Houston’s Enterprise Products Partners L.P. has purchasedAcadian Gas LLC’s extensive southern Louisiana assets, whichinclude 1,000-plus miles of pipeline, more than 1 Bcf/d of capacityand a leased natural gas storage facility with 3.4 Bcf of capacityfrom Coral Energy LLC for $226 million in cash. Coral Energy, alsobased in Houston, is an affiliate of Shell Oil Co.

Acadian’s assets include the Acadian, Cypress and Evangelinenatural gas pipeline systems, linking natural gas from onshoredevelopments and offshore pipelines, continental shelf anddeepwater production to local gas distribution companies, electricgeneration and industrial customers in the Baton Rouge-NewOrleans-Mississippi River corridor.

The systems have interconnections with 12 interstate pipelinesand four intrastate pipelines as well as a bi-directionalinterconnect with Henry Hub. The leased natural gas storagefacility is located in Napoleonville, LA.

“Acadian is a major and strategic investment for Enterprise,”said O.S. “Dub” Andras, Enterprise CEO. “Acadian is one of the bestnatural gas pipeline assets in Louisiana and has long-standingrelationships with high quality customers.” The system, he said,was complementary to Enterprise’s NGL asset base with “excellentprospects” for growth, and was well positioned to benefit fromexpected increased natural gas production.

The acquisition is expected to expand Enterprise’s platform offee-based, midstream energy services to include natural gastransportation and storage. “We believe there will be many growthand investment opportunities in natural gas and NGL infrastructureas producers respond to increasing demands for natural gas to fuelpower generation.” Andras said the transaction would be immediatelyaccretive to earnings and cash flow, and said it is expected toclose in the fourth quarter.

Enterprise’s integrated operations are geographically focused onthe Gulf Coast, which accounts for about 55% of domestic NGLproduction and 75% of U.S. NGL demand. It ranks as the secondlargest publicly traded partnership, with a value of nearly $2.6billion, and has made more than $750 million in new investmentssince it was founded in 1968.

Last year, Enterprise completed a $275 million acquisition of TejasNatural Gas Liquids LLC, Shell’s Louisiana and Mississippi NGLbusiness, and entered into a 20-year natural gas processing agreementwith Shell to process its current and future Gulf of Mexico production(see Daily GPI, Sept. 22,1999). Enterprise’s strategic venture partners include Shell,Exxon Mobil, BP Amoco, Texaco, Williams, Sun Oil and Duke Energy.

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