Enterprise Products Partners L.P.

SEC Filings

10-K405
TEPPCO PARTNERS LP filed this Form 10-K405 on 02/21/1997
Entire Document
 
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                                     PART I
 

ITEMS 1 AND 2. BUSINESS AND PROPERTIES
 
GENERAL
 
     TEPPCO Partners, L.P. is a Delaware limited partnership that was formed on
March 7, 1990 to own and operate through TE Products Pipeline Company, Limited
Partnership (collectively the "Partnership"), the refined petroleum products and
liquefied petroleum gases (LPGs) pipeline business of Texas Eastern Products
Pipeline Company and Subsidiary Companies (the "Company" or "General Partner"),
a Delaware corporation. The Company, a wholly owned subsidiary of PanEnergy Corp
(PanEnergy), is the general partner of the Partnership.
 
     The Company, as general partner, performs all management and operating
functions required for the Partnership pursuant to the Agreements of Limited
Partnership of TEPPCO Partners, L.P. and TE Products Pipeline Company, Limited
Partnership (the "Partnership Agreements"). The Company owns an effective
combined 2% general partner's interest in the Partnership. In connection with
the Partnership formation, the Company received 1,250,000 Deferred Participation
Interests (DPIs), which represents an effective 8.45% limited partner interest
in the Partnership. Effective April 1, 1994, the DPIs began participating in
distributions of cash and allocations of profit and loss. As of December 31,
1996, 94% of the DPIs have been converted into an equal number of Units, and the
balance of such DPIs may be converted immediately prior to the sale of the DPIs
by the Company. Pursuant to its Partnership Agreement, the Partnership has
registered the resale of such Units with the Securities and Exchange Commission.
Such Units may be sold from time to time on the New York Stock Exchange or
otherwise at prices and terms then prevailing or in negotiated transactions. As
of December 31, 1996, no such Units had been sold by the Company.
 
     The Partnership is one of the largest pipeline common carriers of refined
petroleum products and LPGs in the United States. The Partnership owns and
operates an approximate 4,300-mile pipeline system (together with the receiving,
storage and terminaling facilities mentioned below, the "Pipeline System" or
"Pipeline" or "System") extending from southeast Texas through the central and
midwestern United States to the northeastern United States. The Pipeline System
includes delivery terminals along the Pipeline for outloading product to other
pipelines, tank trucks, rail cars or barges, as well as substantial storage
capacity at Mont Belvieu, Texas, the largest LPGs storage complex in the United
States, and at other locations. The Partnership also owns two marine receiving
terminals, one near Beaumont, Texas, and the other at Providence, Rhode Island.
The Providence terminal is not physically connected to the Pipeline. As an
interstate common carrier, the Pipeline System offers interstate transportation
services, pursuant to tariffs filed with the Federal Energy Regulatory
Commission (FERC), to any shipper of refined petroleum products and LPGs who
requests such services, provided that the products tendered for transportation
satisfy the conditions and specifications contained in the applicable tariff. In
addition to the revenues received by the Pipeline System from its interstate
tariffs, it also receives revenues from the shuttling of LPGs between refinery
and petrochemical facilities on the upper Texas Gulf Coast and ancillary
transportation, storage and marketing services at key points along the System.
Substantially all the petroleum products transported and stored in the Pipeline
System are owned by the Partnership's customers. Petroleum products are received
at terminals located principally on the southern end of the Pipeline System,
stored, scheduled into the Pipeline in accordance with customer nominations and
shipped to delivery terminals for ultimate delivery to the final distributor
(e.g., gas stations and retail propane distribution centers) or to other
pipelines. Pipelines are generally the lowest cost method for intermediate and
long-haul overland transportation of petroleum products. The Pipeline System is
the only pipeline that transports LPGs to the Northeast.
 
OPERATIONS
 
     The Partnership conducts business and owns properties located in 12 states.
Products are transported in liquid form from the upper Texas Gulf Coast through
two parallel underground pipelines that extend to Seymour, Indiana. From
Seymour, segments of the Pipeline System extend to the Chicago, Illinois; Lima,
 
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