Private equity firms Apollo Global Management LLC and Riverstone Holdings have teamed up to bid around $7 billion (4 billion pounds) for all of El Paso Corp's exploration and production assets, according to sources familiar with the matter.

Kinder Morgan Inc , which struck a $21 billion deal to buy El Paso late last year, is weighing whether to sell the whole business as one or break it into six packages and sell those off separately, the sources said.

The banks advising Kinder Morgan on the sale -- Barclays Plc's Barclays Capital and Evercore Partners Inc -- started peddling the separate packages earlier this week, three sources said. One of them said that indications of interest in the packages are due by mid-February.

Sources said that strategic bidders as well as other private equity firms would be interested in the packages.

Kinder Morgan agreed to buy rival El Paso in October in a bid to combine the two largest natural gas pipeline operators in North America. But Kinder Morgan was not interested in owning El Paso's oil and gas exploration and production business and promptly put it on the block.

One source said Kinder Morgan would likely make a decision about how it planned to sell the business by the end of the month.

El Paso and Riverstone declined to comment, while an Apollo spokeswoman did not immediately respond to a request for a comment.

(Reporting By Greg Roumeliotis and Michael Erman; Editing by Maureen Bavdek and Gerald E. McCormick)