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Jonah System to Add Gathering, Capacity for Green River Basin Growth
TEPPCO Partners LP will spend $45 million to expand its Green River Basin-based Jonah System, adding 55 MMcf/d to the gathering capacity of the Pinedale Field lateral and increasing the mainline capacity by 150 MMcf/d. The expansion will handle growth from the Pinedale Field and reduce operating pressures on the gathering lines. The Pinedale Field lateral’s capacity will be increased to 250 MMcf/d and the mainline capacity will jump to 880 MMcf/d from its current 739 MMcf/d.
The expansion will add 43 miles of 20-inch and 24-inch diameter pipe, 9,000 horsepower of compression and enhanced liquid handling facilities at two compressor stations. The project is expected to be completed and in service by the fourth quarter.
“This project demonstrates the organic growth opportunities resulting from TEPPCO’s investment in Jonah,” said William L. Thacker, CEO of Texas Eastern Products Pipeline Co. LLC, TEPPCO’s general partner. “This project expands Jonah’s gathering capabilities into the emerging Pinedale Field and shows TEPPCO’s commitment to providing quality gathering services to the region’s producers.”
Gas gathered on the Jonah System is primarily processed by others and delivered to several interstate pipeline systems that provide access to a number of West Coast, Rocky Mountain and Midwest markets. The Jonah System is commercially managed and operated by Duke Energy Field Services LLC (DEFS), which owns Texas Eastern.
Thacker, who joined Teppco in 1992, also announced he would retire May 1 and will be succeeded by two executives, Jim W. Mogg as chairman and Barry R. Pearl as CEO. Pearl is the current TEPPCO president and COO, and Mogg is chairman, president and CEO of DEFS.
TEPPCO also reported that first quarter net income was up 4%, despite a warm winter and reduced demand for its refined products. Growth came in the upstream segment as well as contributions from acquisitions, which boosted first quarter net income to $26.8 million (46 cents per unit), compared with $25.7 million (55 cents) for the same period a year ago. The number of units outstanding was 46.3 million, up from 38.9 million last year. Thomson Financial/First Call analysts had pegged average earnings at 49 cents per unit.
TEPPCO’s revenues dropped almost 20% to $631.1 million from $785.2 million in the first quarter of 2001. Expected earnings before interest, tax, depreciation and amortization in 2002 will be in the range of $240 million to $260 million, the company said. Net income for the year was expected to range from $90 million to $110 million.
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