Enterprise Ups Stake in NGL Business with Promix Deal
Enterprise Products Partners LP last week upped its stake in K/D/S Promix LLC to 50%, increasing its ownership in a fractionator in Napoleonville, LA, with the capacity to process up to 145,000 bbl/d of mixed natural gas liquids (NGLs) from processing plants on the Louisiana, Mississippi and Alabama Gulf Coast.
Enterprise, which operates the Promix facilities, bought the additional 16.7% interest for $27.5 million in cash from Koch Hydrocarbon Southeast Inc. The remaining 50% interest is owned by an affiliate of Dow Chemical Co. Promix also owns a pipeline system that gathers mixed NGLs from gas processing plants in Louisiana, five NGL salt dome storage wells and a barge loading facility on the Gulf Coast of Louisiana.
"The Promix and Norco fractionators are the hubs of our NGL value chain in Louisiana," said O.S. Andras, Enterprise CEO. "Promix is a critical link between natural gas processing plants on the Gulf Coast that remove NGLs from natural gas produced from some of the largest deepwater developments and the largest NGL consumers in Louisiana and, through our pipelines, to markets in Texas. We expect a substantial increase in NGL volumes flowing to Promix from the start up of developments in the Gulf of Mexico including those in the Southern Green Canyon area."
The transaction, which is expected to be immediately accretive to cash flow, "completes one of the most successful years in our 36-year history," said Andras. "In addition to our merger with GulfTerra Energy Partners, on a combined basis during 2004, we invested or announced projects totaling $2.3 billion."
Last year, Enterprise announced organic growth projects in which it will invest an additional $750 million over the next two years, including constructing the Independence Hub and Trail projects and the Constitution crude oil and natural gas pipeline projects in the deepwater Gulf of Mexico (see NGI, Nov. 15, 2004).
"As we look forward, we are very optimistic about the growth prospects for our partnership both from volume growth through existing facilities and opportunities to make investments to expand our system to support new natural gas, crude oil and NGL production from the key producing basins in the United States and Canada," said Andras.
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