|Enterprise Signs Long-Term Gas Processing Agreement with EnCana for Piceance Basin Production; To Build a Cryogenic Processing Plant and Pipeline|
HOUSTON--(BUSINESS WIRE)--Jan. 26, 2006--Enterprise Products Partners L.P. (NYSE:EPD) announced today that one of its affiliates has entered into a long-term natural gas processing contract with EnCana Oil and Gas (USA) Inc., an affiliate of EnCana Corporation (TSX:ECA) (NYSE:ECA). Under the terms of the agreement, Enterprise will have the right to process up to 1.3 billion cubic feet per day (Bcfd) of EnCana's natural gas production in the Piceance basin area of western Colorado.
Enterprise has commenced construction of the Meeker cryogenic plant and associated facilities which are expected to begin operations in mid-2007. In the first phase, Enterprise will build a cryogenic natural gas processing plant and associated dehydration, separation, treating and compression facilities capable of processing up to 750 million cubic feet per day (MMcfd). The Meeker Plant will be located in Rio Blanco County, Colorado, at the terminus of EnCana's Piceance Basin natural gas gathering system and will be base loaded with EnCana's existing Piceance Basin rich natural gas production which currently is approximately 360 MMcfd (Gross Volume). Natural gas processed by the plant will be delivered to a broad range of downstream markets through four major current and planned natural gas pipelines including Entrega, Wyoming Interstate, TransColorado and Questar.
The Meeker Plant is designed with operating flexibility to range from conditioning mode to full recovery with the ability to recover a minimum of 2,500 barrels per day ("BPD") and a maximum of 35,000 BPD of mixed natural gas liquids ("NGLs") depending upon processing conditions and natural gas quality. A second phase of the project would include expansion of the Meeker Plant to process up to 1.3 Bcf/d with total design recovery of approximately 70,000 BPD of NGL's.
In addition to the Meeker Plant and related equipment, Enterprise will construct a 50-mile 12" NGL pipeline lateral which will interconnect the Meeker Plant with its Mid-America Pipeline ("MAPL") system which transports NGL's from the Rocky Mountain region to NGL markets located near Mont Belvieu, Texas, and Conway, Kansas. Enterprise previously announced a 50,000 BPD phase I expansion of the MAPL system in January 2005 and is expected to place the new capacity in service in the second quarter 2007. Additionally, in July 2005, Enterprise announced a new 75,000 BPD NGL fractionator, which is currently under construction near Hobbs, New Mexico, that will be supplied, in part, by the NGL's produced at the Meeker Plant.
"We are pleased to announce this long-term agreement with EnCana Oil and Gas, which is one of the largest producers in the Piceance basin," said Robert G. Phillips, President and Chief Executive Officer of Enterprise. "This contract enables Enterprise to extend our natural gas processing business to the Rocky Mountains, one of the fastest-growing natural gas producing regions in the United States. Natural gas production in the Piceance Basin has been increasing at a 20% compound annual growth rate over the past four years and is a primary driver of the new processing facilities and the downstream expansion of Enterprise's pipeline and fractionation assets serving this region. We are pleased to have this opportunity to provide these value added services to EnCana and other natural gas producers in the Piceance Basin and an overall industry solution for the expected growth of natural gas and NGL's from the Rockies."
Enterprise Products Partners L.P. is one of the largest publicly traded energy partnerships with an enterprise value of approximately $15 billion, and is a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs and crude oil. Enterprise transports natural gas, NGLs and crude oil through 32,670 miles of onshore and offshore pipelines and is an industry leader in the development of midstream infrastructure in the Deepwater Trend of the Gulf of Mexico. Services include natural gas transportation, gathering, processing and storage; NGL fractionation (or separation), transportation, storage, and import and export terminaling; crude oil transportation and offshore production platform services. For more information, visit Enterprise on the web at www.epplp.com. Enterprise Products Partners L.P. is managed by its general partner, Enterprise Products GP LLC, which is wholly owned by Enterprise GP Holdings L.P. (NYSE:EPE). For more information on Enterprise GP Holdings L.P., visit its website at www.enterprisegp.com
This press release contains various forward-looking statements and information that are based on Enterprise's beliefs and those of its general partner, as well as assumptions made by and information currently available to Enterprise. When used in this press release, words such as "anticipate," "project," "expect," "plan," "goal," "forecast," "intend," "could," "believe," "may," and similar expressions and statements regarding the plans and objectives of Enterprise for future operations, are intended to identify forward-looking statements. Although Enterprise and its general partner believe that such expectations reflected in such forward-looking statements are reasonable, neither Enterprise nor its general partner can give assurances that such expectations will prove to be correct. Such statements are subject to a variety of risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, Enterprise's actual results may vary materially from those Enterprise anticipated, estimated, projected or expected. Among the key risk factors that may have a direct bearing on Enterprise's results of operations and financial condition are:
-- fluctuations in oil, natural gas and NGL prices and production due to weather and other natural and economic forces;
-- a reduction in demand for our products by the petrochemical, refining or heating industries;
-- the effects of our debt level on its future financial and operating flexibility;
-- a decline in the volumes of NGLs delivered by our facilities;
-- the failure of its credit risk management efforts to adequately protect us against customer non-payment;
-- terrorist attacks aimed at our facilities; and,
-- the failure to successfully integrate our operations with any companies that we may acquire in the future, if any.
Enterprise has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
CONTACT: Enterprise Products Partners L.P.
SOURCE: Enterprise Products Partners L.P.