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El Paso Pipeline buying pipelines for $635 million

HOUSTON (AP) -- El Paso Pipeline Partners L.P. is buying pipelines from El Paso Corp. for $635 million in cash.

El Paso Pipeline is a limited partnership formed by El Paso Corp. to own and run natural gas transportation pipelines and storage assets.

The deal for Cheyenne Plains Investment Co. and the remaining 14 percent stake in Colorado Interstate Gas Co. that El Paso Pipeline doesn't already own also includes about $242 million of debt.

El Paso Pipeline said Friday that it is funding the transaction with about $571 million in debt and $64 million from issuing common units to El Paso Corp.

The board of El Paso Pipeline GP Co., the general partner of El Paso Pipeline, unanimously approved the deal.

El Paso Corp. will pay about $1 million in order to keep its 2 percent general partner stake in El Paso Pipeline. El Paso Corp., which is based in Houston, explores for oil and natural gas and operates gas pipelines. It is being acquired by pipeline company Kinder Morgan Inc. in a $20.7 billion deal announced last year.

El Paso Corp.'s stock gained 34 cents to $29.11 in morning trading, while shares of El Pas Pipeline added 4 cents to $32.54.