|Enterprise to Construct New Natural Gas Pipeline Serving Barnett Shale Play of North Texas|
HOUSTON--(BUSINESS WIRE)--Nov. 10, 2006--Enterprise Products Partners L.P. (NYSE:EPD) today announced that its affiliate, Enterprise Texas Pipeline L.P., will extend its intrastate natural gas pipeline system with the construction of a new 178-mile pipeline that will provide up to 1.1 billion cubic feet per day (Bcf/d) of takeaway capacity for natural gas production in the growing Barnett Shale area of North Texas. The new Enterprise Sherman Extension is supported by long-term contracts with Devon Energy Corporation (NYSE:DVN), the largest producer in the Barnett Shale area, and significant indications of interest from leading producers and gatherers in the basin, as well as shippers on Enterprise's Texas intrastate pipeline system. At its terminus, the new pipeline system will make deliveries into Boardwalk Pipeline Partners L.P.'s (NYSE:BWP) Gulf Crossing Expansion Project, which will provide export capacity for Barnett Shale natural gas production to multiple delivery points in Louisiana, Mississippi and Alabama that offer access to attractive markets in the Northeast and Southeast United States. In addition, the Sherman Extension provides natural gas producers in East Texas and the Waha area of West Texas with access to these higher value markets through Enterprise's Texas intrastate pipeline system.
The Sherman Extension will be comprised of a 30 and 36-inch diameter pipeline originating at a central delivery point on Enterprise's Texas intrastate pipeline system near Morgan Mill, Texas (southwest of Fort Worth), and will extend through the center of the current Barnett Shale development area to Sherman, Texas. From there, it will connect with Boardwalk's 42-inch Gulf Crossing Expansion, which features interconnects with seven major interstate pipelines, including the Transcontinental Pipeline Company system that accesses markets in the Northeast. The Sherman Extension is estimated to cost approximately $400 million, most of which will be spent in 2008, and is expected to be placed into service in the fourth quarter of 2008. Furthermore, Enterprise has the option to acquire up to a 49 percent interest in the Gulf Crossing project, subject to certain conditions.
"With production expected to nearly double over the next six years, the Barnett Shale play represents one of the most prolific natural gas development areas in the country," said Enterprise President and CEO Robert G. Phillips. "Current pipeline capacity in the region is not sufficient to accommodate this growth, creating an outstanding opportunity for Enterprise to combine elements of its North Texas midstream infrastructure with the new Sherman Extension project to provide a comprehensive export solution for producers and gatherers from this region. Further, Enterprise views this project as an important expansion of our existing Texas intrastate system, providing Enterprise with the additional flexibility to transport growing volumes from the East Texas Bossier Trend and as far away as the Waha area of the Permian Basin to price-competitive markets in the eastern U.S."
Terrence Ruder, vice president and general manager of Devon Energy Corporation's Marketing & Midstream Division, stated, "The Enterprise and Boardwalk projects will provide a secure outlet to an expanding market area for Devon's growing natural gas production in the Texas Barnett Shale and Oklahoma Woodford Shale plays."
In addition to volumes received from producers and gatherers in the Barnett Shale region, the Sherman Extension will allow Enterprise to provide 200 million cubic feet per day (MMcf/d) of natural gas capacity from the Waha area in West Texas to Morgan Mill. The project will also make 400 MMcf/d of capacity from East Texas available on Enterprise's existing 36-inch intrastate pipeline. Moreover, the new project will provide greater downstream market access for both current and planned gathering systems located throughout the Barnett Shale development area. As part of its commitment to the project, Devon has subscribed for capacity on the new pipeline to accommodate a portion of the company's current and future Barnett Shale production and has extended existing firm transportation contracts on Enterprise's Texas intrastate pipeline system until 2015.
The Barnett Shale is considered to be one of the largest unconventional resource plays in North America, covering approximately 14 counties and over 7 million acres in the Fort Worth basin of North Texas. Current natural gas production is estimated at 2 Bcf/d from approximately 5,500 wells. Approximately 130 rigs are currently estimated to be working to develop Barnett Shale acreage in the region. According to the United States Geological Survey, "the Barnett Shale play has total resource potential of approximately 26 trillion cubic feet of natural gas."
Enterprise Products Partners L.P. is one of the largest publicly traded energy partnerships with an enterprise value of approximately $17 billion, and is a 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 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 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), one of the nation's largest publicly traded GP partnerships with an enterprise value of approximately $3 billion. For more information on Enterprise GP Holdings L.P., visit its website at www.enterprisegp.com.
Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration, production and property acquisitions. Devon is one of the world's leading independent oil and gas producers and is included in the S&P 500 Index. For additional information, visit http://www.devonenergy.com.
Boardwalk Pipeline Partners, LP is a master limited partnership engaged through its subsidiaries, Texas Gas Transmission, LLC and Gulf South Pipeline Company, LP, in the interstate transportation and storage of natural gas. Boardwalk's two interstate natural gas pipeline systems have approximately 13,470 miles of pipeline and underground storage fields with aggregate working gas capacity of approximately 146 Bcf.
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.