Enterprise Products Partners LP, Houston TX, has announced that its operating partnership has executed a letter of intent to acquire storage facilities from Diamond-Koch, LP and Diamond-Koch III, LP, which are both jointly owned by affiliates of Ultramar Diamond Shamrock Corporation and Koch Industries Inc.
The storage facilities consist of 30 salt dome storage caverns with a total permitted capacity of 77 million barrels. The facilities provide storage services for mixed natural gas liquids, ethane, propane, butanes, natural gasoline, and olefins, such as ethylene, polymer grade propylene, chemical grade propylene, and refinery grade propylene. The caverns are located in Mont Belvieu, TX, and serve the largest petrochemical and refinery complex in the United States.
"We are very pleased to execute this agreement with Diamond-Koch to acquire this premier storage business. This is an attractive fee-based business with long-term contracts. These assets will integrate well with our fractionation and pipeline facilities at Mont Belvieu," said O S "Dub" Andras, president and chief executive officer of Enterprise. "Upon completion, this acquisition will be accretive to our partnership's cash flow."
The completion of this transaction is subject to the execution of a definitive agreement approved by the board of directors of the respective parties and the receipt of regulatory approvals. The parties expect the transaction to be completed by December 31, 2001.
Enterprise Products Partners LP is the second largest publicly traded, midstream energy partnership with an enterprise value of approximately $5.1 billion. Enterprise is a leading provider of midstream energy services to producers and consumers of natural gas and natural gas liquids. The company's services include natural gas transportation, processing, and storage, and natural gas liquids fractionation (or separation), transportation, storage, and import/export terminaling. The company's assets are geographically focused on the United States' Gulf Coast, which accounts for approximately 55 percent of both domestic natural gas and natural gas liquids production and 75 percent of domestic natural gas liquids demand.