|Enterprise Subsidiary Files Registration Statement|
HOUSTON--(BUSINESS WIRE)--Nov. 2, 2006--Enterprise Products Operating L.P. "Enterprise," the operating subsidiary of Enterprise Products Partners L.P. (NYSE:EPD), today announced that it has formed a new wholly-owned subsidiary, Duncan Energy Partners L.P., which has filed a registration statement on Form S-1 with the United States Securities and Exchange Commission to sell 13 million common units representing limited partner interests in an initial public offering expected to be completed in the first quarter of 2007. Enterprise will own 100% of the general partner of Duncan Energy Partners, which will have no incentive distribution rights, will retain a limited partner interest in Duncan Energy Partners and will receive proceeds from the offering.
As stated in the registration statement, Duncan Energy Partners is being formed to own interests in certain midstream assets of Enterprise and may, from time to time, acquire interests in midstream assets from affiliates of Enterprise and, under certain circumstances, from third parties. Duncan Energy Partners will initially own 66% of the equity interests in subsidiaries that will be contributed by Enterprise, including subsidiaries holding its Acadian Gas, Sabine Propylene and Lou-Tex Propylene pipeline systems; its South Texas NGL pipeline asset that was acquired from Exxon in August 2006; and its Mont Belvieu storage facilities. Together, these assets will include 33 salt dome storage caverns in Mont Belvieu, Texas with the capacity to store approximately 100 million barrels of natural gas liquids ("NGLs") and petrochemicals; over 1,000 miles of Louisiana intrastate natural gas pipelines with an aggregate capacity of approximately one billion cubic feet per day; a 284-mile petrochemical pipeline system on the U.S. Gulf Coast that transports chemical-grade and polymer-grade propylene; and a 290-mile pipeline system that will transport NGLs produced in South Texas to Mont Belvieu. Including its direct retained 34 percent equity interest in these businesses, as well as a general partner interest and common units in Duncan Energy Partners, Enterprise will retain an approximate 58.6 percent net interest in these businesses (or 47.3 percent if an option to purchase additional units of Duncan Energy Partners is exercised by the underwriters).
"We are in a unique period in our country's history where there is significant need for new energy infrastructure projects to transport, store and process natural gas, NGLs and crude oil to meet our nation's growing demand for hydrocarbons," said Robert G. Phillips, president and chief executive officer of Enterprise. "Given Enterprise's strong franchise and broad base of assets serving both producers and consumers of energy, we have developed a large portfolio of organic growth projects to build energy infrastructure and we see additional opportunities to construct new projects over the next several years. We believe the formation and initial public offering of Duncan Energy Partners will enable Enterprise to more efficiently manage its capital resources, large portfolio of assets and organic growth opportunities, which supports our objective to provide our partners with an attractive long-term total return on their investment."
"Our sponsorship of Duncan Energy Partners is not a new concept, as many companies in the midstream energy sector have benefited from sponsoring publicly traded partnerships. Historically, this has enabled the sponsors to monetize ownership interests in mature assets and redeploy proceeds in higher returning growth projects while retaining operational control of core assets. The contribution of assets to Duncan Energy Partners will enable Enterprise to maintain the integrity of our value chain while providing Enterprise with another source of long-term growth capital," Phillips added.
"Moreover, the contribution of assets to Duncan Energy Partners will allow Enterprise to prudently rationalize certain assets in its large portfolio and significantly enhance its financial flexibility. The cash proceeds we receive from Duncan Energy Partners will be used toward reducing debt and funding the construction of our organic growth projects. These new projects, when integrated into our system-wide value chain, are expected to provide greater returns on investment which will support Enterprise's long-term growth objectives," stated Phillips.
Enterprise has reviewed this transaction with the debt rating agencies, Fitch Ratings, Moody's Investor Service and Standard & Poor's, and does not expect any effect on Enterprise's credit ratings. Lehman Brothers Inc. is serving as the lead underwriter and has served as the structuring agent for this transaction.
Enterprise Products Partners L.P. is not issuing or selling any of its EPD common units in this transaction.
A registration statement relating to the securities of Duncan Energy Partners L.P. has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. When available, a written prospectus for the offering may be obtained from Randy Burkhalter, Investor Relations, at 1100 Louisiana, 10th floor, Houston, Texas 77002.
Company Information and Use of Forward-Looking Statements
Enterprise Products Partners L.P. is one of the largest publicly traded energy partnerships with an enterprise value of more than $16 billion, and is a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil and petrochemicals. Enterprise transports natural gas, NGLs and crude oil through more than 34,000 miles of onshore and offshore pipelines. Services include natural gas transportation, gathering, processing and storage; NGL fractionation (or separation), transportation, storage, and import and export terminaling; crude oil transportation, offshore production platform services and petrochemical pipeline and 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;
-- the effects of our debt level on its future financial and operating flexibility;
-- a reduction in demand for our products by the petrochemical, refining or heating industries;
-- 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., Houston
SOURCE: Enterprise Products Partners L.P.