BP Canada Energy Company currently operates Cochin and owns just over 50 percent of the system. KMP, which presently has an almost 50 percent stake in Cochin, will assume operations of the pipeline from BP when the transaction closes. The agreement is subject to due diligence, regulatory clearance and other standard closing conditions. The transaction is expected to close in the first quarter of 2007.
"We are pleased to increase our ownership stake in the Cochin Pipeline System, and we are delighted that BP will continue to be a shipper on the pipeline," said Tom Bannigan, president of KMP's Products Pipelines. "We look forward to bringing our pipeline expertise to bear when we begin operating Cochin, a large, strategically located pipeline system that will play an integral role relative to the future supply of propane in North America. The pipeline generates stable cash flow and the acquisition is expected to be immediately accretive to cash available for distribution to KMP unitholders upon closing."
KMP first gained entry into the Western Canadian Sedimentary Basin in October of 2000 when it purchased a 32.5 percent interest in Cochin. The multi-product pipeline consists of approximately 1,900 miles of 12-inch pipeline operating between Fort Saskatchewan, Alberta, and Windsor, Ontario. Cochin traverses three provinces in Canada and seven states in the United States, transporting propane, butane and natural gas liquids to the midwestern United States and eastern Canadian petrochemical and fuel markets. The pipeline includes 31 pump stations spaced at 60-mile intervals and five U.S. propane terminals. Underground storage, owned by third parties and KMP, is available at Fort Saskatchewan and Windsor.
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