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Enterprise Unloads Most of ETE Units

Enterprise Products Partners LP announced Tuesday that it has agreed to sell about 22.8 million common units of Energy Transfer Equity LP (ETE) to undisclosed purchasers for approximately $825.1 million.

Houston-based Enterprise said it would use the proceeds from the sale -- which is expected to close in January 2012 -- for general partnership purposes and capital projects.

Shares of Enterprise and ETE both lost value in trading Wednesday on the New York Stock Exchange. ETE closed at $40.51/share (down 69 cents, or 1.68%) while Enterprise stock closed at $45.53/share (down 5 cents, or 0.11%).

Enterprise spokesman Randy Burkhalter told Bloomberg that the sale will leave Enterprise with about 6.5 million common units of Dallas-based ETE, down more than 83% from the 39 million units it held in May. He said Enterprise began purchasing ETE units in 2007 to expand its footprint in the natural gas industry, but has since found other ways to invest in the market.

Last month Enterprise announced that shale production -- natural gas, natural gas liquids (NGLs) and crude oil -- boosted the company's earnings in 3Q2011. The company's assets include about 50,000 miles of pipelines, 192 million bbl of storage capacity for crude oil, refined products and NGLs, and 8 Bcf of storage capacity for natural gas.

Earlier this month shareholders of Southern Union Co. voted overwhelmingly in favor of a proposed $9.4 billion merger with ETE which, once completed, would create the largest natural gas pipeline company in the United States (see Shale Daily, Aug. 18; July 20).

ETE filed suit against Enterprise and Enbridge Inc. in October, claiming the former broke the terms of a joint venture (JV) agreement with ETE to build a 584-mile pipeline to transport crude oil from Cushing, OK.

Enterprise, Enbridge and Anadarko Petroleum Corp. have since announced their own JV to build the 580-mile Texas Express Pipeline (TEP), which would carry NGLs from Skellytown to Mont Belvieu, TX. The TEP would have an initial capacity of 280,000 b/d but could be expanded to 400,000 b/d.

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