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FOR IMMEDIATE RELEASE

Kinder Morgan, MarkWest Utica EMG Announce Plans to Form Joint Venture to Support Northern Ohio Rich-Gas Development and NGL Takeaway from the Utica and Marcellus Shale Resource Plays

 

HOUSTON -- August 7, 2013 -- Kinder Morgan Energy Partners, L.P. (NYSE: KMP) (Kinder Morgan), and MarkWest Utica EMG, L.L.C. (MarkWest Utica EMG), a joint venture between MarkWest Energy Partners, L.P. (NYSE: MWE) (MarkWest) and The Energy and Minerals Group (EMG) today announced they have signed a letter of intent to form a midstream joint venture (JV) to pursue two critical new projects to support producers in the Utica and Marcellus shales in Ohio, Pennsylvania and West Virginia. The first project consists of the development of a 400 million-cubic-foot-per-day (MMcf/d) cryogenic processing complex in Tuscarawas County, Ohio, utilizing an existing, 220-acre site that Kinder Morgan has under option. The second project consists of the development of an initial, 200,000 barrels-per-day (bpd), C2+ natural gas liquids (NGL) pipeline that originates at the planned JV processing facilities in Ohio and transports NGLs to Gulf Coast fractionation facilities.

Key elements of the processing complex project include:

  • MarkWest Utica EMG would anchor the JV’s first of two planned 200 MMcf/d cryogenic processing plants to be constructed on Kinder Morgan’s existing 220-acre site in Tuscarawas County, Ohio (JV processing complex). The JV would expect the initial 200 MMcf/d cryogenic processing plant to be in service by the fourth quarter of 2014 with the second 200 MMcf/d plant in-service shortly thereafter, subject to timing of customer commitments. The existing 220-acre site is expandable and could accommodate more than 1 billion cubic feet per day of processing capacity;
  • MarkWest Utica EMG would deliver rich-gas volumes to the JV processing complex through an extension of its existing rich-gas gathering system in Harrison, Belmont, Guernsey, Noble and Monroe counties in Ohio. The JV processing complex would provide MarkWest Utica EMG’s producer customers with additional residue outlets into the Tennessee Gas Pipeline and Dominion Transmission pipeline systems;
  • The JV processing complex would serve new customers in Carroll, Columbiana, Mahoning and Trumbull counties in northern Ohio and provide a critical full-service solution, which includes gas processing, NGL transportation and fractionation and residue gas outlets;
  • To deliver the northern Utica gas to the processing complex, Kinder Morgan has obtained regulatory approval to convert a portion of an existing 26-inch Tennessee Gas Pipeline Company, L.L.C. pipeline into rich-gas gathering service, which could begin receiving rich-gas by the fourth quarter of 2014;
  • The JV would construct a new pipeline to deliver NGLs produced at the JV processing complex into MarkWest and MarkWest Utica EMG’s extensive NGL gathering network for short-term and long-term fractionation at its Ohio and Pennsylvania fractionation and marketing complexes;
  • The JV would own the processing complex on a 50-50 basis and MarkWest Utica EMG would operate the facilities;

Key elements of the NGL pipeline project include:

  • Kinder Morgan and MarkWest Utica EMG will develop a NGL pipeline project from the tailgate of the JV processing complex to Gulf Coast fractionation facilities through the conversion of over 900 miles of Kinder Morgan’s 24-inch and 26-inch Tennessee Gas Pipeline system currently in natural gas service from Tuscarawas County, Ohio to Natchitoches, La., and the construction of approximately 200 miles of new NGL pipeline from Natchitoches to Mont Belvieu, Tex., and/or south Louisiana. Kinder Morgan and MarkWest Utica EMG are evaluating constructing new fractionation facilities, as well as utilizing third-party fractionation facilities throughout the Gulf Coast;
  • The proposed NGL pipeline would access MarkWest and MarkWest Utica EMG’s extensive NGL pipeline network that extends throughout the rich-gas areas of the Marcellus and southern Utica to deliver NGLs to the new NGL pipeline;
  • By converting over 900 miles of existing Tennessee Gas Pipeline assets and utilizing MarkWest and MarkWest Utica EMG’s existing NGL network, the JV parties believe their NGL pipeline is best positioned to provide the most cost effective Y-grade outlet from the Utica and Marcellus shale plays to the Gulf Coast area markets;
  • The NGL pipeline would be expandable to 400,000 bpd with the addition of pump stations;
  • Subject to sufficient shipper commitments, permitting and all related regulatory approvals, a fourth quarter 2015 in-service date for the NGL pipeline is anticipated.
  • Kinder Morgan would own at least 75 percent of the NGL pipeline and MarkWest Utica EMG would have the option to invest up to 25 percent. Kinder Morgan would operate the pipeline.

