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Sierrita Gas Pipeline Project

Updated July 31, 2014

Construction is under way for the Sierrita Pipeline Project.  On July 1, the Federal Energy Regulatory Commission (FERC) approved Sierrita’s request to begin construction activities, which began in early July.  The approval order followed a June 6 issuance by the FERC of a certificate of public convenience and necessity for the project.

Project Background:

In mid-November 2012, El Paso Natural Gas (EPNG), owned by Kinder Morgan Energy Partners, L.P. (NYSE: KMP) and Kinder Morgan, Inc. (NYSE: KMI), announced that it entered into a 25-year transportation precedent agreement in connection with plans to build a new lateral pipeline in Arizona to serve customers in Mexico with supplies of clean, efficient natural gas. This natural gas infrastructure project would not only benefit Arizona and the United States, but also help support cross-border energy development and a cleaner regional environment. The agreement supports the ongoing development of an approximately $200 million lateral pipeline, which would create new jobs in Arizona, and also provide a market for transporting abundant, low-priced U.S. gas production to Mexico. In addition, the project will help Mexico meet its environmental goals of converting existing fuel-oil-fired power generation plants to efficient, clean burning natural gas and also having natural gas supplies available for new power plants in the future.

An affiliate of EPNG has formed affiliate Sierrita Gas Pipeline LLC ("Sierrita Pipeline," formerly referred to as "Sasabe Pipeline Company"), and MGI Enterprises US LLC and MIT Pipeline Investment Americas, Inc. have acquired ownership interests in the Sierrita Pipeline. The project will provide approximately 200 million cubic feet per day of firm transportation capacity via a new, 36-inch diameter lateral pipeline that would extend approximately 60 miles from EPNG’s existing south mainlines, near Tucson, Ariz., to the U.S.-Mexico border, terminating at Sasabe, Ariz. The Sierrita Pipeline will interconnect via a new international border crossing with a new 36-inch diameter natural gas pipeline to be built in Mexico.

Mexico’s Comisión Federal de Electricidad (CFE) awarded two contracts to Sempra International’s Mexican business unit to construct, own and operate an approximately 500-mile (820 kilometers), $1 billion pipeline network connecting the northwestern states of Sonora and Sinaloa. The Sierrita Pipeline will interconnect with this pipeline network.

Project Timeline

  • April 2012 — Initiated NEPA pre-filing review with the FERC
  • Second quarter 2012 — Began environmental surveys
  • February 7-8 — Filed full FERC application and presidential permit application
  • October 2013 – FERC issued Draft Environmental Impact Statement
  • March 2014 - FERC issued the Final Environmental Impact Statement
  • June 2014 - FERC issued the Certificate of Public Convenience and Necessity and the Presidential Permit
  • July 2014- Construction begins
  • September 2014 — Anticipated project in service

Information regarding general project topics is also available by calling our toll-free number at 877-598-5263.

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 approximately 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 fourth largest energy company in North America with a combined enterprise value of approximately $110 billion. It owns an interest in or operates approximately 80,000 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 interest 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.