Enterprise Products Partners L.P.

SEC Filings

10-Q
GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 08/13/1996
Entire Document
 
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I
TEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Partnership's
consolidated financial statements and notes thereto included in Part I of this
quarterly report.  Unless the context otherwise requires, all references herein
to the Partnership with respect to the operations and ownership of the
Partnership's assets are also references to its subsidiaries, the Operating
Companies and Leviathan's nonmanaging interest in certain of the Partnership's
subsidiaries.

OVERVIEW

The Partnership's assets include interests in (i) eight natural gas pipeline
systems (the "Pipelines"), (ii) a crude oil pipeline system (the "Poseidon Oil
Pipeline"), (iii) five strategically located multi-purpose platforms, (iv)
three producing oil and gas properties, (v) an overriding royalty interest and
(vi) a dehydration facility.

The Pipelines include 981 miles of pipeline with a throughput capacity of 5.6
billion cubic feet ("Bcf") of gas per day.  The Pipelines are strategically
located offshore Louisiana and eastern Texas and gather and transport natural
gas for producers, marketers, pipelines and end-users for a fee.  The
Partnership's interest in the Pipelines is owned through 100% interests in each
of Ewing Bank Gathering Company, L.L.C., a Delaware limited liability company
("Ewing Bank"), Louisiana Offshore Gathering Systems, L.L.C., a Delaware limited
liability company ("LOGS"), Green Canyon Pipe Line Company, L.L.C., a Delaware
limited liability company ("Green Canyon"), Tarpon Transmission Company, a Texas
corporation ("Tarpon") and, indirectly through LOGS and Manta Ray Pipeline
Holding Company, L.L.C. ("Manta Ray"), the Manta Ray System; a 50% partnership
interest in each of Stingray Pipeline Company, a Louisiana general partnership
("Stingray") and Viosca Knoll Gathering Company, a Delaware general partnership
("Viosca Knoll"); a 40% partnership interest in High Island Offshore System, a
Delaware general partnership ("HIOS"); and a 33 1/3% partnership interest in U-T
Offshore System, a Delaware general partnership ("UTOS").  In May 1996, LOGS was
merged with and into Manta Ray and the LOGS system, the Manta Ray System and the
respective assets of such entities were integrated to form the Combined Manta
Ray System.  Concurrently, LOGS changed its name to Manta Ray Gathering Company,
L.L.C.

At inception, the Partnership owned a 50% interest in POPCO.  POPCO was formed
to construct, own and operate the Poseidon Oil Pipeline.  As designed, the
Poseidon Oil Pipeline will consist of approximately 200 miles of pipeline with a
maximum capacity of 400,000 barrels per day of sour crude oil.  The first phase
of the system, consisting of approximately 117 miles of pipeline extending from
a platform in Garden Banks Block 72 in an easterly direction to a platform in
Ship Shoal Block 332, was placed in service in April 1996 with a maximum
hydraulic capacity of 200,000 barrels of oil per day.  The second phase of the
system, which is currently under construction and scheduled to be completed by
the fourth quarter of 1996, will consist of approximately 83 miles of pipeline
extending from the platform in Ship Shoal Block 332 in a northerly direction to
a terminus located in southern Louisiana.  In July 1996, Marathon joined POPCO
by contributing its interest in 58 miles of nearby crude oil pipelines and
dedicating its portion of oil reserves attached to such pipelines to the
Poseidon Oil Pipeline for transportation.  As a result, each of the Partnership
and Texaco Trading now owns a 36% interest in the joint venture and Marathon
owns the remaining 28% interest.

The Partnership owns interests in five strategically located multi-purpose
platforms in the Gulf that have processing capabilities which complement the
Partnership's pipeline operations. The multi-purpose platforms serve as
junctions in the pipeline grid and enable the Partnership to perform
maintenance functions on its pipelines. In addition, the multi- purpose
platforms serve as landing sites for deeper water production and as sites for
the location of gas compression facilities and drilling operations.





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