News Release
July 18, 2002

TEPPCO PARTNERS, L.P. REPORTS SECOND QUARTER AND FIRST HALF 2002 RESULTS

HOUSTON - TEPPCO Partners, L.P. (NYSE:TPP) today reported net income for second quarter 2002 of $24.4 million, or $0.39 per unit, compared with second quarter 2001 net income of $43 million, or $0.89 per unit on a diluted basis. Net income for six months ended June 30, 2002, was $51.2 million, or $0.84 per unit, compared with $68.8 million, or $1.45 per unit for six months ended June 30, 2001.

Second quarter and six months ended June 30, 2001, results included net income of $18.9 million, or $0.39 per unit, from the settlement of a canceled transportation agreement with Pennzoil-Quaker State Company related to the sale of their refinery in Shreveport, La. Excluding the settlement, net income for second quarter 2001 was $24.1 million, or $0.50 per unit, and net income for six months ended June 30, 2001, was $49.9 million, or $1.06 per unit.

Net income per unit for the 2002 periods reflects 7.5 million units issued subsequent to second quarter 2001. The weighted-average number of units outstanding for second quarter and six months ended June 30, 2002, was 46.3 million and 45.5 million, respectively, compared with 38.9 million and 38.4 million, respectively, for the corresponding 2001 periods.

"Second quarter and year-to-date 2002 results reflect the benefits from our recent Midstream Segment acquisitions, with increased movements on the Jonah Gas Gathering System and Chaparral NGL System making a significant contribution to TEPPCO's earnings," said Barry R. Pearl, president and chief executive officer of the general partner of TEPPCO. "Also, we continued to realize solid operating performance from our Upstream and Downstream Segments, with reduced operating costs offsetting the effect of lower Seaway Crude Pipeline movements and lower propane deliveries to midwest and northeast markets.

"We are increasing our range of projected full-year 2002 earnings before interest, taxes, depreciation and amortization (EBITDA) to $270 million to $290 million, primarily to reflect the recent acquisition of the Val Verde Gathering System," added Pearl.

OPERATING RESULTS BY BUSINESS SEGMENT
Effective Jan. 1, 2002, TEPPCO realigned its three business segments to reflect its entry into the natural gas gathering business and expanded scope of natural gas liquids (NGLs) operations. The fractionation of NGLs (previously reported as part of the Downstream Segment) and transportation of NGLs (previously reported as part of the Upstream Segment) have been shifted to the Midstream Segment. Prior year comparisons have been adjusted to conform with current presentation.

Upstream Segment
The Upstream Segment includes crude oil transportation, storage, gathering and marketing activities; and distribution of lubrication oils and specialty chemicals.

Operating income for the Upstream Segment was $6.7 million for second quarter 2002, compared with $7.1 million for second quarter 2001. The decrease was primarily due to increased labor and outside services expense. For the six months ended June 30, 2002, operating income for the Upstream Segment was $12.7 million, compared with $11 million for the corresponding 2001 period. The increase was primarily due to the full period impact in 2002 of crude oil gathering assets acquired in March 2001, partially offset by increased operating expenses during second quarter 2002.

Equity earnings from the investment in Seaway Crude Pipeline were $4.6 million and EBITDA from Seaway was $6.2 million for second quarter 2002, compared with $4.8 million and $7.2 million, respectively, for second quarter 2001. For the six months ended June 30, 2002, equity earnings from Seaway were $9 million and EBITDA from Seaway was $12.1 million, compared with $10 million and $14.1 million, respectively, for the corresponding 2001 period. The decrease in equity earnings and EBITDA was due to a stipulation in the Seaway partnership agreement whereby TEPPCO's portion of equity earnings decreases from 80 percent to 60 percent on a pro-rated basis in 2002 (averaging 67 percent for 2002), and reduced volumes of foreign crude oil being shipped on Seaway.

Downstream Segment
The Downstream Segment includes the transportation and storage of refined products, liquefied petroleum gases (LPGs) and petrochemicals.

Downstream operating income was $18.6 million for second quarter 2002, compared with $41.3 million for second quarter 2001. The decrease was due to the $18.9 million settlement with Pennzoil in 2001, $2.7 million of lower LPGs transportation revenues and $1.7 million of revenue recognized upon the approval of market-based rates in 2001, offset by lower power costs in 2002. For the six months ended June 30, 2002, operating income was $42.2 million, compared with $69.6 million for the 2001 period. The decrease was due to the factors previously noted and warmer winter weather during first quarter 2002.

