Kinder Morgan Announces Acquisition of Jones Act Shipping Tankers in U.S. for Approximately $962 Million

  Kinder Morgan Announces Acquisition of Jones Act Shipping Tankers in U.S.
  for Approximately $962 Million

Business Wire

HOUSTON -- December 23, 2013

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today announced it has entered
into a definitive agreement to acquire American Petroleum Tankers (APT) and
State Class Tankers (SCT) from affiliates of The Blackstone Group and Cerberus
Capital Management for $962 million in cash. APT and SCT are engaged in the
marine transportation of crude oil, condensate and refined products in the
United States domestic trade, commonly referred to as the Jones Act trade.

APT’s fleet consists of five medium range Jones Act qualified product tankers,
each with 330,000 barrels of cargo capacity. With an average vessel age of
approximately four years, the APT fleet is one of the youngest in the
industry. Each of APT’s vessels is operating pursuant to long-term time
charters with high quality counterparties, including major integrated oil
companies, major refiners and the U.S. Navy. These time charters have an
average remaining term of approximately four years, with renewal options to
extend the initial terms by an average of two years. APT’s vessels are
operated by Crowley Maritime Corporation, which was founded in 1892 and is a
leading operator and technical manager in the U.S. product tanker industry.

SCT has commissioned the construction of four medium range Jones Act qualified
product tankers, each with 330,000 barrels of cargo capacity. The vessels are
scheduled to be delivered in 2015 and 2016 and are being constructed by
General Dynamics’ NASSCO shipyard. Upon delivery, the SCT vessels will be
operated pursuant to long-term time charters with a major integrated oil
company. Each of the time charters has an initial term of five years, with
renewal options to extend the initial term by up to three years. Kinder Morgan
will invest approximately $214 million to complete the construction of the SCT
vessels.

“This is a strategic and complementary extension of our existing crude oil and
refined products transportation business,” said John Schlosser, president of
KMP’s Terminals segment. “Product demand is growing and sources of supply
continue to change, in part due to the increased shale activity. As a result,
there is more demand for waterborne transportation to move these products. We
are purchasing tankers that provide stable fee-based cash flow through
multi-year contracts with major credit worthy oil producers.”

“Blackstone and Cerberus are pleased to have founded and built American
Petroleum Tankers into a market-leading Jones Act tanker company,” said Sean
Klimczak, Senior Managing Director at Blackstone. “We have enjoyed our
partnership with APT’s management team and wish them continued success with
Kinder Morgan in this next phase of APT’s growth.”

The transaction, which is subject to standard regulatory approvals, is
expected to close in the first quarter of 2014, at which time it will be
immediately accretive to cash available to KMP unitholders. APT currently
generates about $55 million of annual EBITDA. After completion of construction
of the four SCT vessels, KMP expects combined annual EBITDA of approximately
$140 million, which is an EBITDA multiple of 8.4 times. The general partner of
KMP, Kinder Morgan, Inc. (NYSE: KMI), has agreed to waive its incentive
distribution amounts of $16million in 2014 and $19 million in 2015 and $6
million in 2016 to facilitate the transaction.

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 more than 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 $105 billion. It owns an
interest in or operates more than 82,000 miles of pipelines and 180 terminals.
Its pipelines transport natural gas, gasoline, crude oil, CO[2] 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 interests 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.

This news release includes forward-looking statements. These forward-looking
statements are subject to risks and uncertainties and are based on the beliefs
and assumptions of management, based on information currently available to
them. Although Kinder Morgan believes that these forward-looking statements
are based on reasonable assumptions, it can give no assurance that such
assumptions will materialize. Important factors that could cause actual
results to differ materially from those in the forward-looking statements
herein include those enumerated in Kinder Morgan’s reports filed with the
Securities and Exchange Commission. Forward-looking statements speak only as
of the date they were made, and except to the extent required by law, Kinder
Morgan undertakes no obligation to update or review any forward-looking
statement because of new information, future events or other factors. Because
of these uncertainties, readers should not place undue reliance on these
forward-looking statements.

Contact:

Kinder Morgan Energy Partners, L.P.
Larry Pierce, 713-369-9407
Media Relations
Larry_pierce@kindermorgan.com
or
Investor Relations
713-369-9490
km_ir@kindermorgan.com
www.kindermorgan.com