8-KMaterial AgreementsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Material Agreement (Jun 3, 2010)

Filed June 3, 2010For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD), through its subsidiary Enterprise Products Operating LLC (EPO), has entered into definitive agreements with Duncan Energy Partners L.P. (DEP) and its subsidiaries, including Acadian Gas, LLC, to fund the construction of a significant new pipeline project. This 270-mile "Haynesville Extension" pipeline will connect the Haynesville shale formation in Louisiana to Acadian Gas's existing system. The total projected cost is approximately $1.56 billion, with EPO contributing 34% ($530 million) and DEP contributing 66% ($1.03 billion) on a pro rata basis via their respective subsidiaries. This initiative represents a substantial capital investment aimed at expanding EPD's infrastructure to capture production from the prolific Haynesville shale. The pipeline is expected to have a capacity of 1.8 Bcf per day, expandable to 2.1 Bcf per day, and is slated for service in the third quarter of 2011. Additionally, a separate $200 million loan agreement has been established where EPO is the lender to DEP, providing further financial flexibility for these projects. Investors should monitor the progress and cost management of this significant expansion, as it is crucial for EPD's future growth and market position.

Key Highlights

  • 1EPD, via EPO, is partnering with DEP to fund the construction of a new 270-mile Haynesville Extension pipeline.
  • 2The total project cost is estimated at $1.56 billion, with EPO (34%) and DEP (66%) sharing the costs.
  • 3EPO's share of the project cost amounts to approximately $530 million.
  • 4The pipeline will have an initial capacity of 1.8 Bcf/day, with potential expansion to 2.1 Bcf/day.
  • 5Commercial service for the Haynesville Extension is anticipated in the third quarter of 2011.
  • 6A new loan agreement allows DEP to borrow up to $200 million from EPO, with interest at LIBOR plus 2.50%, to fund project costs or general purposes.
  • 7The agreements outline a pro rata funding mechanism for both the initial pipeline construction and potential future expansion projects within Acadian Gas.

Frequently Asked Questions

The primary purpose is to formally outline the terms and funding responsibilities for the construction of a new 270-mile pipeline, known as the Haynesville Extension, connecting the Haynesville shale formation to Acadian Gas's existing system. The agreements also establish a framework for future expansion projects and provide a credit facility for DEP.

The project is being financed on a pro rata basis between EPO (a subsidiary of EPD) and DEP. EPO will contribute 34% (approximately $530 million), and DEP will contribute 66% (approximately $1.03 billion) through their respective subsidiaries. This funding is being managed through amendments to the Acadian Gas LLC Agreement.

The $200 million loan agreement allows DEP to borrow funds from EPO. This facility provides DEP with financial flexibility to cover costs associated with the Haynesville Extension or for general partnership purposes. The loan carries an interest rate of LIBOR plus 2.50% and has specific borrowing and repayment terms.

The Haynesville Extension pipeline is expected to be placed into service during the third quarter of 2011. It is designed with an initial capacity of approximately 1.8 billion cubic feet per day (Bcf/day), with the potential for expansion up to 2.1 Bcf/day.