8-KMaterial AgreementsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Material Agreement (Feb 17, 2006)

Filed February 17, 2006For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) announced on February 13, 2006, through its operating partnership, Enterprise Products Operating L.P., a material definitive agreement to expand the Jonah Gas Gathering System. This expansion, referred to as the "Jonah Expansion," will involve significant new compression and related facilities, with an estimated cost of approximately $200 million, to be financed by Enterprise. The project is expected to be completed by late 2006. The expansion will be structured as a joint venture between TEPPCO Partners, L.P. (TEPPCO) and Enterprise. Enterprise will initially be responsible for all construction and financing activities, making a substantial equity subscription. TEPPCO retains the option to return a portion, or even all, of Enterprise's subscription, which would adjust their respective ownership interests in the joint venture. This agreement highlights a strategic collaboration to enhance midstream infrastructure, with Enterprise taking the lead on development and TEPPCO having flexibility in its commitment.

Key Highlights

  • 1EPD, through its operating partnership, entered into a Letter of Intent for the Jonah Expansion of the Jonah Gas Gathering System.
  • 2The Jonah Expansion involves approximately $200 million in capital expenditures for new compression stations and facilities.
  • 3Enterprise Products Operating L.P. will be responsible for constructing and initially financing the entire expansion.
  • 4The project is structured as a joint venture between TEPPCO Partners, L.P. and Enterprise.
  • 5TEPPCO has the option to reduce its commitment by returning Enterprise's subscription, which would adjust ownership stakes in the joint venture.
  • 6The expansion is anticipated to be operational by late 2006.
  • 7This agreement signifies a material expansion of midstream infrastructure capacity.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce the entry into a material definitive agreement, specifically a Letter of Intent, regarding the expansion of the Jonah Gas Gathering System. This project, known as the Jonah Expansion, involves significant infrastructure development and a joint venture structure.

Enterprise Products Operating L.P. is expected to advance approximately $200 million to plan, engineer, and construct the Jonah Expansion. This advance will constitute an equity subscription in the joint venture. While Enterprise initially bears the full construction cost, TEPPCO has the option to return up to 100% of Enterprise's subscription, which would reduce Enterprise's equity interest and Enterprise's financial exposure accordingly. If TEPPCO returns 100%, the agreement terminates without liability.

TEPPCO Partners, L.P. will participate in the Jonah Expansion through a joint venture with Enterprise. While Enterprise will lead construction and initial financing, TEPPCO has a crucial option to decide its final level of participation by returning some or all of Enterprise's initial subscription. This flexibility allows TEPPCO to adjust its investment based on its strategic needs and financial considerations.

Several conditions must be met, including approval from the respective boards of directors and audit/conflicts committees of TEPPCO's and Enterprise's general partners. TEPPCO also requires a fairness opinion for its limited partners and confirmation that Enterprise has the ability to fund the subscription. Both parties need to receive necessary governmental and other consents.