- About Us
|Print | E-mail | RSS Feeds | Financial Tear Sheet|
|Enterprise Announces Initial Flows on Constitution Oil and Gas Pipelines|
HOUSTON--(BUSINESS WIRE)--April 12, 2006--Enterprise Products Partners L.P. (NYSE:EPD) announced today that it has received initial flows of crude oil and natural gas into its Constitution oil and natural gas pipelines from Kerr-McGee's 100 percent-owned Constitution field and Kerr-McGee's and Noble Energy's 50 percent each-owned Ticonderoga field in the south Green Canyon area of the Gulf of Mexico. Current production into the pipelines from two Ticonderoga wells and one Constitution well is approximately 32,000 barrels of oil per day and 30 million cubic feet of natural gas per day, with five additional wells expected to begin flow from Constitution in 2006. Construction of the wholly owned pipelines was completed in late 2005 below budget, and Enterprise received initial production from the two fields in the first quarter of 2006.
The Constitution oil and natural gas pipelines are located in approximately 5,000 feet of water in the central Gulf of Mexico and are designed to provide gathering services for the Constitution and Ticonderoga fields, as well as other undeveloped blocks in the south Green Canyon area. The 32-mile, 16-inch natural gas pipeline has the capacity to transport up to 200 million cubic feet per day by connecting the fields to Enterprise's existing Anaconda Gathering System which gathers gas production from the Marco Polo area. The crude oil export pipeline is a 70-mile, 16-inch line with a capacity of approximately 100,000 barrels per day that connects the fields with the Cameron Highway Oil Pipeline and Poseidon Oil Pipeline systems at Cameron Highway's Ship Shoal 332B junction platform. Enterprise owns a 50 percent and 36 percent ownership interest in the Cameron Highway and Poseidon oil pipelines, respectively.
At the current volumes, our Constitution oil and gas pipelines will generate approximately $22 million in annualized gross operating margin, ramping up to approximately $48 million in annualized gross operating margin by the end of 2006 based on volumetric expectations. These amounts include the impact of both Constitution pipelines as well as additional equity earnings from our investments in Poseidon Oil Pipeline Company and Cameron Highway Oil Pipeline Company resulting from the expected increase in downstream volumes.
"Completion of the Constitution Oil and Gas Pipeline project extends the reach of our integrated value chain and provides flexible export solutions for producers developing the prolific south Green Canyon area," said Robert G. Phillips, Enterprise's President and Chief Executive Officer. "Producers in this area have access to crude oil markets in both Texas and Louisiana through our jointly owned Cameron Highway Oil Pipeline and Poseidon Oil Pipeline systems, and natural gas can reach markets on the Gulf Coast through our Anaconda Gathering System's interconnect to the ANR pipeline system. The integration of this project with our Cameron Highway and Poseidon oil pipelines provides additional cash flow to those assets, which enhances the cash return on our incremental investment in the Constitution pipelines."
The Constitution Pipeline project is part of Enterprise's previously announced portfolio of organic growth projects and was completed ahead of schedule.
Our estimates of annualized gross operating margin reflect a number of key assumptions including:
If throughput rates are 10% less than our projected amounts, annualized gross operating margin would be $2.2 million lower based on current rates and $4.9 million lower based on anticipated end-of-year rates. Since we do not prepare GAAP financial forecasts at the project level, we are not able to provide reconciliations between project-specific gross operating margin amounts and consolidated operating income, which includes all aspects of our operations.
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 32,776 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 its products by the petrochemical, refining or heating industries;
-- the effects of its debt level on its future financial and operating flexibility;
-- a decline in the volumes of NGLs delivered by its facilities;
-- the failure of its credit risk management efforts to adequately protect it against customer non-payment;
-- terrorist attacks aimed at its facilities; and
-- the failure to successfully integrate its operations with assets or companies, if any, that it may acquire in the future.
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.