(HOUSTON) -- The pipeline company Kinder Morgan agreed to buy El Paso corporation for $21.1 billion on Sunday, marking a huge deal in the booming natural gas business.
The new company would be the largest operator of natural gas pipelines in the country with the new deal.
This decision comes as the industry gears up for new natural gas production blasted from shale rocks. Drilling and producing oil and gas from shale and other tight rocks has taken off in the last five years as Exxon and oher major energy companies have purchased smaller players with more sizable stakes in the shale fields. The fracking technology is controversial but could be a huge source of future revenue for the energy industry.
The combined company is expected to move more than 1.9 million barrels of fuels a day and will also operate the only oil sands pipeland that services the West Coast.
Kinder Morgan insists that this decision will pay off for shareholders and expects to begin raising its dividend next year.
The new company will keep Kinder Morgan’s name.
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