El Paso Corp. closes Ruby project financing

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El Paso Corp. has closed $1.5 billion in financing for the Ruby Pipeline project.

Using the current six-month LIBOR rate, the expected weighted average rate for the seven-year debt financing is expected to be less than 7 percent, excluding debt-issuance costs.

“The closing of the Ruby financing project represents the delivery of the most significant component of our 2010 financing plan,” said Doug Foshee,  chief executive officer of El Paso Corp. “With the sale of our Mexican pipeline assets and the recent drop down to El Paso Pipeline Partners L.P., we have effectively addressed our funding requirements for 2010.”

The Ruby project is a 675-mile, 42-inch natural gas pipeline that will traverse through Wyoming, Utah, Nevada and Oregon.

Construction is expected to begin this spring, and service is expected to begin in March 2011. The company owns North America’s largest interstate natural gas pipeline system. El Paso’s local employees, from Colorado Interstate Gas company, will provide support for the Ruby project.

Global Infrastructure Partners will invest up to $700 million in the Ruby project. Upon completion of several closing conditions, GIP will acquire a 50 percent equity interest in the project.