TEPPCO PARTNERS, L.P. ANNOUNCES $65 MILLION PHASE III EXPANSION OF JONAH GAS GATHERING SYSTEM
HOUSTON – TEPPCO Partners, L.P. (NYSE:TPP) today announced two projects totaling $65 million that will expand both pipeline and processing capacity on the Jonah Gas Gathering System in southwestern Wyoming.
“These projects demonstrate the organic growth opportunities resulting from TEPPCO’s investment in the Jonah Gas Gathering System,” said Barry R. Pearl, president and chief executive officer of the general partner of TEPPCO. “The positive impact to Jonah from the Pinedale Anticline has far exceeded our original expectations. We believe that the Phase III Expansion will provide substantial distributable cash flow and positions the Partnership for additional attractive investment opportunities from the ongoing development of the Jonah and Pinedale reserves.”
TEPPCO expects the Phase III expansion to contribute operating income exceeding $12 million during the first full year of operation.
The expansion will include construction of approximately 80 miles of pipeline that will loop Jonah’s gathering system in both the Pinedale and Jonah Fields, as well as the mainline system to Opal, Wyo., and installation of 3,200 horsepower of compression to the system.
TEPPCO will also construct a new 250 million cubic feet per day (MMcf/day) gas plant near Opal. The plant, named Pioneer, will provide processing capacity to accommodate the substantial increase in gas production from the Jonah and Pinedale Fields. Residue gas from the Pioneer Plant can be delivered to
In 2002, TEPPCO completed the Phase I and II expansions of Jonah, which nearly doubled the capacity of the system. The first expansion was completed in May 2002 and increased system capacity from 450 MMcf/day to 730 MMcf/day. As a result of increased volumes from the rapidly developing Pinedale Field, TEPPCO also increased the gathering capacity of the Pinedale Field lateral and the mainline capacity of the Jonah System in fourth-quarter 2002 by an additional 150 MMcf/day. Phase I and Phase II expansions added 85 miles of 20-inch diameter and 24-inch diameter pipe and 19,200 horsepower of compression. Jonah System volumes averaged 450 MMcf/day and 670 MMcf/d in 2001 and 2002, respectively, and are expected to average 820 MMcf/day in 2003. Upon completion of the Phase III expansion in fourth quarter 2003, total system capacity will be 1,180 MMcf/day with volumes in 2004 expected to exceed 1,000 MMcf/day.
BP America Production Company, EnCana Oil & Gas (USA) Inc. and Shell Exploration & Production Company affiliates, all established producers in the Jonah and Pinedale areas are supporting the expansion with increased dedications through 2013.
The Jonah System gathers natural gas from the Green River Basin in southwestern Wyoming, one of the most prolific and active basins in the United States. Gas gathered on the system is primarily processed by others and delivered to several interstate pipeline systems that provide access to a number of West Coast,
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, a 50-percent interest in Centennial Pipeline LLC, and an undivided ownership interest in the Basin Pipeline. 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.