Nov. 11 (Bloomberg) -- Energy Transfer Partners Inc., the third-largest U.S. pipeline partnership by market value, is seeking a $1.1 billion senior unsecured revolving credit facility to finance an interstate natural-gas transport project.

“We’re on the process of finalizing the terms,” Chief Financial Officer Martin Salinas said yesterday during a call with analysts to discuss third-quarter results. The revolver will be guaranteed by the company and by Kinder Morgan Energy Partners LP, he said.

Energy Transfer will not make any additional capital contributions to its Fayetteville Express Pipeline project and would be reimbursed for $79 million in expenditures through September if a loan agreement is completed this month as anticipated, Salinas said. The 187-mile natural-gas pipeline originates in Arkansas and is a 50/50 joint development with Kinder Morgan, according to the company’s third-quarter report filed with the U.S. Securities and Exchange Commission.

Dallas-based Energy Transfer has a $2 billion revolver due July 2012 with $483.3 million outstanding as of Sept. 30, according to the filing. The interest rate on the credit line is 0.55 percentage point more than the London interbank offered rate, as determined by the company’s credit rating. Energy Transfer also pays a 0.11 percent annual commitment fee, according to the filing.

Three-month Libor, a borrowing benchmark, was set at 0.27 percent today. Energy Transfer said in the quarterly filing that its weighted-average interest rate on the revolver as of Sept. 30 was 0.82 percent.

Enterprise Products Partners LP is the biggest U.S. pipeline partnership, and Kinder Morgan is second. Both are based in Houston.

To contact the reporter on this story: Emre Peker in New York at epeker2@bloomberg.net.

Last Updated: November 11, 2009 13:56 EST