Enterprise, TEPPCO agree to merger

Enterprise Products Partners LP, TEPPCO Partners LP, and Enterprise GP Holdings LP announced that Enterprise and TEPPCO have entered into definitive agreements to merge Enterprise and TEPPCO (along with TEPPCO’s general partner) to form a publicly traded energy partnership with an enterprise value of more than $26 billion.

The combined partnership, which will retain the name Enterprise Products Partners LP, will access the largest producing basins of natural gas, natural gas liquids (NGLs), and crude oil in the United States, and serve some of the largest consuming regions for natural gas, NGLs, refined products, crude oil, and petrochemicals.

The combined partnership will own almost 48,000 miles of pipelines comprised of more than 22,000 miles of NGL, refined product, and petrochemical pipelines; more than 20,000 miles of natural gas pipelines; and more than 5,000 miles of crude oil pipelines. The merged partnership’s logistical assets will include approximately 200 million barrels of NGL, refined product, and crude oil storage capacity; 27 billion cubic feet of natural gas storage capacity; one of the largest NGL import/export terminals in the United States, located on the Houston Ship Channel; 60 NGL, refined product, and chemical terminals spanning the nation; and crude oil import terminals on the Texas Gulf Coast. The combined partnership will own interests in 17 fractionation plants with more than 600,000 barrels per day of net capacity; 25 natural gas processing plants with a net capacity of approximately 9 billion cubic feet per day; and 3 butane isomerization facilities with a capacity of 116,000 barrels per day.

Under the terms of the definitive agreement, TEPPCO and TEPPCO’s general partner, Texas Eastern Products Pipeline Co LLC, will become wholly owned subsidiaries of Enterprise.

After the closing of the merger, Enterprise expects affiliates of EPCO Inc, including Enterprise GP, will own approximately 29.5% of Enterprise’s outstanding limited partner units and that Enterprise GP will own about 3.4% of Enterprise’s outstanding limited partner units.

The executive management team of the general partner of Enterprise after the merger closes will continue to include Dan L Duncan, chairman; Michael A Creel, president and chief executive officer; A J Teague, executive vice-president and chief commercial officer; Richard H Bachmann, executive vice-president and chief legal officer; William Ordemann, executive vice-president and chief operating officer; and W Randall Fowler, executive vice-president and chief financial officer.

The completion of the merger is subject to the approval of at least a majority of the outstanding TEPPCO units. Completion is expected to occur during the fourth quarter of 2009.

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