Shell Oil affiliate Tejas Natural Gas Liquids LLC and EnterpriseProducts Partners L.P. have formed joint venture Entell NGLServices LLC to develop a gas liquids transportation anddistribution system. Entell’s initial asset base will includesubstantially all of Enterprise’s existing pipeline facilities inLouisiana. In addition, Entell will create a pipeline systemlinking storage at Breaux Bridge, LA, to Mont Belvieu, TX. Entellanticipates the system being capable of distributing products fromkey NGL sources in southern Louisiana directly to major NGLmarkets, including the lower Mississippi River corridor, Dixiepipeline, Lake Charles, LA, and Mont Belvieu.

Entell is a limited liability company in which Enterprise andTejas each have a 50% interest. Entell owns 250 miles of pipeconnecting several market centers in Louisiana, with the capacityto move 80,000 barrels/d. Planned expansions will boost thatnumber to more than 110,000 barrels/d.

“The synergies that Tejas’ growing NGL production andEnterprise’s asset base bring to Entell support Tejas’ desire togrow its downstream NGL storage and distribution systems bothwithin the Louisiana market and through linkage to Mont Belvieu,”said Curtis Frasier, executive vice president of Tejas Energy.

“Enterprise has been a natural gas liquids fractionation,storage and pipeline service provider in southern Louisiana andMont Belvieu, TX, for more than 25 years,” said O.S. Andras,Enterprise president. “Combining our Louisiana pipeline system withTejas through Entell creates a link between these two major marketareas.”

Tejas Natural Gas Liquids LLC is responsible for processing andmarketing gas liquids from Shell’s Gulf of Mexico production. Thecompany ranks as the largest NGL producer in South Louisiana.Facilities operated by Enterprise at Mont Belvieu include one ofthe largest NGL fractionation and MTBE production facilities andthe largest butane isomerization complex in the United States andtwo propylene fractionation units.

The company also owns and operates a network of about 500 milesof pipeline throughout the Gulf Coast and a fractionation facilityin Petal, MS, with capacity of 7,000 barrels per day. Thepartnership leases and operates one of only two commercial NGLimport-export terminals on the Gulf Coast and NGL storage wellswith about 35 million barrels of capacity.

Last month Royal/Dutch Shell Group said it plans to sell 40% ofits chemicals business and take a related fourth quarter $4.5billion after-tax charge as part of a major restructuring. Otherassets to be sold include Transok, the 6,500-mile Oklahomaintrastate gas transmission and gathering system that Shellsubsidiary Tejas Gas bought in May 1996. Tejas paid $890 millionfor Transok, which makes it one of the largest midstreamtransactions ever done. In a statement issued by Tejas last month,the company said it would “immediately initiate a competitive salesprocess, with an anticipated closing of the transaction in thefirst half of 1999.”

Tejas said the sale is “consistent with the recognition that thelong-term success of our midstream business is dependent oncapturing the key synergies between Tejas, Coral and Shell’sproducing assets. We view our Gulf Coast transportation, storageand NGL operations as the assets best aligned to complement Coral’sindustrial marketing activities and the growth of our powergeneration business. The sale of Transok will enhance our capitalresources and our capability to concentrate on these synergies.”

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