Enterprise Acquires Natural Gas Liquids Pipelines from Williams for $1.2 Billion

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Aug 1, 2002 (BUSINESS WIRE) — Enterprise Products Partners L.P. (NYSE:EPD) announced that its operating partnership has completed the acquisition of Mid-America Pipeline Company and Seminole Pipeline Company from affiliates of The Williams Companies Inc. for approximately $1.2 billion in cash.

The acquisition includes the purchase of a 98% ownership interest in Mapletree, LLC, which owns 100% of Mid-America Pipeline Company and certain propane terminals. Mid-America Pipeline is a major natural gas liquids ("NGL") pipeline system with 7,226 miles of pipe and average transportation volumes of approximately 850,000 barrels per day. Its 2,548-mile Rocky Mountain system transports mixed NGLs extracted from natural gas production in the Rocky Mountain Overthrust and San Juan Basin areas to Hobbs, Texas. The 2,740 mile-Conway North segment links the large NGL market hub in Conway, Kan., with petrochemical and refining customers and propane markets in the upper Midwest. The Conway South system connects the Conway hub with refineries in Kansas and transports mixed NGLs from Conway to Hobbs. The Mid-America Pipeline is regulated by the Federal Energy Regulatory Commission and by state agencies in respect of intrastate transportation services.

Enterprise also purchased a 98% ownership interest in an affiliate of Williams, Oaktree, LLC, which owns an 80% equity interest in Seminole Pipeline Company. The Seminole Pipeline, a 1,281-mile pipeline, transports mixed NGLs and NGL products from Hobbs, Texas and the Permian Basin to Mont Belvieu, Texas, the largest NGL market hub in the United States. The average volume transported on Seminole is approximately 260,000 barrels per day.

"We are excited to announce the acquisition of these outstanding pipeline assets," stated O.S. "Dub" Andras, president and chief executive officer of Enterprise. "This is a transforming transaction for Enterprise because it extends our platform of assets beyond the Gulf Coast and gives us a strong business position in the Midwest and linkage to Canadian NGL production. These pipelines integrate our Mont Belvieu and Gulf Coast NGL business with all of the major natural gas and NGL supply basins in North America. We will now provide integrated midstream energy services to the two fastest growing natural gas basins in the United States — the deepwater Gulf of Mexico and the Rocky Mountain Overthrust."

Andras continued, "We know these assets very well. Enterprise was a charter partner in the formation and development of the Seminole Pipeline in 1981 and one of its pipelines terminates at our Mont Belvieu complex. Several key members of our management team, who were formerly with MAPCO Inc., had commercial responsibilities for the Mid-America Pipeline and Seminole Pipeline for many years."

"These pipeline businesses are excellent for a partnership because of the fee-based nature of the cash flows and the excellent growth prospects. Going forward on a normalized basis, we expect 85% to 90% of Enterprise's total gross operating margin will be generated from our fee-based businesses. The earnings before interest and taxes and depreciation ("EBITDA") for 2003 associated with our ownership interests and the synergies associated with the consolidation of these assets with our existing platform of assets is expected to be approximately $180 million," said Andras.

"Our plans for permanent financing include the issuance of equity, including partnership equity for institutional investors, and debt in amounts which are consistent with our objective to maintain our financial flexibility and solid investment grade balance sheet. Based on our assumptions of EBITDA, sustaining capital expenditures and permanent financing arrangements, we believe this acquisition should provide cash accretion for our limited partners of approximately $0.24 per unit, or 18% of our current cash distribution rate to partners," stated Andras.

Joint Lead Arrangers Wachovia Securities Inc. and Lehman Brothers, and Arranger RBC Capital Markets, have provided a $1.2 billion senior unsecured credit facility in support of the transaction.

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