USA: El Paso Pipeline Partners Provides 2011 Outlook, Expects Continued Growth
El Paso Pipeline Partners today announced its financial and operational outlook for 2011.
“In only three years from our initial public offering, El Paso Pipeline Partners has increased its quarterly distributions to unit holders by more than 50 percent and is now one of the 10 largest publicly traded master limited partnerships,” said Jim Yardley, president and chief executive officer of El Paso Pipeline Partners. “And we have achieved this growth while delivering very stable cash flows from our increasingly diversified asset base. We are very optimistic about our outlook based on the expectation of continued acquisitions from El Paso Corporation as well as future organic growth from our assets that have leading positions in key market and supply areas.”
El Paso Pipeline Partners is targeting 2011 Adjusted EBITDA of $895 million to $920 million, which is significantly higher than 2010. Distributable cash flow is also expected to grow substantially as the partnership is targeting $515 million to $545 million in 2011. The continued increase in Adjusted EBITDA and distributable cash flow reflects not only significant 2010 growth activity, which included approximately $2.4 billion of acquisitions from El Paso Corporation and three organic projects placed into service, but also continued acquisition activity in 2011. The partnership’s 2011 guidance assumes two to three acquisitions from El Paso Corporation. The size and frequency of acquisitions will largely be dependent on capital market access and will be financed in a manner consistent with maintaining its high-quality balance sheet.
Total consolidated capital expenditures for 2011 are expected to be approximately $260 million, including approximately $110 million of maintenance capital and approximately $150 million of expansion capital. The partnership’s growth capital is primarily for Southern Natural Gas Company’s (SNG’s) South System III expansion, the second phase of which will be placed in-service in June 2011. The third phase of SNG’s South System III expansion is expected to go in-service in 2012. El Paso Pipeline Partners continues to evaluate additional expansion opportunities around its well-positioned assets.
El Paso Pipeline Partners, L.P. is a Delaware limited partnership formed by El Paso Corporation to own and operate natural gas transportation pipelines and storage assets. El Paso Corporation currently owns a 49 percent limited partner interest and 2 percent general partner interest in the partnership. El Paso Pipeline Partners, L.P. owns Wyoming Interstate Company (WIC), Southern LNG Company, L.L.C. (SLNG), El Paso Elba Express Company, L.L.C. (Elba Express), a 60 percent interest in Southern Natural Gas Company (SNG), and a 58 percent interest in Colorado Interstate Gas Company (CIG). WIC and CIG are interstate pipeline systems serving the Rocky Mountain region, SLNG owns the Elba Island LNG storage and regasification terminal near Savannah, Georgia, and both Elba Express and SNG are interstate pipeline systems serving the southeastern region of the United States.
Source: El Paso Pipeline Partners, January 28, 2011;