Southern Company and Kinder Morgan, Inc. recently announced a natural gas pipeline venture designed to advance both companies' leadership in energy infrastructure development through Southern Company’s acquisition of a 50 percent equity interest in the Southern Natural Gas (SNG) pipeline system.
Kinder Morgan will continue to operate the system. In addition, the agreement commits the companies to cooperatively pursue specific growth opportunities to develop natural gas infrastructure for the strategic venture.
SNG is a 7,600-mile pipeline system connecting natural gas supply basins in Texas, Louisiana, Mississippi, Alabama and the Gulf of Mexico to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina and Tennessee.
SNG is also a principal transporter of natural gas to Alabama, Georgia and South Carolina, which are part of one of the fastest-growing natural gas demand regions in the United States. Southern Company, one of the nation’s largest natural gas consumers and distributors, and Kinder Morgan, a recognized leader in natural gas pipeline development and operations, will work together to advance both companies’ efforts to develop infrastructure important to America’s energy future.
“This transaction is consistent with the infrastructure development strategy we have discussed for well over a year. The company’s strategic venture with Kinder Morgan, combined with our recent additions, AGL Resources and PowerSecure, underscore Southern Company’s leadership position in electricity and natural gas and our commitment to developing America’s energy infrastructure,” said Southern Company Chairman, President and CEO Thomas A. Fanning.
“Southern Company has been a valued customer of SNG for many years and this agreement draws on the strengths of both companies,” said Norman G. Holmes, president of Kinder Morgan South Region Pipelines.
“We are very pleased to deepen our relationship with them and excited about the growth opportunities this strategic relationship will provide.” Steve Kean, Kinder Morgan president and chief executive officer, added, “We plan to use all of the proceeds from this transaction to reduce debt at KMI. This is another step towards achieving our stated goals of strengthening our balance sheet and positioning the company for long-term value creation.”