Enterprise Purchases Coral's Acadian Gas Pipeline
Houston's Enterprise Products Partners L.P. has purchased Acadian Gas
LLC's extensive southern Louisiana assets, which include 1,000-plus miles
of pipeline, more than 1 Bcf/d of capacity and a leased natural gas storage
facility with 3.4 Bcf of capacity from Coral Energy LLC for $226 million
in cash. Coral Energy, also based in Houston, is an affiliate of Shell
Acadian's assets include the Acadian, Cypress and Evangeline natural
gas pipeline systems, linking natural gas from onshore developments and
offshore pipelines, continental shelf and deepwater production to local
gas distribution companies, electric generation and industrial customers
in the Baton Rouge-New Orleans-Mississippi River corridor.
The systems have interconnections with 12 interstate pipelines and four
intrastate pipelines as well as a bi-directional interconnect with Henry
Hub. The leased natural gas storage facility is located in Napoleonville,
"Acadian is a major and strategic investment for Enterprise,"
said O.S. "Dub" Andras, Enterprise CEO. "Acadian is one
of the best natural gas pipeline assets in Louisiana and has long-standing
relationships with high quality customers." The system, he said, was
complementary to Enterprise's NGL asset base with "excellent prospects"
for growth, and was well positioned to benefit from expected increased
natural gas production.
The acquisition is expected to expand Enterprise's platform of fee-based,
midstream energy services to include natural gas transportation and storage.
"We believe there will be many growth and investment opportunities
in natural gas and NGL infrastructure as producers respond to increasing
demands for natural gas to fuel power generation." Andras said the
transaction would be immediately accretive to earnings and cash flow, and
said it is expected to close in the fourth quarter.
Enterprise's integrated operations are geographically focused on the
Gulf Coast, which accounts for about 55% of domestic NGL production and
75% of U.S. NGL demand. It ranks as the second largest publicly traded
partnership, with a value of nearly $2.6 billion, and has made more than
$750 million in new investments since it was founded in 1968.
Last year, Enterprise completed a $275 million acquisition of Tejas
Natural Gas Liquids LLC, Shell's Louisiana and Mississippi NGL business,
and entered into a 20-year natural gas processing agreement with Shell
to process its current and future Gulf of Mexico production (see NGI, Sept. 27, 1999). Enterprise's strategic venture
partners include Shell, Exxon Mobil, BP Amoco, Texaco, Williams, Sun Oil
and Duke Energy.
Carolyn Davis, Houston
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