Energy Transfer Partners LP is seeking to purchase assets after being turned down 12 times this year, CEO Kelcy Warren said Tuesday.

"We have been turned down a dozen times in the last six months by candidates we have gone to, and some of that is repeating the same candidate," Warren said in an interview in Boston. "We would like to do a really large deal. We would like to do something transformational in nature."

Dallas-based Energy Transfer Partners, with major operations in Oklahoma, is the nation's third-largest pipeline partnership by market value. As a master limited partnership, it is exempt from federal income taxes and pays most of its cash flow to investors.

Pipelines owned by master limited partnerships will consolidate this year absent a recovery in the industry, Warren said.

The company may buy pipeline assets in the Marcellus shale region of the Northeast by the end of this year or early 2010, he said.

Shale formations are providing new sources of natural gas in Texas, Arkansas and Pennsylvania, luring pipeline companies that want to connect the supply to higher-demand areas.

Energy Transfer has more than 17,500 miles of pipelines in service and another 500 miles under construction. In addition to the pipeline business, the partnership processes gas liquids and distributes propane to more than 1 million customers in 41 states.

In an interview last month, Warren said the company was tryin to buy assets and would possibly announce a deal during the third quarter. After being turned down, he said Tuesday that something may occur in fourth quarter.

"It just isn't happening as soon as I thought it would," Warren said. "I really did expect there would be some that would seek comfort in critical mass and converge ratios and investment-grade ability to raise debt and equity. I really thought they would be reaching out to us."

Originally published by JORDAN BURKE Bloomberg News.

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