“We are pleased to announce this exciting joint venture with MarkWest in the Utica and Marcellus shale resource plays,” said Kinder Morgan Chairman and CEO Richard D. Kinder. “The combination of Kinder Morgan’s strategically located and existing pipeline assets that traverse through the heart of the Utica and Marcellus shale plays, along with MarkWest’s existing and significant midstream footprint throughout the Utica and Marcellus shale plays, should provide significant growth opportunities for the JV.”

“We are excited to partner with Kinder Morgan in this unique opportunity that supports the development of industry-leading midstream solutions,” said MarkWest Chairman, President and Chief Executive Officer Frank Semple. “The JV processing complex expands our footprint into northern Ohio and complements our existing full-service midstream infrastructure in Ohio, West Virginia and Pennsylvania. The planned joint venture Y-grade pipeline will be by far the most efficient project for the Marcellus and Utica producers to access the Gulf Coast NGL markets and is another critical step in support of our long-term objective of providing our producer customers with multiple market options and maximum value for their natural gas and natural gas liquid production.”

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline transportation and energy storage company and one of the largest publicly traded pipeline limited partnerships in America. It owns an interest in or operates more than 54,000 miles of pipelines and 180 terminals. The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI). Kinder Morgan is the largest midstream and the third largest energy company in North America with a combined enterprise value of approximately $115 billion. It owns an interest in or operates more than 82,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. KMI owns the general partner interests of KMP and El Paso Pipeline Partners, L.P. (NYSE: EPB), along with limited partner interests in KMP and EPB and shares in Kinder Morgan Management, LLC (NYSE: KMR). For more information please visit www.kindermorgan.com.

MarkWest Energy Partners, L.P. is a master limited partnership engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids; and the gathering and transportation of crude oil. MarkWest has a leading presence in many unconventional gas plays including the Marcellus Shale, Utica Shale, Huron/Berea Shale, Haynesville Shale, Woodford Shale and Granite Wash formation.

The Energy & Minerals Group is a highly specialized private equity firm that focuses exclusively on investing across various facets of the global natural resource industry that are integral to the global economy. EMG has $6.2 billion of total investor commitments (including co-investments) with in excess of $3.2 billion deployed across the energy complex since inception.

For additional information on EMG, please contact Alexandra Coolidge at 713-579-5029.

Kinder Morgan Cautionary Language:
This news release includes forward-looking statements. These forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although Kinder Morgan believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include those enumerated in Kinder Morgan’s reports filed with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date they were made, and except to the extent required by law, Kinder Morgan undertakes no obligation to update or review any forward-looking statement because of new information, future events or other factors. Because of these uncertainties, readers should not place undue reliance on these forward-looking statements.

MarkWest Cautionary Language:
This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although MarkWest believes that the expectations reflected in the forward-looking statements are reasonable, MarkWest can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission (SEC). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports filed with the SEC, including MarkWest’s Annual Report on Form 10-K for the year ended December 31, 2012 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” MarkWest does not undertake any duty to update any forward-looking statement except as required by law.

Contacts

Kinder Morgan:
Media Relations
Richard Wheatley, (713) 420-6828
richard_wheatley@kindermorgan.com
or
Investor Relations
(713) 369-9490
km_IR@kindermorgan.com
www.kindermorgan.com
or

MarkWest:
Frank Semple, 866-858-0482
Chairman, President & CEO
or
Nancy Buese, 866-858-0482
Executive VP & CFO
or
Josh Hallenbeck, 866-858-0482
VP of Finance & Treasurer
investorrelations@markwest.com

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