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Energy Transfer Partners, L.P. Announces Long-Term Transportation Agreement With XTO Energy Inc.

Posted on: Wednesday, 6 July 2005, 06:00 CDT

Agreement in conjunction with a 264-mile intrastate pipeline construction project

Energy Transfer Partners, L.P. (NYSE:ETP) today announced the signing of a ten-year agreement with XTO Energy Inc. (NYSE:XTO) as part of its new pipeline construction project. Under the terms of the agreement, XTO Energy has agreed to transport minimum annual volumes over the ten-year term, and is entitled to ship additional volumes under similar terms. This project includes the previously announced Texas pipeline from Bethel to Texoma as well as the construction of additional pipelines. In all, the Partnership (ETP) has now approved capital expenditures totaling $454 million to construct approximately 264 miles of 30 inch, 36 inch and 42 inch pipelines while adding approximately 40,000 horsepower of compression.

"We are excited about the significant firm take-away capacity this project provides for XTO and other committed producers," said Brian Beebe, vice president of Energy Transfer Fuel (an ETP subsidiary). "The remaining available capacity will be offered to shippers on a first-come-first-serve basis."

The Partnership will construct a 36 inch pipeline from the intersection of its Fort Worth Basin and NTP Pipelines near Cleburne, Texas in Johnson County to a point near Reed, Texas in central Freestone County. From that point, a 42 inch pipeline will extend easterly to the Partnership's Texoma Pipeline where a 36 inch pipeline will continue from the Texoma Pipeline to the Carthage, Texas hub. In addition, a 30 inch pipeline will be constructed to connect the Partnership's Katy-Bossier system to the intersection of the 36 inch and 42 inch pipelines near Reed, Texas. The new pipelines will provide throughput capacity of approximately 1.6 billion cubic feet per day and will also interconnect to the Partnership's Bethel salt dome storage facility.

The construction of these new pipelines will benefit the Partnership and its customers in several ways, including (but not limited to) providing producers with firm capacity out of the rapidly expanding Barnett Shale, Freestone Trend and Bossier Sand producing areas to all market hubs in Texas and numerous interstate pipelines; providing the Partnership with the ability to fully integrate its Houston Pipe Line, Oasis, Katy-Bossier and Energy Transfer Fuel pipeline systems into one contiguous pipeline network with the ability to offer seamless transportation across its systems in Texas; and, with the expanding LNG facilities along the Gulf Coast, this project will provide LNG customers alternative outlets across Texas and to other connection points.

The Partnership's ability to construct these additional pipelines is a result of the acquisitions the Partnership was successful in completing during the past year and a half. Although the Partnership will continue to participate in attractive acquisition opportunities, these types of pipeline construction projects will provide it with opportunities to raise quarterly distributions to its unitholders in future quarters without the necessity of acquiring additional assets.

Energy Transfer Partners, L.P. is a publicly traded partnership owning and operating a diversified portfolio of energy assets. The Partnership's natural gas transportation and storage operations include approximately 11,700 miles of natural gas gathering and transportation pipelines, natural gas treating and processing assets located in Texas and Louisiana, and three natural gas storage facilities located in Texas. The Partnership is the fourth largest retail marketer of propane in the United States, serving more that 700,000 customers from 315 customer service locations in 34 states, extending from coast to coast, with concentration in the western, upper midwestern, northeastern, and southeastern regions of the United States.

The Partnership has scheduled a conference call for 10:00 a.m. Central Daylight Time, Friday, July 8, 2005, to discuss this project. The dial-in number is 800-762-7308; participant code: Energy Transfer Partners.

This press release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management's control. An extensive list of factors that can affect future results are discussed in the Partnership's Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events. The information contained in this press release is available on the Partnership's website at www.energytransfer.com.

Source: Business Wire

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