The equity loss from the investment in Centennial Pipeline LLC was $2.1 million and $2.9 million, respectively, for second quarter and six months ended June 30, 2002, compared with an equity loss of $0.2 million for the corresponding second quarter and six months ended June 30, 2001. The higher losses in 2002 resulted from operating expenses for the start-up of pipeline transportation activities.

Midstream Segment
The Midstream Segment includes natural gas gathering services, and transportation and fractionation of NGLs. This segment was significantly expanded with the acquisition of the Jonah Gas Gathering Company on Sept. 30, 2001, and the Chaparral NGL System acquired on March 1, 2002.

Operating income for the Midstream Segment was $11.7 million for second quarter 2002, compared with $4.7 million for second quarter 2001. For the six months ended June 30, 2002, operating income was $19.4 million, compared with $8.8 million for the 2001 period. The combined effect of the acquisitions of the Jonah Gas Gathering Company and Chaparral NGL System contributed $8.1 million and $12 million, respectively, to operating income during second quarter and six-month periods in 2002. The favorable impact of the acquisitions was partially offset by reduced transportation revenues on the Dean and Panola pipelines during second quarter and six-month periods in 2002.

FINANCING ACTIVITIES
TEPPCO completed an offering in February 2002 of senior unsecured notes for $500 million, and a follow-on offering in March 2002 of 1.92 million limited partner units for approximately $58 million. The majority of the proceeds from these offerings were used to reduce a portion of borrowings outstanding under TEPPCO's bank credit facilities.

Second quarter 2002 interest expense was $16.8 million, offset by capitalized interest of $1 million and other income - net of $0.8 million. Interest expense was $15.4 million for second quarter 2001, offset by capitalized interest of $0.5 million and $0.4 million of other income - net.

For the six months ended June 30, 2002, interest expense was $33.6 million, offset by capitalized interest of $3.1 million and other income - net of $1.4 million. Interest expense was $31.7 million for the six months ended June 30, 2001, offset by capitalized interest of $0.9 million and $0.6 million of other income - net.

TEPPCO will host a conference call related to earnings performance at 8:05 a.m. CDT on Friday, July 19, 2002. Interested parties may listen via the Internet, live or on a replay basis at www.teppco.com.

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 liquids 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 Web site 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.

CONTACTS:

Investor Relations - Brenda J. Peters Phone: 713/759-3954

Media Relations - Kathleen A. Sauvé
Phone: 713/759-3635
24-Hour: 704/382-8333

###


TEPPCO Partners, L. P.
FINANCIAL HIGHLIGHTS
(Unaudited - In Millions, Except Per Unit Amounts)

Three Months Ended
June 30,

Six Months
Ended
June 30,



2002

2001

2002

2001





Operating Revenues:

Sales of crude oil and petroleum products

$800.1

$978.8

$1,345.3

$1,686.3

Transportation - Refined Products

31.8

51.4

56.9

77.6

Transportation - LPGs

10.8

13.5

34.2

38.5

Transportation - Crude oil and NGLs

17.7

11.4

30.1

22.3

Gathering - Natural Gas

11.4

-

20.9

-

Mont Belvieu operations

2.9

3.0

7.4

5.9

Other

13.6

15.6

24.6

28.3





Total Operating Revenues

888.3

1,073.7

1,519.4

1,858.9





Costs and Expenses:

Purchases of crude oil
and petroleum products

788.0

965.9

1,321.2

1,664.5

Operating expenses - general
and administrative

38.5

33.6

74.5

65.4

Operating fuel and power

7.2

10.2

15.8

18.8

Depreciation and amortization

17.6

10.9

33.6

20.8





Total Costs and Expenses

851.3

1,020.6

1,445.1

1,769.5





Operating Income

37.0

53.1

74.3

89.4





Interest expense - net

(15.8)

(14.9)

(30.5)

(30.8)

Equity earnings (1)

2.4

4.4

6.0

9.6

Other income - net

0.8

0.4

1.4

0.6





Net Income

$24.4

$43.0

$51.2

$68.8





Net Income Allocation:

