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Press release from Business Wire

Morgan Stanley Infrastructure Partners Acquires Full Ownership of Southern Star Central Corp.

Thursday, August 23, 2012

Morgan Stanley Infrastructure Partners Acquires Full Ownership of Southern Star Central Corp.10:00 EDT Thursday, August 23, 2012 NEW YORK (Business Wire) -- Morgan Stanley Infrastructure, the dedicated infrastructure investing platform of Morgan Stanley Investment Management, announced today that Morgan Stanley Infrastructure Partners (MSIP) has increased its ownership stake to 100 percent of the Common Equity of Southern Star Central Corp., parent company of Southern Star Central Gas Pipeline (Southern Star). MSIP, a $4 billion global infrastructure fund, originally acquired a 40 percent economic stake with 50 percent governance rights in Southern Star in March 2010. Southern Star is the primary gas transmission and natural gas storage facility provider for several major U.S. Midwest cities and power generation providers. Southern Star serves metropolitan areas in Missouri (Kansas City, St. Louis, Springfield, St. Joseph and Joplin), Kansas (Wichita, Kansas City, Topeka and Lawrence) and Oklahoma (Oklahoma City). Southern Star receives gas supplies from major producing regions, including the Hugoton, Anadarko and Rocky Mountain basins. The system has 23 interconnections with other major interstate and intrastate pipelines, allowing its customers to source from additional producing basins, including the San Juan and Permian basins. As a regulated asset supplying crucial services to a fully contracted customer base, Southern Star is a “core” infrastructure asset. The system consists of approximately 6,000 miles of mainline and branch transmission pipelines, with 2.4 billion cubic feet (Bcf) per day of mainline delivery capacity. In addition, the company's extensive storage network of eight underground storage fields contains total working capacity of approximately 47 Bcf, with aggregate delivery capacity of approximately 1.3 Bcf per day. “Opportunities to invest in the U.S. natural gas pipeline sector are scarce, and we are very pleased to acquire full ownership of another regulated core infrastructure asset,” said John Veech, Head of Americas Investing for Morgan Stanley Infrastructure. “We have worked closely with Southern Star's seasoned management team to initiate growth projects and implement a strategic capital expenditures program. We look forward to further building the business and continuing to provide excellent service to customers.” Over the past two years, Southern Star has made significant capital expenditures, including extensive maintenance and pipeline integrity projects, and steps to enhance public safety. In addition, a number of growth projects have been completed or are under way, including the Elk City Storage Field Expansion, which was placed into service in April 2011 and now provides an additional 4 Bcf of storage capacity to the system. Jerry Morris, President and Chief Executive Officer of Southern Star, said, “Morgan Stanley Infrastructure Partners has been a very strong partner, and with their support and guidance we have strategically grown our capabilities and implemented critical operational improvements across the system. Our customers should expect further enhancements to service and flexibility.” Completion of the transaction is subject to certain standard conditions, including expiration or termination of the Hart-Scott-Rodino antitrust review period and reaffirmation of credit ratings of certain outstanding bonds. The seller received a limited amount of preferred equity. Other terms of the transaction were not disclosed. About Morgan Stanley Infrastructure Morgan Stanley Infrastructure (MSI), part of Morgan Stanley Investment Management, is an infrastructure investment and management platform with $4 billion under management that focuses on assets providing essential public goods and services to societies across the globe. MSI employs a disciplined process to invest in and manage diverse assets covering 11 sectors in eight countries across four continents. With teams in North America, Europe and Asia, MSI leverages a global network of relationships to source investments in sectors such as transport, energy & utilities, communications and social infrastructure. For further information, please visit www.morganstanley.com/infrastructure. About Morgan Stanley Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,200 offices in 43 countries. For further information about Morgan Stanley, please visit www.morganstanley.com. About Southern Star Central Corp. Southern Star Central Corp., headquartered in Owensboro, Kentucky, owns Southern Star Central Gas Pipeline, Inc., an interstate natural gas transmission system spanning approximately 6,000 miles in the Midwest and mid-continent regions of the United States. Southern Star's pipeline facilities are located throughout Kansas, Oklahoma, Nebraska, Missouri, Wyoming, Colorado and Texas. It serves metropolitan areas in Missouri (Kansas City, St. Louis, Springfield, St. Joseph and Joplin), Kansas (Wichita, Kansas City, Topeka and Lawrence) and Oklahoma (Oklahoma City). For additional information about Southern Star, please visit www.sscgp.com. Morgan StanleyMedia Relations:Matt Burkhard, 212-761-2444