Coal

Kinder Morgan Energy Partners restarts Ariz. pipeline


HOUSTON, Aug. 25, 2003 — Kinder Morgan Energy Partners L.P. restarted its Tucson to Phoenix, Ariz., pipeline Sunday morning.

Restoring service on this line provides KMP the capacity to transport approximately 183,000 barrels per day (bpd) of gasoline, jet fuel and diesel fuel to Phoenix, which exceeds the average daily demand in the Phoenix market of 175,000 bpd that KMP transported to Phoenix before one of its pipelines was temporarily shut down.

KMP was able to restart the pipeline by reversing the flow on its 6-inch Phoenix to Tucson pipeline and connecting a section of that line to bypass the 4-mile section of the 8-inch Tucson to Phoenix pipeline that did not pass the initial hydrostatic test.

“In the past 48 hours, we displaced product to Tucson from the 6-inch pipeline, performed a successful hydrostatic test on the 6-inch pipeline, laid crossover connections and restarted the pipeline,” said Tom Bannigan, president of KMP’s products pipelines. “We have been working nonstop to increase gasoline volumes to our Arizona customers, with safety as our top priority.” The bypass provides KMP the capacity to transport 35,000 bpd of fuel from Tucson to Phoenix and should soon eliminate the need for companies to truck fuels to Phoenix from Tucson and other locations.

Prior to the pipeline rupture on July 30, KMP typically transported approximately 175,000 bpd to the Phoenix market, about 121,000 bpd on the Los Angeles to Phoenix (West Line) pipeline and 54,000 bpd on the Tucson to Phoenix pipeline. Following the rupture, capacity on the West Line allowed volumes to increase to about 148,000 bpd. With the bypass complete, KMP still has the capacity to transport approximately 148,000 bpd on the West Line and 35,000 bpd on the Tucson to Phoenix line.

Fuel supplies to the Tucson market will be unaffected by the reversal of the 6-inch pipeline segment from Phoenix to Tucson. The 6-inch line currently moves conventional gasoline (non-CBG gasoline), diesel fuel and jet fuel to Tucson. These products can be supplied by shippers transporting products from the El Paso area to Tucson on other KMP pipelines.

KMP owns and operates pipelines that transport and terminals that store refined petroleum products. The company does not own the trucks that deliver the products to retail distribution outlets. In addition, KMP does not own the commodity and has no control over prices charged in the marketplace or to whom its customers sell products.

Following the initial pipeline rupture on July 30, the Tucson to Phoenix pipeline began operating at reduced pressure Aug. 1, pending further investigation. The company voluntarily shut down the pipeline again Friday, Aug. 8, when initial test results showed a pipe defect as the cause of the incident.

The Tucson to Phoenix pipeline can transport up to 60,000 bpd and is part of KMP’s Pacific operations, a 3,850-mile common-carrier pipeline system that transports refined petroleum products in California and neighboring western states.

Kinder Morgan Energy Partners, L. P. is the largest publicly traded pipeline limited partnership in the United States in terms of market capitalization and the largest independent refined petroleum products pipeline system in the U.S. in terms of volumes delivered. KMP owns or operates more than 25,000 miles of pipelines and approximately 80 terminals. Its pipelines transport more than two million barrels per day of gasoline and other petroleum products and up to 7.8 billion cubic feet per day of natural gas. Its terminals handle over 60 million tons of coal and other dry-bulk materials annually and have a liquids storage capacity of approximately 55 million barrels for petroleum products and chemicals. KMP is also the leading provider of CO2 for enhanced oil recovery projects in the United States.

The general partner of KMP is owned by Kinder Morgan, Inc., one of the largest energy transportation and storage companies in America. Combined, the two companies have an enterprise value of approximately $21 billion.