Riding the contributions from its numerous acquisitions during the year, Houston-based Enbridge Energy Partners LP. reported net income for the fourth quarter of $32.3 million, or $0.54 per unit, compared with $26 million, or $0.52 per unit, for the fourth quarter of the prior year. The company also posted year-end net income of $111.7 million, or $1.93 per unit, compared to $78.1 million, or $1.76 per unit, for 2002.

“The improved performance was largely attributable to a full year’s contribution from the natural gas systems acquired late in 2002, which reflects the partnership’s strategy to diversify its sources of revenue through a conservative acquisition program,” said Dan C. Tutcher, president of the partnership’s management company.

“A second contributor to 2003 results was organic volume growth on the Lakehead system, which was primarily attributable to increased crude oil production from the Alberta Oil Sands,” Tutcher added. “It was gratifying to see the long-anticipated rise in Lakehead volumes begin to materialize during the fourth quarter and reach the highest level since 1998.”

The company also took the time to announce that the board of directors of its general partner approved construction of the previously announced East Texas System Expansion, subject to certain conditions. The partnership said it expects to conclude the arrangements over the next several weeks and commence construction to bring the gas pipeline expansion into service in the second quarter of 2005. The new $150 million pipeline will provide natural gas producers with an additional 500 MMcf/d of delivery capacity to the market and pipeline hub at Carthage, TX.

“The expansion of our East Texas System represents the largest organic growth opportunity to date for our natural gas systems,” Tutcher said. “It will combine with our recent acquisition of the North Texas System to significantly increase our footprint in the active U.S. Midcontinent region.

“We have been equally active on the liquids side of our business, announcing the major Southern Access expansion of the Lakehead System and acquiring crude oil delivery systems centered in Cushing, Oklahoma to add a new market focus for the partnership,” he added. “As well, our affiliation with Enbridge Inc. continues to generate synergies such as with Enbridge’s new Spearhead Pipeline. Once reversed, Spearhead is expected to take volumes from our Lakehead System at Chicago for delivery to Cushing, a new market outlet for western Canadian oil producers. All told, the previous six months have been very successful in terms of the partnership’s growth strategy.”

Looking ahead, Enbridge Partners estimates that operating income will increase to be between $200 and $215 million in 2004 and that depreciation will be approximately $125 million. Net income is estimated to increase to between $112 and $127 million for the year. The partnership said it is “reasonably likely” that it will make additional asset acquisitions in 2004.

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