Enterprise Acquires Interests in Natural Gas Pipelines.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--Jan. 29, 2001

Enterprise Products Partners L.P. (NYSE:EPD) announced today that its operating subsidiary has acquired ownership interests in five natural gas pipeline systems and related equipment in the central Gulf of Mexico from El Paso Energy Partners, L.P. for $112 million in cash. These systems total approximately 725 miles of pipeline with an aggregate capacity of approximately 2,850 million cubic feet per day ("MMcfd").

Enterprise acquired 100 percent of Sailfish Pipeline Company, L.L.C. and Moray Pipeline Company, L.L.C. Sailfish owns a 25.67 percent interest in each of Manta Ray Offshore Gathering Company, L.L.C. and Nautilus Pipeline Company, L.L.C. Moray owns a 33.92 percent interest in Nemo Gathering Company, L.L.C.

Enterprise and Shell Gas Transmission, LLC have formed Starfish Pipeline Company, LLC, which acquired 100 percent of Stingray Pipeline Company, L.L.C. and West Cameron Dehydration Company, L.L.C. from Deepwater Holdings, L.L.C., an affiliate of El Paso Energy Partners. As part of the transaction, Starfish also acquired certain laterals attached to Stingray. Enterprise and Shell Gas Transmission each own a 50 percent interest in Starfish Pipeline. Shell Gas Transmission will be responsible for the commercial and physical operations of Stingray and the dehydration facility.

"We are very excited with this acquisition. This transaction significantly expands our natural gas pipeline base of assets to include some of the most attractive pipelines in the central Gulf and integrates well with our onshore natural gas liquid system and the Acadian Gas system. These pipeline systems are each strategically located in the Gulf to link many of the new, highly prolific deepwater developments to a number of onshore interstate and intrastate pipeline systems that serve multiple end use markets throughout the United States," stated O.S. "Dub" Andras, president and CEO of Enterprise.

"We expect this transaction will provide $0.11 per partnership unit of incremental cash flow in 2001 increasing to $0.18 per unit in 2002 as production commences from deepwater developments," said Andras. "This acquisition is consistent with our objective to grow our cash flow from fee-based businesses. This transaction, the completion of the Acadian Gas acquisition, the Sea Robin exchange agreement and other Lou-Tex NGL pipeline agreements should provide cash accretion of approximately $0.34 per unit in 2001 and $0.47 per unit in 2002. Considering these transactions, since our initial public offering in July 1998, we have invested over $1.2 billion in acquisitions and growth projects."

The Manta Ray and Nautilus pipeline systems are each jointly owned with Shell Gas Transmission and Marathon Gas Transmission Company Inc. Shell and Marathon own a 50 percent and a 24.33 percent ownership interest, respectively, in each of the two pipelines. Manta Ray is comprised of 225 miles of unregulated natural gas pipelines with a total capacity of approximately 750 MMcfd and other related facilities. Manta Ray gathers natural gas from continental shelf and deepwater developments for delivery into Nautilus and other pipelines. Manta Ray will receive deliveries from Nemo, which is currently under development.

Nautilus consists of a 101-mile, 30" natural gas pipeline with a capacity of 600 MMcfd that transports natural gas from Manta Ray at its platform in Ship Shoal Block 207, offshore Louisiana, to onshore delivery point connections downstream. The pipeline connects to the Neptune natural gas processing plant in St. Mary Parish, La., in which Enterprise has a 66 percent ownership interest. Nautilus is regulated by the Federal Energy Regulatory Commission ("FERC").

Nemo, a joint project with Shell Gas Transmission, is a natural gas pipeline that will connect Shell's Brutus and Glider deepwater developments to the Manta Ray gathering system. It will consist of approximately 24 miles of 20-inch pipeline with a capacity of 300 MMcfd. Nemo is expected to be completed in the fourth quarter of 2001. The remaining 66.08% ownership interest in Nemo is held by Shell Gas Transmission.

Stingray is a 325-mile FERC regulated natural gas pipeline that transports natural gas and injected condensate from approximately 53 fields in the High Island, West Cameron, East Cameron, Vermilion and Garden Banks areas to onshore interstate and intrastate pipelines in West Cameron Parish, La. The pipeline system has a capacity of 1,200 MMcfd.

West Cameron Dehydration is an unregulated dehydration facility located at the onshore terminus of Stingray with a capacity of 950 MMcfd. The transaction also includes 17 laterals which are attached to Stingray and are in the process of being acquired from Natural Gas Pipeline Company of America. The ownership interests in these laterals, which total approximately 53 miles, range from 25 percent to 100 percent.

Enterprise Products Partners L.P. is the second largest publicly traded, midstream energy partnership with an enterprise value of approximately $3.0 billion. Enterprise is a leading integrated provider of processing, fractionation, storage, transportation and terminalling services to producers and consumers of natural gas liquids ("NGLs") and other liquid hydrocarbons. The Company's assets are geographically focused on the United States' Gulf Coast, which accounts for approximately 55 percent of domestic NGL production and 75 percent of domestic NGL demand.

This press release includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 based on the beliefs of the company, as well as assumptions made by, and information currently available to, management. Although Enterprise believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.