Enterprise Products Partners L.P.

SEC Filings

10-Q
GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 08/09/2004
Entire Document
 
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     In July 2004, we completed a number of our natural gas pipeline
construction projects including the Marco Polo natural gas pipeline and the
Phoenix gathering system (described below). As a result of these natural gas
pipeline systems being placed into service, we now own interests in natural gas
pipeline systems with a combined maximum design capacity (net to our interest)
of over 11.8 Bcf/d of natural gas, up from 10.9 Bcf/d. Additionally, we expect
an increase in transportation revenues in the second half of 2004 derived from
producer transportation on these systems.
 
  Marco Polo Natural Gas Pipeline
 
     In July 2004, we completed construction on our 75-mile, 18-inch to 20-inch
natural gas pipeline that supports the Marco Polo TLP. The Marco Polo natural
gas pipeline has a capacity of 400 MMcf/d and interconnects with our Typhoon
natural gas pipeline in Green Canyon Block 236.
 
  Phoenix Gathering System
 
     In July 2004, we completed construction on our 78-mile, 18-inch natural gas
gathering system. The Phoenix gathering system has a capacity of 450 MMcf/d and
interconnects with the ANR Patterson Offshore pipeline system at Vermillion
Block 397.
 
  Second Quarter Ended June 30, 2004 Compared With Second Quarter Ended June 30,
  2003
 
     Natural gas pipelines and plants margin for the quarter ended June 30,
2004, was $9.7 million higher than in the same period in 2003. This increase was
primarily due to a $9.8 million increase in margin for our Texas intrastate
pipeline system. During the second quarter of 2003, the Texas intrastate
pipeline system experienced an unexplained increase in fuel used on the system,
which resulted in a $3.0 million reduction in margin. Additionally, at June 30,
2003, we had an imbalance payable position of 6.3 Bcf that resulted in a $3.9
million revaluation impact, which also decreased margin. During the second
quarter of 2004, margin on the Texas intrastate system was not impacted by those
same events as our fuel use on the system had returned to historical levels and
our imbalance position at June 30, 2004, had decreased significantly to a
payable position of 0.4 Bcf. Additionally, we had a $2.3 million increase in
margin at our Texas intrastate pipeline system related to an increase in base
business over the same period in 2003. Margin also increased by $2.3 million at
our Chaco processing plant due to higher NGL prices as compared to the same
period in 2003. Partially offsetting these increases was a $1.6 million decrease
in margin at our Indian Basin gas plant attributable to lower volumes due to
plant maintenance in the second quarter of 2004.
 
     Operating expenses excluding depreciation, depletion and amortization for
the quarter ended June 30, 2004, were $3.9 million higher than the same period
in 2003 primarily due to timing of expenditures associated with normal recurring
operating expenses and an increase in allocated administrative costs, including
merger-related costs and directors and officers liability insurance. These
increases were partially offset by a $2.0 million increase in our allowance for
doubtful accounts recorded in 2003.
 
  Six Months Ended June 30, 2004 Compared With Six Months Ended June 30, 2003
 
     Natural gas pipelines and plants margin for the six months ended June 30,
2004, was $19.8 million higher than in the same period in 2003. This increase
was primarily due to a $21.5 million increase in margin for our Texas intrastate
pipeline system. During the six months ended June 30, 2003, the Texas intrastate
pipeline system experienced an unexplained increase in fuel used on the system,
which resulted in a $7.2 million reduction in margin. Additionally, at June 30,
2003, we had an imbalance payable position of 6.3 Bcf that resulted in a $9.4
million revaluation impact, which also decreased margin. During the six months
ended June 30, 2004, margin on the Texas intrastate system was not impacted by
those same events as our fuel use on the system had returned to historical
levels and our imbalance position at June 30, 2004, had decreased significantly
to a payable position of 0.4 Bcf. Additionally, we had a $4.4 million increase
in margin at our Texas intrastate pipeline system related to an increase in base
business over the same period in 2003. Margin also increased by $3.5 million due
to an increase in volumes during 2004 on our San Juan gathering system
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