El Paso Pipeline Partners LP, Houston, (NYSE: EPB) has completed the acquisition of an additional 28% interest in Colorado Interstate Gas Company (CIG) and the remaining 15% interest in Southern Natural Gas Company (SNG) from El Paso Corporation (NYSE: EP) for $745 million. The acquisition increases El Paso Pipeline Partners' interest in CIG to 86% and its interest in SNG to 100%.

"We are very pleased with our latest acquisition, which is immediately accretive to distributable cash flow and continues our rapid pace of growth," says Jim Yardley, president and chief executive officer for the general partner of El Paso Pipeline Partners. "Our partnership has owned interests in CIG and SNG since its initial public offering, and these pipelines have consistently generated strong cash flows for our unit holders. This transaction further enhances our excellent positions in the Rocky Mountain producing region, Front Range of Colorado and southeast U.S."

EPB recently issued approximately 14.7 million units, which raised $501 million of net cash proceeds, including the general partner's contribution to maintain its 2 percent interest in the partnership. EPB utilized these proceeds in combination with borrowings under its revolving credit facility to fund the transaction.

Management intends to recommend to the Board of Directors of the general partner an increase in the quarterly cash distribution to $0.48 per unit, or $1.92 per unit on an annualized basis, beginning with the second quarter 2011 distribution, which will be declared and paid in the third quarter 2011. This would represent an increase of 4 percent from the first quarter 2011 distribution of $0.46 per unit and an increase of 20 percent above the partnership's second quarter 2010 distribution of $0.40 per unit.

The terms of the transaction were unanimously approved by the Board of Directors of the general partner, El Paso Pipeline GP Company LLC, based in part on the unanimous approval and recommendation of the Board's conflicts committee, which is comprised entirely of independent directors. The conflicts committee engaged Tudor, Pickering, Holt & Co. to act as its independent financial advisor and to render a fairness opinion.