Enterprise Products Partners LP became one of the largest liquids storage operators in the country with the acquisition of a natural gas liquids and petrochemical liquids storage business from Diamond-Koch, L.P. and Diamond-Koch III, which are owned by affiliates of Valero Energy and Koch Industries Inc. The purchase price was $129 million in cash.

The acquired storage facilities consist of 30 salt dome storage caverns with a total permitted capacity of 77 million barrels. The facilities provide storage services for mixed natural gas liquids, ethane, propane, butanes, natural gasoline and olefins, such as ethylene, polymer grade propylene, chemical grade propylene and refinery grade propylene. The caverns are located in Mont Belvieu, TX, and serve the largest petrochemical and refinery complex in the United States.

Enterprise CEO O.S. “Dub” Andras said the acquisition will “allow us to expand our service capabilities in serving our customers and will provide opportunities to create value for our partnership through its integration with our network of fractionation, distribution and import/export terminalling assets on the U.S. Gulf Coast. During 2001, we generated over $100 million of cash in excess of the distributions paid to our partners. As a result, we will pay for this acquisition using cash on hand and without occurring additional debt or needing to issue additional equity. The acquisition should provide annual cash accretion to our partners of approximately $0.12 per unit on a fully diluted basis.”

With this deal, Enterprise has spent $750 million on buying or building new fee-based, pipeline and storage assets over the past two years. Enterprise is the second largest publicly traded, midstream energy partnership with an enterprise value of $5 billion.

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