TEPPCO Exits Texas Offshore Oil Port and Pipeline Project
April 21 2009 - 5:00PM
Business Wire
TEPPCO Partners, L.P. (NYSE:TPP) announced today that, effective
April 16, 2009, its affiliate, TEPPCO O/S Port System, LLC, has
elected to dissociate, or exit from, the Texas Offshore Port System
partnership (�TOPS�) and forfeit its investment and its one-third
ownership interest in the partnership. As a result, TEPPCO expects
to record a non-cash charge of approximately $34 million against
its earnings for the second quarter of 2009. The decision to
dissociate from TOPS was in connection with a disagreement with one
of its partners, an affiliate of Oiltanking Holdings America,
Inc.
Enterprise Offshore Port System, LLC, an affiliate of Enterprise
Products Partners L.P. (NYSE:EPD), has also elected to dissociate
from TOPS effective April 16, 2009.
In August 2008, affiliates of TEPPCO, Enterprise and Oiltanking
Holding Americas, Inc. formed a joint venture to design, construct,
own and operate a new Texas offshore crude oil port and pipeline
system to facilitate delivery of waterborne crude oil to refining
centers along the upper Texas Gulf Coast. The TOPS project includes
an offshore port, two onshore storage facilities with approximately
5.1 million barrels of total crude oil storage capacity, and an
associated 160-mile pipeline system with the capacity to deliver up
to 1.8 million barrels per day of crude oil. The total cost of the
project had been estimated at $1.8 billion.
Oiltanking has alleged in a response to the notices of
dissociation that the dissociation of affiliates of TEPPCO and
Enterprise was wrongful and in breach of the TOPS partnership
agreement. TEPPCO believes that its actions in dissociating from
the partnership are permitted by, and in accordance with, the terms
of the TOPS partnership agreement and, should the need arise,
intends to vigorously defend such actions.
TEPPCO Partners, L.P., is a publicly traded energy logistics
partnership with operations that span much of the continental
United States. TEPPCO owns and operates an extensive network of
assets that facilitate the movement, marketing, gathering and
storage of various commodities and energy-related products. The
partnership�s midstream network is comprised of approximately
12,500 miles of pipelines that gather and transport refined
petroleum products, crude oil, natural gas, liquefied petroleum
gases (LPGs) and natural gas liquids, including one of the largest
common carrier pipelines for refined petroleum products and LPGs in
the United States. TEPPCO�s storage assets include approximately 27
million barrels of capacity for refined petroleum products and LPGs
and about 14 million barrels of capacity for crude oil. TEPPCO also
owns a marine business that operates primarily on the United States
inland and Intracoastal Waterway systems, and in the Gulf of
Mexico. For more information, visit TEPPCO�s website
(www.teppco.com). Texas Eastern Products Pipeline Company, LLC, the
general partner of TEPPCO Partners, L.P., is owned by Enterprise GP
Holdings (NYSE:EPE).
This news release includes forward-looking statements. 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, insufficient cash from
operations, market conditions, governmental regulations and factors
discussed in TEPPCO Partners, L.P.'s filings with the Securities
and Exchange Commission. If any of these risks or uncertainties
materializes, or should underlying assumptions prove incorrect,
actual results or outcomes may vary materially from those expected.
The partnership disclaims any intention or obligation to update
publicly or reverse such statements, whether as a result of new
information, future events or otherwise.
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