SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report April 2, 1997
KINDER MORGAN ENERGY PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 1-11234 76-0380342
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification)
incorporation)
1301 McKinney Street, Ste. 3450
Houston, Texas 77010
713-844-9500
(Address of principal executive offices including zip code and Registrant's
telephone number, including area code)
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Item 4. Changes in Registrant's Certifying Accountant
On April 9, 1997, Kinder Morgan Energy Partners, L.P. (the "Registrant")
replaced Arthur Andersen LLP ("Arthur Andersen") as the principal accountant for
the Registrant and its affiliates. For the past two fiscal years, the reports of
Arthur Andersen did not contain an adverse opinion nor a disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope or accounting
principles. The decision to replace Arthur Andersen was approved by the
Conflicts and Audit Committee of the board of directors of Kinder Morgan G.P.,
Inc., the general partner of the Registrant.
In connection with the audits of the Registrant's financial statements for each
of the two most recent fiscal years ending December 31, 1995 and December 31,
1996 and in the subsequent interim period preceding Arthur Andersen's dismissal,
there were no disagreements on any matters of accounting principles or
practices, financial statement disclosure or auditing scope or procedure which
if not resolved to the satisfaction of Arthur Andersen, would have caused Arthur
Andersen to make references to the matter in their report.
On April 14, 1997, the Registrant engaged as its new principal accountant Price
Waterhouse LLP ("Price Waterhouse"). During the two most recent fiscal years and
through the date of their appointment, the Registrant has not consulted with
Price Waterhouse on matters of the type contemplated by Item 304(a)(2) of
Regulation S-K.
The Registrant has requested that Arthur Andersen furnish it with a letter
addressed to the Securities and Exchange Commission (the "SEC") stating whether
it agrees with the statements set forth in this Form 8-K. A copy of that letter,
dated April 15, 1997, is filed herewith as Exhibit 16.1 to this Form 8-K.
Item 5. Other Events.
On October 1, 1995, the Registrant assumed Enron Gas Processing Company's
("EGP") rights and obligations under a gas processing agreement with Mobil
Natural Gas, Inc. (the "Mobil Agreement"). Pursuant to the Mobil Agreement, the
Registrant is required to process dedicated volumes of natural gas produced by
Mobil. Also on October 1, 1995, the Registrant entered into a sublease agreement
with EGP (the "Sublease Agreement"), pursuant to which the Registrant subleases
a portion of the capacity at the Bushton gas processing plant located in
Ellsworth County, Kansas (the "Bushton Plant"). The subleased capacity at the
Bushton Plant allows the Registrant to fulfill its processing obligations under
the Mobil Agreement. On March 31, 1997, KN Processing, Inc., a Colorado
corporation ("KN"), acquired the stock of EGP.
On April 2, 1997, the Registrant entered into a letter agreement (the
"Agreement") whereby the Registrant agreed to assign its rights and obligations
under the Mobil Agreement to KN in exchange for KN's agreement to terminate the
Sublease Agreement, decrease the Registrant's storage cost at the Bushton
storage field, and assume certain costs relating to operation and maintenance of
the Registrant's facilities located within the Bushton storage field. The
assignment of the Mobil Agreement to KN will be effective as of April 1, 1997,
and the Registrant will retain liability and indemnify KN for the Registrant's
performance under the Mobil Agreement prior to such date.
In connection with the assignment of the Mobil Agreement, other agreements
relating to the Mobil Agreement and the Bushton Plant will either be amended,
terminated or assigned to KN. The Registrant has determined that the assignment
of the Mobil Agreement, termination of the Sublease Agreement, and transfer of
responsibility under, or termination or amendment of, other related agreements
are expected to achieve an overall positive result for the Registrant due to
reduced operating and storage costs.
The actions contemplated in the Agreement and described above are
conditioned upon receipt of consent from Enron Capital and Trade Resources Corp.
The Registrant and KN have agreed to use their best efforts to negotiate and
execute assignment, assumption, termination and amendment documents mutually
acceptable to both parties by May 1, 1997.
Exhibits:
16.1 Letter dated April 15, 1997 from Arthur Andersen LLP, Registrant's
certifying accountant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
KINDER MORGAN ENERGY PARTNERS, L.P.
By: Kinder Morgan G.P., Inc.,
Its general partner
By:/s/Thomas B. King
Name: Thomas B. King
Title: President
Date: April 15, 1997
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EXHIBIT INDEX
16.1 Letter dated April 15, 1997 from Arthur Andersen LLP, Registrant's
certifying accountant.
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April 15, 1997
Office of the Chief Accountant
SECPS Lender File
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, N.W.
Washington, D.C. 20549
We have read the first two paragraphs of Item 4 included in the attached Form
8-K dated April 2, 1997 of Kinder Morgan Energy Partners, L.P. to be filed with
the Securities and Exchange Commission and are in agreement with the statements
contained herein.
Very truly yours,
Arthur Andersen LLP
By: /s/ David B. Duncan
David B. Duncan
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