TEPPCO PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
claims for damages to property or persons resulting from the operations of the
pipeline system, could result in substantial costs and liabilities to the
Partnership. The Partnership does not anticipate that changes in environmental
laws and regulations will have a material adverse effect on its financial
position, operations or cash flows in the near term.
As part of the Agreed Order entered into between the Partnership and the
Indiana Department of Environmental Management (IDEM), the Partnership has
completed the remedial investigation phase II sampling plan for groundwater
contamination at the Seymour, Indiana, terminal. Additionally, as a part of the
Agreed Order, the Partnership has presented a scope of work for the final
remedial investigation report for the Seymour terminal. The Agreed Order
entered into between the Partnership and IDEM will ultimately result in a
remediation program for any on-site and off-site environmental problems
attributable to the Partnership's operations at Seymour. In the opinion of the
general partner, the completion of the remediation program to be proposed by
the Partnership, if such program is approved by IDEM, will not have a material
adverse impact on the Partnership.
Substantially all of the petroleum products transported and stored by the
Partnership are owned by the Partnership's customers. At March 31, 1997, the
Partnership had approximately 11.1 million barrels of products in its custody
owned by customers. The Partnership is obligated for the transportation,
storage and delivery of such products on behalf of its customers. The
Partnership maintains insurance adequate to cover product losses through
circumstances beyond its control.