Enterprise Products Partners To Purchase Two Natural Gas Systems

May 2010 Vol. 237 No. 5

Enterprise Products Partners L.P. has executed definitive agreements to purchase two natural gas gathering and treating systems from subsidiaries of M2 Midstream LLC in a negotiated transaction for $1.2 billion.

These systems are located in northwest Louisiana and East Texas and gather natural gas produced from the Haynesville/Bossier Shales and the Cotton Valley and Taylor Sands formations.

The State Line system is located in Desoto and Caddo Parishes, LA and Panola County, TX. The system includes 138 miles of natural gas pipelines with a capacity of 400 MMcf/d and two treating plants. The State Line system began operations in February 2009 and is gathering 260 MMcf/d. A 50-mile expansion of this system is expected to be completed in June and will increase its capacity to 700 MMcf/d. The State Line system is supported by long-term acreage dedications and volumetric commitments from producers.

The State Line system will interconnect with the 42-inch Haynesville Extension of Enterprise’s Acadian natural gas pipeline system. The Haynesville Extension is under construction and expected to be completed in the third quarter of 2011. Once connected to the Haynesville Extension, the State Line system can be expanded to 1.2 Bcf/d for a nominal cost.

The Fairplay system is located in Rusk, Panola, Gregg and Nacogdoches counties, TX. The system includes 249 miles of natural gas pipelines (including 62 miles leased from third parties) with a capacity of 285 MMcf/d, and is gathering 180 MMcf/d. This system is expected to be connected to the Enterprise Texas Pipeline system by first quarter of 2011. The Fairplay system is also supported by long-term acreage dedications and volumetric commitments from producers.