas Transmission Pipeline, Trailblazer Pipeline, Trans Colorado Pipeline, and 51% ownership interest in the Rockies Express Pipeline. Kinder Morgan Interstate Gas Transmission LLC (KMIGT) owns approximately 5,100 miles of transmission lines in Wyoming, Colorado, Kansas, Missouri and Nebraska. The pipeline system is powered by 26 transmission and storage compressor stations with approximately 160,000 horsepower. KMIGT also owns the Huntsman natural gas storage facility, located in Cheyenne County, Nebraska, which has approximately 10 billion cubic feet of firm capacity commitments and provides for withdrawal of up to 169 million cubic feet of natural gas per day. KMIGT also offers its Cheyenne Market Center service, which provides nominated storage and transportation service between its Huntsman storage field and multiple interconnecting pipelines at the Cheyenne Hub, located in Weld County, Colorado.

The Company’s subsidiary Trailblazer Pipeline Company LLC (Trailblazer) owns a 436-mile natural gas pipeline system. Trailblazer’s pipeline originates at an interconnection with Wyoming Interstate Company Limited’s pipeline system near Rockport, Colorado and runs through south-eastern Wyoming to a terminus near Beatrice, Nebraska where it interconnects with NGPL and Northern Natural Gas Company’s pipeline systems.

The Company’s subsidiary TransColorado Gas Transmission Company LLC (TransColorado) owns a 300-mile interstate natural gas pipeline that extends from approximately 20 miles southwest of Meeker, Colorado to Bloomfield, New Mexico. It has multiple points of interconnection with various interstate and intrastate pipelines, gathering systems, and local distribution companies. The pipeline system is powered by eight compressor stations having an aggregate of approximately 40,000 horsepower.

The Company owns and operates 51% of the 1,679-mile Rockies Express Pipeline system. Rockies Express Pipeline’s Zone 2 extends from the Cheyenne Hub to an interconnect with the Panhandle Eastern Pipeline in Audrain County, Missouri.

The Company owns and operates theCasper and Douglas, Wyoming natural gas processing plants, which have the capacity to process up to 185 million cubic feet per day of natural gas depending on raw gas quality. It owns a 49% equity interest in the Red Cedar Gathering Company (Red Cedar). Red Cedar owns and operates natural gas gathering, compression and treating facilities in the Ignacio Blanco Field in La Plata County, Colorado. Red Cedar also owns Coyote Gas Treating, LLC (Coyote Gulch).

CO2

The CO2 segment consists of Kinder Morgan CO2 Company, L.P. and its consolidated affiliates (KMCO2). The CO2 business segment produces, transports and markets carbon dioxide for use in improved oil recovery operations. It also hold ownership interests in several oil-producing fields and own a 450-mile crude oil pipeline, all located in the Permian Basin region of West Texas.

The Company owns approximately 45% of, and operate, the McElmo Dome unit in Colorado, which contains more than nine trillion cubic feet of recoverable carbon dioxide. In 2008, the Company completed the installation of facilities and drilled eight facilities. The Company also owns approximately 11% of the Bravo Dome unit in New Mexico, which contains more than one trillion cubic feet of recoverable carbon dioxide and produces approximately 290 million cubic feet per day. It owns approximately87% of the Doe Canyon Deep unit in Colorado, which contains more than 1.5 trillion cubic feet of carbon dioxide. In 2008, the Company completed the installation of facilities and drilled six wells to produce over 100 million cubic feet per day of carbon dioxide.

As a result of the 50% ownership interest in Cortez Pipeline Company, the Company owns a 50% equity interest in and operate the approximate 500-mile Cortez pipeline. The pipeline carries carbon dioxide from the McElmo Dome and Doe Canyon source fields near Cortez, Colorado to the Denver City, Texas hub. The Cortez pipeline transports over 1.2 billion cubic feet of carbon dioxide per day, including approximately 99% of the carbon dioxide transported downstream on the Central Basin pipeline and the Centerline pipeline.

The Central Basin pipeline consists of approximately 143 miles of pipe and 177 miles of lateral supply lines located in the Permian Basin between Denver City, Texas and McCamey, Texas with a throughput capacity of 700 million cubic feet per day. The Central Basin pipeline interconnects with all three major carbon dioxide supply pipelines from Colorado and New Mexico, namely the Cortez pipeline and the Bravo and Sheep mountain pipelines.

The Centerline pipeline consists of approximately 113 miles of pipe located in the Permian Basin between Denver City, Texas and Snyder, Texas. The pipeline has a capacity of 300 million cubic feet per day. The Company also owns a13% undivided interest in the 218-mile, Bravo pipeline, which delivers carbon dioxide from the Bravo Dome source field in northeast New Mexico to the Denver City hub and has a capacity of more than 350 million cubic feet per day.

