El Paso Corp. amended an agreement related to the proposed merger of GulfTerra Energy Partners LP and Enterprise Products Partners LP that will cut El Paso’s stake in the general partner of the merged organization in exchange for $370 million in cash.

“This transaction allows El Paso to efficiently monetize an asset at an attractive value while retaining an interest in what promises to be a highly successful midstream company,” said El Paso CEO Doug Foshee. “With the proceeds from this transaction, we have now announced or sold $3.4 billion of assets, putting us within the range of the $3.3 billion to $3.9 billion of asset sales we originally targeted for sale by the end of 2005. While this transaction was not included in our long-range plan, we believe it will provide us added flexibility in meeting the goals of that plan.”

Under the terms of the original transaction in December 2003, El Paso agreed to sell a 50% stake in the general partner of GulfTerra along with 13.8 million GulfTerra common units and certain processing assets for $1 billion in cash. As part of the deal, El Paso would retain a 50% share of the general partner of the combined company with about 13.5 million common units of Enterprise following the close of the merger.

Under the amended agreement, El Paso interest in the general partner has been reduced to 9.9%. El Paso will also have the right, beginning six months from closing, to exchange its retained general partner interest for Enterprise common units having an equivalent aggregate cash distribution.

The incremental $370 million in cash received by El Paso at closing will bring its net cash proceeds from the overall transaction to $1.35 billion.

“This amendment and the resulting increase in the ownership interest of Enterprise Products Co. in our general partner further underscores the expectations that [Enterprise Chairman] Dan Duncan and I have for the merger of Enterprise and GulfTerra,” said Enterprise CEO O.S. “Dub” Andras. “We are making good progress toward completing the merger and still anticipate that the merger will be completed during the second half of this year.”

Enterprise Products Partners LP is the second-largest publicly traded midstream energy partnership, with an enterprise value of $7 billion.

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