Late last week, Kinder Morgan Energy Partners LP (KMP) closed the previously announced acquisition of natural gas treating business from Dallas-based Crosstex Energy LP (XTEX) and its general partner Crosstex Energy Inc. (XTXI) for approximately $266 million.  As part of the transaction, Kinder Morgan purchased approximately 290 amine-treating and dew-point control plants from natural gas company Crosstex. These plants are primarily located in Texas and Louisiana , with additional facilities in Mississippi , Oklahoma , Arkansas and Kansas.  Kinder Morgan will use these natural gas treatment plants in servicing its Texas Intrastate customers and to other producers in various supply basins, including the fast growing shale plays. Following the deal, Kinder Morgan has become the largest provider of contracted natural gas treating services in the country.  The Crosstex asset acquisition will allow the partnership to expand its natural gas business through the inclusion ...

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My Picks for Wednesday September 30, 2009, are:

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OREX, Orexigen Therapeutics, Inc.

OREX is a biopharmaceutical company focused on the treatment of obesity. OREX’s lead investigational product, Contrave, has completed Phase 3 clinical trials and is on track for a regulatory submission with the FDA in the first half of 2010. OREX’s second product candidate, Empatic, has completed Phase 2 clinical development. Each product candidate is designed to act on a specific group of neurons in the central nervous system with the goal of achieving appetite suppression and sustained weight loss, through combination therapeutic

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Trading on the OTCBB, Heartland Inc. is a diversified company with businesses in steel warehousing and fabrication as well as petroleum retail and wholesale operations. They are a holding company with three subsidiaries. Heartland Inc.’s headquarters are in Cumberland Gap, Tennessee, directly on the border of Tennessee, Kentucky, and Virginia.

The Company’s Mound Technologies is a full service structural and miscellaneous steel fabricator located in Springboro, Ohio. Their products include stairs and railings of both industrial and architectural quality. Mound also provides steel bar joist, metal deck, and erection services to complete the metals contract requirements.

Their Lee Oil Company is a multi state petroleum marketer and distributor. This subsidiary services and sells over 40 million gallons of petroleum product annually through a combination of retail and wholesale operations. Lee has numerous long-term petroleum supply contracts with retail and wholesale customers. Their Lee Food Marts operate 23 convenience stores in Virginia, Tennessee,

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Kinder Morgan Energy Partners, L.P. (KMP) -- the largest independent owner and operator of petroleum product pipelines in the U.S. -- completed its first commercial shipment of bio-diesel through its Plantation Pipeline Company. The process, a technological breakthrough in transporting bio-diesel through pipelines, carried the fuel to various marketing terminals across Georgia and Virginia.Until now, shipment of bio-diesel has been limited to trucks and trains due to several problems in passing bio-diesel through pipelines. Bio-diesel tends to contaminate other fuels, particularly jet fuels, flowing through the same pipeline. Kinder Morgan's breakthrough was to identify a proprietary additive that prevents this contamination. The injection of this additive -- B99 -- has enabled the pipeline transportation.We believe that the Plantation Pipeline project should go a long way toward meeting demand for bio-diesel across the Southeast. Moreover, the ability to blend and transport bio-diesel through ...

On Monday, June 29, interim service began on REX East, the eastern section of Kinder Morgan Energy Partners' (KMP) 1,679-mile multi-state Rockies Express Pipeline (REX). With a capacity of 1.6 billion cubic feet per day (Bcf/d), natural gas started flowing on the 444-mile segment of the $6.6 billion pipeline that runs from Audrain County, Missouri, to the Lebanon interconnection point in Warren County, Ohio. Earlier, during May last year, the western section of the pipeline (REX West) came online. The 713-mile pipeline runs from the Cheyenne hub in Weld County, Colorado, to a major delivery point in Brown County, Kansas and has a capacity of 1.5 Bcf/d.

The remaining portion of the 639-mile 42-inch diameter Rex East pipeline, which will end in Clarington, Ohio, is expected to be operational by November 1, 2009. When fully completed, the entire 1,679-mile pipeline will be capable of transporting roughly

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In the late 1800’s, a man was looking for a material with the ability to withstand intense heat. He took filaments of bamboo and baked them at a very high temperature in a controlled atmosphere. Through this process, called pyrolysis, the bamboo filaments became fire resistant and able to withstand extreme heat. The man’s name was Thomas Edison, and he was searching for the filament needed to create the incandescent lightbulb.Fast forward 120 years or so, and chances are you own something that utilizes nearly the same technology: a tennis racket, a bicycle, or for the younger crowd, a car hood or spoiler. I am talking about carbon fiber.

Today we use a petroleum product instead of bamboo or cotton, but the process remains virtually unchanged. And with technological advances, the future of carbon fiber is astounding.

Carbon fiber, with a higher tensile strength than steel, will soon become the material of

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We have upgraded Kinder Morgan (KMP), the largest independent owner and operator of petroleum product pipelines in the U.S., to Buy from Hold on valuation grounds.

We believe that the recent broad MLP-group sell-off in general and KMP weakness in particular is overdone and provides for excellent buying opportunities. Distributions are safe as evident from KMP's just-announced distribution increase.

For the third quarter of 2008, the partnership announced a 16% increase in distribution to the annualized run rate of $4.08 per unit. We believe that MLP valuations are at extremely attractive levels.

Given its diversified business mix and comfortable distribution coverage ratio, we believe the partnership can easily maintain a distribution growth rate of around 8% annually over the next few years. With over $3 billion of organic projects beginning to come online over the next few years, we see favorable long-term growth profile for KMP.

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