News Release
July 01, 2002

TEPPCO PARTNERS, L.P. CLOSES $444 MILLION ACQUISITION OF VAL VERDE GATHERING SYSTEM

HOUSTON – Texas Eastern Products Pipeline Company, LLC, the general partner of TEPPCO Partners, L.P. (TEPPCO) (NYSE:TPP) today announced the closing of its acquisition of the Val Verde Gathering System from Burlington Resources Gathering Inc., a subsidiary of Burlington Resources Inc. (NYSE:BR), for $444 million.

 

The acquisition was announced in May. TEPPCO projects first full-year earnings before interest, taxes, depreciation and amortization (EBITDA) from the system of approximately $55 million to $60 million.

 

Located in San Juan and Rio Arriba counties, N.M., the Val Verde Gathering System gathers coal seam gas from the Fruitland Coal Formation of the San Juan Basin, a premier long-term source of natural gas supply in North America. The basin is one of the most prolific sources of coalbed methane gas and also contains significant conventional gas reserves.

 

The system is one of the largest coal seam gas gathering and treating facilities in the United States. It is comprised of over 360 miles of pipeline ranging in size from 4 inches to 36 inches in diameter, 14 compressor stations operating over 93,000 horsepower of compression and a large amine treating facility for the removal of carbon dioxide. The system’s capacity is approximately one billion cubic feet per day.

 

The system gathers natural gas from more than 544 separate wells throughout New Mexico and southern Colorado and provides gathering and treating services pursuant to 60 long-term contracts with approximately 40 different natural gas producers in the San Juan Basin. Gas transported on the Val Verde system is delivered to several interstate pipeline systems serving the western United States, as well as local New Mexico markets.

 

The assets will be operated and commercially managed by Duke Energy Field Services, LLC (DEFS) under agreements with TEPPCO.

 

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 petrochemical and natural gas liquid pipelines; is engaged in crude oil transportation, storage, gathering and marketing; owns and operates natural gas gathering systems; and owns a 50-percent interest in Seaway Crude Pipeline Company, an interest in Centennial Pipeline LLC, 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 www.teppco.com.

 

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
Email: ksauve@TEPPCO.com
Contact: Brenda J. Peters -- Investor Relations
Phone: 713/759-3954, Toll Free: 800/659-0059
24 Hour Phone: n/a
Email: bpeters@TEPPCO.com