Kinder Morgan Energy Partners agreed Monday to buy Santa Fe Pacific Pipeline Partners for about $1.47 billion in cash, stock and assumed debt, snapping up gasoline and jet-fuel pipelines in fast-growing Western markets.
Kinder Morgan Energy, based in Houston, now owns two pipelines that ship fuels derived from natural gas, such as propane and butane, to the Midwest and Louisiana. Santa Fe, based in Orange, Calif., serves six states with pipelines carrying fuels such as gasoline that are refined from crude oil.
By acquiring Santa Fe’s pipelines, Kinder Morgan gains entry to Nevada, Arizona and California, where demand for gasoline is expected to soar. Santa Fe is the largest pipeline shipper of gasoline and other refined fuels in California.
The purchase will allow cost-cutting that will save $15 million to $20 million a year, Kinder Morgan said. The company declined to estimate how many jobs would be cut.