Limited Partner Unitholders

$16.5

$31.3

$35.1

$49.9

General Partner

6.5

8.2

12.9

13.2

Class B Unitholder

1.4

3.5

3.2

5.7





Total Net Income Allocated

$24.4

$43.0

$51.2

$68.8





Basic Net Income Per Limited Partner
and Class B Unit:

$0.39

$0.90

$0.84

$1.45





Diluted Net Income Per Limited Partner
and Class B Unit:

$0.39

$0.89

$0.84

$1.45





Weighted Average Number of Limited Partner and Class B Units

46.3

38.9

45.5

38.4

(1)

Significant equity method investments:

Seaway Crude Pipeline Company

Equity Earnings

$4.6

$4.8

$9.0

$10.0

EBITDA

6.2

7.2

12.1

14.1

Centennial Pipeline LLC

Equity Earnings (Loss)

$(2.1)

$(0.2)

$(2.9)

$(0.2)

EBITDA

(0.4)

(0.2)

(1.2)

(0.2)


TEPPCO Partners, L.P.
BUSINESS SEGMENT DATA

(Unaudited - In Millions)

Three Months Ended
June 30, 2002

Downstream

Midstream

Upstream

Intersegment
Eliminations

Consolidated


Operating revenues

$54.6

$24.4

$809.8

$(0.5)

$888.3

Operating expenses

28.6

4.5

801.1

(0.5)

833.7

Depreciation and amortization

7.4

8.2

2.0

-

17.6


Operating Income

$18.6

$11.7

$6.7

$-

$37.0


Three Months Ended
June 30, 2001 (1)

Downstream

Midstream

Upstream

Intersegment
Eliminations

Consolidated


Operating revenues

$78.5

$7.4

$987.8

$-

$1,073.7

Operating expenses

30.5

1.3

977.9

-

1,009.7

Depreciation and amortization

6.7

1.4

2.8

-

10.9


Operating Income

$41.3

$4.7

$7.1

$-

$53.1


Six Months Ended
June 30, 2002

Downstream

Midstream

Upstream

Intersegment
Eliminations

Consolidated


Operating revenues

$114.2

$42.7

$1,363.7

$(1.2)

$1,519.4

Operating expenses

57.8

8.0

1,346.9

(1.2)

1,411.5

Depreciation and amortization

14.2

15.3

4.1

-

33.6


Operating Income

$42.2

$19.4

$12.7

$-

$74.3


Six Months Ended June 30, 2001 (1)

Downstream

Midstream

Upstream

Intersegment
Eliminations

Consolidated


Operating revenues

$140.8

$14.0

$1,704.1 

$-

$1,858.9

Operating expenses

57.8

2.4

1,688.5

-

1,748.7

Depreciation and amortization

13.4

2.8

4.6

-

20.8


Operating Income

$69.6

$8.8

$11.0

$-

$89.4


(1) Certain 2001 amounts have been reclassified to conform with current
2002 presentation.


TEPPCO Partners, L. P.
Condensed Statements of Cash Flows (Unaudited) (In Millions)

Six Months Ended
June 30,


2002

2001


Cash Flows from Operating Activities

Net income

$51.2

$68.8

Depreciation, working capital and other

46.3

(7.3)


Net Cash Provided by Operating Activities

97.5

61.5


Cash Flows from Investing Activities:

Proceeds from cash investments

-

3.2

Proceeds from sale of assets

3.4

1.3

Purchase of Jonah Gas Gathering Company

(7.3)

-

Purchase of Chaparral NGL System

(132.1)

-

Purchase of Val Verde Gathering System

(444.2)

-

Purchase of crude oil assets

-

(20.0)

Capital expenditures

(63.6)

(33.4)

Investment in Centennial Pipeline LLC

(7.7)

(25.1)


Net Cash Used in Investing Activities

(651.5)

(74.0)


Cash Flows from Financing Activities:

Issuance of Senior Notes

497.8

-

Proceeds from term loan and revolving credit facilities

642.0

33.0

Debt issuance costs

(7.0)

-

Payments on revolving credit facility

(570.7)

(41.0)

Proceeds from issuance of LP units, net

59.2

54.6

General Partner contributions

1.2

1.1

Distributions paid

(68.6)

(49.5)


