El Paso Energy to Acquire El Paso Corp. Pipeline Assets
El Paso Energy Partners LP plans to buy $750 million of natural gas pipelines and energy assets from El Paso Corp. to boost dividends. The purchase consists of 10,677 miles of gas pipelines in Texas, gas gathering systems in southwest Texas and a stake in a southeastern New Mexico natural gas plant. El Paso Energy will pay $560 million in cash and $190 million in assets.
The earning power of the assets will allow El Paso Energy to raise its dividend this year by 10 cents a unit to $2.60. The increase marks the fourth time in 12 months El Paso Energy has raised the dividend on its partnership units, which work like shares.
El Paso Corp., the largest U.S. pipeline operator, formed El Paso Energy, a master limited partnership, in 1998 to give investors a chance to buy a stake in the company's gas storage, gathering and transportation businesses. El Paso Corp. is the general partner. The companies expect the transaction to close this quarter.