Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Kinder Morgan asks FTC to extend transition services agreement for pipeline divestitures, (Aug 12, 2013)

By Tobias J. Gillett, J.D., LL.M.

Kinder Morgan, Inc. has requested the FTC to modify its final order requiring Kinder to divest pipelines and gas processing plants to resolve FTC charges that its 2012 acquisition of El Paso Corporation would harm competition for pipeline transportation and processing in the Rocky Mountain region (In the Matter of Kinder Morgan, Inc., FTC File No. 121 0014).

The FTC will accept public comments on Kinder’s petition to permit an extension of its Transition Services Agreement (TSA) with Tallgrass Energy Partners, LP from nine to nineteen months until September 13, 2013.

The FTC’s final order required Kinder to divest Kinder Morgan Interstate Gas Transmission LLC, which includes approximately 5,100 miles of transmission lines in Colorado, Kansas, Nebraska, Missouri, and Wyoming; Trailblazer Pipeline Company LLC, a natural gas pipeline system that includes a 436-mile natural gas pipeline originating at an interconnection with Wyoming Interstate Company, LLC’s pipeline system near Rockport, Colorado and runs through southeastern Wyoming to a terminus near Beatrice, Nebraska; and its 50 percent membership interest in Rockies Express Pipeline LLC (REX), a natural gas pipeline system which includes an approximately 1,679 mile natural gas pipeline originating at a point near Meeker, in Rio Blanco County, Colorado and terminating at a point near Clarington, in Monroe County, Ohio. Kinder also had to divest two gas processing plants in the Rocky Mountain region and associated storage capacity, and to provide transitional support to the company that acquired the divested assets. Kinder divested the assets to Tallgrass in 2012.

According to Kinder’s petition, “Tallgrass has not been able to assume certain functions being provided by Kinder pursuant to the TSA due to the complex and integrated nature of these functions,” and has “encounter[ed] unanticipated personnel and software issues that have delayed Tallgrass’ implementation deadline.” Without the services provided by Kinder, “Tallgrass will not be able to conduct its pipeline business and its ability to effectively compete in the marketplace would be materially diminished, if not entirely eliminated.” Kinder notes that it submitted the petition on behalf of Tallgrass, that the request is based on factual conditions that changed following the acquisition, that its request is in the public interest because it would permit Tallgrass to compete more effectively, and that its requested changes would be ministerial or unlikely to affect achieving the purposes of the FTC’s order.

The public may submit comments on Kinder’s request until September 13, 2013 through the FTC’s online form here, or by mailing them to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580.

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

News: Antitrust FederalTradeCommissionNews