Net Cash Provided by (Used in)
Financing Activities

553.9

(1.8)


Net Decrease in Cash and Cash Equivalents

(0.1)

(14.3)

Cash and Cash Equivalents – beginning of period

25.5

27.1


Cash and Cash Equivalents – end of period

$25.4

$12.8


Supplemental Cash Information:

Interest paid during the period
(net of capitalized interest)

$19.5

$32.2


TEPPCO Partners, L. P.
Condensed Balance Sheets (Unaudited)

(In Millions)

June 30,
2002

December 31,
2001


Assets

Current assets

Cash and cash equivalents

$25.4

$25.5

Other

324.5

258.0


Total current assets

349.9

283.5

Property, plant and equipment - net

1,531.3

1,180.5

Intangible assets (1)

502.0

251.5

Equity investments

292.5

292.2

Other assets

62.9

57.6


Total assets

$2,738.6

$2,065.3


Liabilities and Partners' Capital

Current liabilities

Notes payable

$185.4

$360.0

Other

357.4

308.8


Total current liabilities

542.8

668.8

Senior Notes

887.7

389.8

Other long-term debt

586.6

340.7

Other non-current liabilities

29.3

17.2

Class B Units

104.4

105.6

Partners' capital

Accumulated other comprehensive loss

(20.0)

(20.3)

General partner's interest

10.9

13.2

Limited partners' interests

596.9

550.3


Total partners' capital

587.8

543.2


Total liabilities and partners' capital

$2,738.6

$2,065.3


(1) Includes the value of long-term service agreements between
TEPPCO and its customers.


TEPPCO Partners, L. P.
OPERATING DATA

(Unaudited - In Millions, Except as Noted)

Three Months Ended June 30,
Six Months Ended June 30,


2002

2001

2002

2001



Downstream Segment:

Barrels Delivered

Refined Products

35.3

33.4

61.1

60.6

LPGs

7.1

6.9

19.1

18.5

Mont Belvieu Operations

5.6

4.5

15.3

10.8



Total

48.0

44.8

95.5

89.9



Average Tariff Per Barrel

Refined Products

$0.90

$0.97

(1)

$0.93

$0.97

(1)

LPGs

1.53

1.96

1.79

2.07

Mont Belvieu Operations

0.13

0.18

0.14

0.17

Average System Tariff Per Barrel

$0.90

$1.04

$0.98

$1.10

Upstream Segment (2):

Margins:

Crude oil transportation

$9.7

$8.9

$18.9

$17.0

Crude oil marketing

5.3

6.3

10.1

9.9

Crude oil terminaling

2.6

2.5

4.9

4.7

LSI

1.3

1.0

2.4

2.1



Total Margin

$18.9

$18.7

$36.3

$33.7



Total barrels

Crude oil transportation

21.7

21.9

42.8

37.6

Crude oil marketing

42.9

44.0

73.3

72.5

Crude oil terminaling

33.1

32.5

62.3

57.1

Lubrication oil volume
(total gallons):

2.7

2.1

4.9

4.4

Margin per barrel:

Crude oil transportation

$0.449

$0.408

$0.442

$0.453

Crude oil marketing

0.124

0.143

0.137

0.136

Crude oil terminaling

0.077

0.078

0.078

0.082

Lubrication oil margin
(per gallon):

$0.456

$0.461

$0.483

$0.483

Midstream Segment (2):

Gathering - Natural Gas (3)

Bcf

59.8

-

110.0

-

Btu (in trillions)

66.5

-

122.2

-

Average fee per MMBtu

$0.172

-

$0.172

-

Transportation - NGLs

Total barrels

15.6

5.4

23.5

10.2

Margin per barrel

$0.678

$1.024

$0.718

$1.024

Fractionation - NGLs

Total barrels

1.0

1.0

2.0

2.1

Average rate per barrel

$1.840

$1.831

$1.827

$1.805

Sales - Condensate (3)

Total barrels (thousands)

18.3

-

50.6

-

$/barrel

$28.37

-

$23.99

-

(1) Excludes the effect of the Pennzoil-Quaker State Company settlement.

(2) Certain 2001 amounts have been reclassified to conform with current
2002 presentation.

(3) Operating data for Jonah Gas Gathering Company acquired effective Sept. 30, 2001.