In addition, the Company owns approximately 98% of the Canyon Reef Carriers pipeline and approximately 69% of the Pecos pipeline. The Canyon Reef Carriers pipeline extends 139 miles from McCamey, Texas, to the SACROC unit. The pipeline has a capacity of approximately 290 million cubic feet per day and makes deliveries to the SACROC, Sharon Ridge, Cogdell and Reinecke units. The Pecos pipeline is a 25-mile pipeline that runs from McCamey to Iraan, Texas. It has a capacity of approximately 120 million cubic feet per day of carbon dioxide and makes deliveries to the Yates unit. It also owns and operates an approximate 65% gross working interest in the Clintonville oil field unit located in Fisher County, Texas. The Company also operate and owns working interests in the Katz cob Long unit, the Katz Southwest River unit and Katz East River unit.

The Kinder Morgan Wink Pipeline is a 450-mile Texas intrastate crude oil pipeline system consisting of three mainline sections, two gathering systems and numerous truck delivery stations. The segment that runs from Wink to El Paso has a total capacity of 130,000 barrels of crude oil per day. The 20-inch pipeline segment transported approximately 118,000 barrels of oil per day in 2008.

Terminals

The terminals segment includes the operations of the petroleum, chemical and other liquids terminal facilities (other than those included in the products pipelines segment) and all of the coal, petroleum coke, fertilizer, steel, ores and dry-bulk material services, including all transload, engineering, conveying and other in-plant services. In 2008, the segment is composed of approximately 117 owned or operated liquids and bulk terminal facilities, and more than 32 rail transloading and materials handling facilities located throughout the United States, Canada, and the Netherlands.

The liquid terminals operations store refined petroleum products, petrochemicals, industrial chemicals and vegetable oil products in aboveground storage tanks and transfer products to and from pipelines, vessels, tank trucks, tank barges, and tank railcars. The liquids terminals facilities possess liquids storage capacity of approximately 54.2 million barrels, and in 2008, these terminals handled approximately 596 million barrels of petroleum, chemicals and vegetable oil products.

The bulk terminal operations involve dry-bulk material handling services; however, the Company also provide conveyor manufacturing and installation, engineering and design services and in-plant services covering material handling, conveying, maintenance and repair, railcar switching and miscellaneous marine services. The dry-bulk and material transloading facilities handled approximately 99.1 million tons of coal, petroleum coke, fertilizers, steel, ores and other dry-bulk materials in 2008. The Company owns or operates approximately 100 dry-bulk terminals in the United States, Canada and the Netherlands.

The material services operations include rail or truck transloading operations conducted at 32 owned and non-owned facilities. The Burlington Northern Santa Fe, CSX, Norfolk Southern, Union Pacific, Kansas City Southern and A&W railroads provide rail service for these terminal facilities. Approximately 50% of the products handled are liquids, including an entire spectrum of liquid chemicals, and 50% are dry-bulk products. The facilities are equipped for bi-modal operation (rail-to-truck, and truck-to-rail) or connect via pipeline to storage facilities. Several facilities provide railcar storage services. The Company also design and build transloading facilities, perform inventory management services, and provide services, such as blending, heating and sparging. In 2008, the materials services operations handled approximately 348,000 railcars.

Kinder Morgan Canada

The Kinder Morgan Canada business segment includes the Trans Mountain pipeline system, the ownership of a one-third interest in the Express pipeline system and the 25 mile jet fuel pipeline system. The Trans Mountain common carrier pipeline system originates at Edmonton, Alberta and transports crude oil and refined petroleum to destinations in the interior and on the west coast of British Columbia. Trans Mountain’s pipeline is 715 miles in length. Trans Mountain also operates a 5.3 mile spur line from its Sumas Pump Station to the United States– Canada international border where it connects with a 63-mile pipeline system owned and operated by the Company. In 2008, deliveries on Trans Mountain averaged 237,172 barrels per day.

The Company owns a one-third ownership interest in the Express pipeline system. The Express pipeline system is a batch-mode, common-carrier, crude oil pipeline system comprised of the Express Pipeline and the Platte Pipeline, collectively referred to as the Express pipeline system. The approximate 1,700-mile integrated oil transportation pipeline connects Canadian and United States producers to refineries located in the United States Rocky Mountain and Midwest regions.

The Express Pipeline is a 780-mile, 24-inch diameter pipeline that begins at the crude oil pipeline hub at Hardisty, Alberta and terminates at the Casper, Wyoming facilities of the Platte Pipeline. In 2008, the receipts at Hardisty averaged 196,160 barrels per day. The Platte Pipeline is a 926-mile, 20-inch diameter pipeline that runs from the crude oil pipeline hub at Casper, Wyoming to refineries and interconnecting pipelines in the Wood River, Illinois area, and includes related pumping and storage facilities (including tanks). The Platte Pipeline transports crude oil shipped on the Express Pipeline and crude oil produced from the Rocky Mountain area of the United States to markets located in Kansas and Illinois, and to other interconnecting carriers in those areas. The Platte Pipeline has a capacity of 150,000 barrels per day when shipping heavy oil and averaged 133,637 barrels per day east of Casper, Wyoming in 2008.

The Company competes with Magellan Midstream Partners, BP, Motiva, Citgo, Marathon, and Chevron, ConocoPhillips, Gladieux Refining and Williams Energy Services, Merit Energy, El Paso, IMTT, Morgan Stanley, NuStar, Oil Tanking, Teppco and Vopak.