Southern Company, Kinder Morgan Finalize Southern Natural Gas Pipeline Strategic Venture
Companies share ownership of existing pipeline system, plan to explore future infrastructure development opportunities
ATLANTA and HOUSTON, Sept. 1, 2016 /PRNewswire/ -- Southern Company (NYSE:SO) and Kinder Morgan, Inc. (NYSE: KMI) today announced the closing of their natural gas pipeline venture through Southern Company's acquisition of a 50 percent equity interest in the Southern Natural Gas (SNG) pipeline system through a subsidiary of Southern Company Gas. As previously announced, Kinder Morgan will continue to operate the system and the companies are pursuing specific growth opportunities to develop additional natural gas infrastructure for the strategic venture.
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 strategic venture aligns with Southern Company's previously discussed infrastructure development strategy and builds on Southern Company Gas' midstream pipeline experience," said Southern Company Chairman, President and CEO Thomas A. Fanning. "With our new ownership stake in Southern Natural Gas we look forward to working with Kinder Morgan to explore future opportunities to deliver natural gas to customers."
SNG is an approximately 7,000-mile pipeline system connecting natural gas supply basins in Texas, Louisiana, Mississippi and Alabama to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina and Tennessee. SNG is 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.
"The Southern Company system has been a valued customer of SNG for many years and this joint venture is expected to greatly benefit the shareholders of both companies," said Norman G. Holmes, president of Kinder Morgan South Region Pipelines. "We are very pleased to begin pursuing the growth opportunities this strategic relationship should provide."
As previously disclosed, Kinder Morgan plans to use all of the proceeds from this transaction to reduce debt at Kinder Morgan.
Jones Day, Gibson Dunn & Crutcher LLP, Troutman Sanders LLP and Balch & Bingham LLP are serving as legal counsel to Southern Company, and Bracewell LLP and Weil, Gotshal & Manges LLP are serving as legal counsel to Kinder Morgan.
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Cautionary Statements Regarding Forward-Looking Information
Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found under Item 1.A. in Southern Company's and Kinder Morgan's Annual Reports on Form 10-K for the fiscal year ended December 31, 2015 and Southern Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. The foregoing list of important factors that may affect future results is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. All subsequent written and oral forward-looking statements concerning the transaction or other matters attributable to Southern Company, Kinder Morgan or any other person acting on their behalf are expressly qualified in their entirety by the cautionary statements referenced above. The forward-looking statements contained herein speak only as of the date of this release. Neither Southern Company nor Kinder Morgan undertakes any obligation to update or revise any forward-looking statement, except as may be required by law.
SOURCE Southern Company
For further information: Kinder Morgan Contacts, Media Relations, Dave Conover, (713) 369-9407, Dave_conover@kindermorgan.com, Investor Relations, (713) 369-9490, firstname.lastname@example.org, www.kindermorgan.com; Southern Company Contacts, Media Relations, (404) 506-5333 or (866) 506-5333, www.southerncompany.com, Investor Relations, Aaron Abramovitz, (404) 506-0780, email@example.com