Blackstone Puts $500 Million Into Pipeline Company (BX, KYN, KYE, KED, EPD)

The Wall Street Journal has reported that The Blackstone Group LP (NYSE:BX) will invest some $500 million into a new pipeline company, Crestwood Midstream Partners LLC. Crestwood was formed in December 2007, with an initial investment of $150 million from the Kayne Anderson private equity energy funds, and you will see there are several of them:

• Kayne Anderson MLP Investment Company (NYSE: KYN)
• Kayne Anderson Energy Total Return Fund (NYSE: KYE)
• Kayne Anderson Energy Development Company (NYSE: KED)

A Blackstone-owned hedge fund, GSO Capital Partners, is also participating in today’s deal.

Crestwood is headed by Robert G. Phillips, former chief executive of Enterprise Products Partners (NYSE:EPD), who joined Enterprise following its merger with GulfTerra in 2006. The WSJ notes that Blackstone teamed up with Warburg Pincus just a week ago on a $500 million investment in Kosmos Energy, an West African offshore oil exploration company.

Paul Ausick
June 25, 2008