Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC modifies consent order with Kinder Morgan to permit continued transition services for divested pipelines, (Oct 31, 2013)

By Jeffrey May, J.D.

An FTC consent order requiring energy company Kinder Morgan, Inc. to divest certain natural gas pipelines and related assets in order to resolve antitrust concerns over its $38 billion acquisition of El Paso Corporation has been modified to allow Kinder Morgan to continue providing transitional assistance to the purchaser of the divested assets. The public interest warranted the changes in the modification order, according to the Commission (In the Matter of Kinder Morgan, Inc., FTC Dkt. C-4355, File No. 121 0014).

Last year, under the terms of the FTC settlement, Kinder Morgan divested its Rockies Express pipeline, Kinder Morgan Interstate Gas Transmission pipeline, and Trailblazer pipeline, as well as two gas processing plants in the Rocky Mountain region and associated storage capacity, to Tallgrass Energy Partners, LP. Kinder Morgan was required to provide transitional support to the purchaser for nine months, under the consent order.

In its petition, Kinder Morgan asked the Commission to modify the order and to extend the Transition Services Agreement it had with Tallgrass by five months with an option by Tallgrass to extend the time further for up to five successive one-month periods, for a potential total of a ten-month extension. Without this extension, Tallgrass’s ability to compete in the marketplace would be diminished, Kinder Morgan contended. The agency sought public comments on the petition; however, no comments were received.

The public interest warranted the modifications because the purpose of the order was to maintain competition in the market for transportation of natural gas in geographic markets located in Wyoming and Colorado, and Tallgrass would not be able to effectively compete in these markets without the continuing transitional assistance. The Commission noted its concerns about “ongoing entanglements” among competitors. However, extending the time period would not raise a concern about ongoing entanglements or otherwise frustrate achieving the remedial purposes of the order, according to the agency.

Attorneys: Laura Wilkinson (Weil, Gotshal & Manges LLP) for Kinder Morgan, Inc.

Companies: Kinder Morgan, Inc.; Tallgrass Energy Partners, LP

News: Antitrust FederalTradeCommissionNews