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• NGL Pipeline Services

NGL Pipeline Services

Our NGL Pipeline Services segment consists of a 286-mile pipeline system (the DEP South Texas NGL Pipeline System) used to transport NGLs from two Enterprise Products Partners' facilities located in south Texas to Mont Belvieu, Texas and related interconnections. The DEP South Texas NGL Pipeline System became operational and began transporting NGLs in January 2007 after undergoing modifications, extensions and interconnections, which we refer to as Phase I. Enterprise Products Partners purchased a 220-mile segment of pipeline, ranging from 12 inches to 16 inches in diameter, from a third party in August 2006 that was the initial component of this system. This s egment of the DEP South Texas NGL Pipeline System originates in Corpus Christi, Texas and extends to Pasadena, Texas and has a current capacity of approximately 100,000 Bbls/d, which is expandable to 175,000 Bbls/d.
During Phase I:

• we constructed approximately 13 miles of pipeline and integrated an existing 32-mile pipeline to complete the connection of the two fractionation facilities to the initial 220-mile segment of our DEP South Texas NGL Pipeline System; and

• we entered into a lease with TEPPCO for an 11-mile, 10-inch interconnecting pipeline extending from Pasadena, Texas to Baytown, Texas. The primary term of the pipeline lease will expire on September 15, 2007, and will continue on a month-to-month basis subject to termination by either party upon 60 days' notice.

During January 2007, an affiliate of Enterprise Products Partners acquired an additional 10-mile, 18-inch segment of pipeline from an affiliate of TEPPCO, which connects the leased TEPPCO pipeline to Mont Belvieu, Texas. This 10-mile pipeline segment was purchased from TEPPCO for an aggregate purchase price of $8.0 million. This pipeline segment was included with the operations and assets contributed to us by Enterprise Products Partners at the closing of our initial public offering.

During Phase II, we will construct 22 miles of 18-inch pipeline to replace the leased 11-mile, 10-inch pipeline and the segments of 12-inch pipeline acquired from a third party. The Phase II upgrade will provide a significant increase in pipeline capacity and is expected to be operational during the third quarter of 2007.