Enterprise Products Partners LP said its affiliate, Enterprise Gas Processing LLC, has completed a $38 million purchase of the Pioneer silica gel natural gas processing plant located near Opal, WY, from Teppco Partners LP and has already started construction on an expansion project that will double the plant's processing capacity to 600 MMcf/d later this year.
As part of the transaction, Enterprise purchased Teppco's rights to process gas from the rapidly growing Jonah and Pinedale fields in southwestern Wyoming. Enterprise said the deal would be immediately accretive to its earnings. The company also said engineering work continues on a previously announced new 650 MMcf/d cryogenic natural gas processing facility to be located adjacent to the silica gel plant.
Both projects are on schedule with the expansion of the silica gel plant expected to be completed by mid-2006 and the new cryogenic plant expected to begin service by the end of the third quarter of 2007. Gas liquids from the new cryogenic processing plant will be transported to market through Enterprise's Mid-America Pipeline and Seminole Pipeline systems, which extend from the Rockies to the Texas Gulf Coast region, and will be fractionated at Enterprise's new fractionators in Hobbs, TX, or at the partnership's complex in Mont Belvieu, TX.
"This is an accretive transaction that provides an attractive opportunity to extend our natural gas processing franchise into one of the fastest growing natural gas producing regions in North America," said Enterprise CEO Robert G. Phillips. "The cryogenic plant will have the flexibility to operate from a conditioning mode to full recovery, and will support our downstream pipeline and fractionator expansions which are central to Enterprise's recently announced Rocky Mountain expansion strategy."
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