News Release
Sept. 10, 2001


HOUSTON – Earlier today, TEPPCO Partners, L.P. (TEPPCO) (NYSE:TPP) announced the signing of a purchase and sale agreement with two subsidiaries of Alberta Energy Company Ltd. (AEC) by which TEPPCO will acquire the Jonah Gas Gathering Company (Jonah System) for approximately US$360 million. This is a fee-based business with established reserves and dedicated volumes. The transaction is expected to close by Sept. 28, 2001, subject to regulatory approval and completion of customary closing conditions.

The Jonah System is comprised of approximately 300 miles of pipelines ranging in size from four to 20 inches in diameter, five compressor stations totaling 33,000 horsepower and related metering facilities. The system, located in the Green River Basin in southwestern Wyoming, gathers and transports natural gas from one of the most prolific and active basins in the United States. Gas transported on the Jonah System is processed by others and delivered to several interstate pipeline systems located in the area that provide access to a number of West Coast, Rocky Mountain and Midwest markets.

The original system was constructed in 1992, and was significantly expanded in 1997. An additional expansion, consisting of 50 miles of new 20-inch diameter pipeline and compression facilities, is presently under construction with completion scheduled for early 2002. The system’s capacity is 450 MMcf/day and will increase to 730 MMcf/day when the current expansion is  placed in service. Upon closing of the transaction, TEPPCO will assume responsibility for completion of the expansion and the remaining costs of approximately US$25 million.

The Jonah System will be commercially managed and operated by Duke Energy Field Services, LP (DEFS), one of the nation’s leading natural gas gathering and processing companies. DEFS has existing operations in close proximity to the Jonah System and is well positioned to provide efficient and reliable service to both TEPPCO and the producers connected to the Jonah System.

TEPPCO projects first full-year revenue from the Jonah System at approximately US$53 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately US$45 million. EBITDA is expected to grow to approximately US$60 million within five years. Annual capital expenditures during the first five years are estimated to average US$5 million. The acquisition will be immediately accretive to income and cash flow.

A bridge loan will be utilized to fund the acquisition. TEPPCO is evaluating permanent financing alternatives.

As a result of the positive impact of the Jonah System acquisition and continued growth from TEPPCO’s existing businesses, TEPPCO plans to increase its distribution by at least US$0.15 per unit on an annual basis, effective with the distribution to be declared in mid-October 2001, subject to approval by the general partner’s board of directors.

TEPPCO will host a conference call related to the acquisition at 8:05 a.m. CDT on Tuesday, Sept. 11. Interested parties may listen via the Internet, live or on a replay basis at

TEPPCO Partners, L.P. is a publicly traded master limited partnership, which conducts business through various subsidiary operating companies. TEPPCO owns and operates one of the largest common carrier pipelines of refined petroleum products and liquefied petroleum gases in the United States; owns and operates natural gas liquid pipelines; is engaged in crude oil transportation, storage, gathering and marketing; and owns a 50-percent interest in Seaway Crude Pipeline Company and an undivided ownership interest in the Rancho and Basin Pipelines. Texas Eastern Products Pipeline Company, LLC, an indirect wholly owned subsidiary of Duke Energy Field Services, LLC, is the general partner of TEPPCO Partners, L.P. For more information, visit TEPPCO’s website at

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties. These risks and uncertainties include, among other things, market conditions, governmental regulations and factors discussed in TEPPCO Partners, L.P. filings with the Securities and Exchange Commission.

Contact: Kathleen A. Sauve -- Media Relations
Phone: 713/759-3635
24 Hour Phone: 704/382-8333
Contact: Brenda J. Peters -- Investor Relations
Phone: 713/759-3954
24 Hour Phone: 704/382-8333