Cleaning & Restoration Breaking News

Enterprise to acquire Diamond-Koch's propylene fractionation business

Houston-based Enterprise Products Partners L.P. wants to acquire a propylene fractionation business, and so has offered cash to D-K Diamond Koch, L.L.C., Diamond-Koch, L.P. and Diamond-Koch III, L.P., for theirs.

HOUSTON -- Houston-based Enterprise Products Partners L.P. (NYSE:EPD) wants to acquire a propylene fractionation business, and so has offered cash to D-K Diamond Koch, L.L.C., Diamond-Koch, L.P. and Diamond-Koch III, L.P., for theirs. As an industry, polymer grade propylene production is used to produce fibers for carpet and upholstery.

"We are very pleased to execute this agreement with Diamond-Koch to acquire their propylene fractionation business," said Enterprise president and CEO O.S. "Dub" Andras. "These are high-quality facilities that will complement our existing service businesses. Upon closing, this acquisition will be immediately accretive to our limited partner units in terms of cash flow."

This propylene fractionation business includes a 66.66 percent equity interest in a polymer grade propylene fractionation facility in Mont Belvieu, Texas, a 50 percent equity interest in a polymer grade propylene export terminal located on the Houston Ship Channel and equity interests in four pipelines which distribute product to customers and to the export terminal. The fractionation plant has the capacity to produce approximately 3 billion pounds per year, or 45,000 barrels per day, of polymer grade propylene.

D-K Diamond Koch, L.L.C., Diamond-Koch, L.P. and Diamond-Koch III, L.P are jointly owned by affiliates of Ultramar Diamond Shamrock Corporation (NYSE:UDS) and Koch Industries, Inc.

According to Andras, demand for chemical grade and polymer grade propylene has grown by approximately 7 percent per year since 1993. "Because it is a basic component of our daily lives, consumption of polymer grade propylene and demand for fractionation services has remained strong during 2001 despite a slower economy," he said. "Growth in polymer grade propylene demand is expected to average 4 percent per year from 2001 through 2005."

The transaction needs a final approval by the board of directors of the respective companies, and the receipt of regulatory approvals. However, the transaction is expected to be completed in about 90 days.

Enterprise Products Partners L.P. (www.epplp.com) is the second largest publicly traded energy partnership with an enterprise value of over $5 billion. It is a leading provider of midstream energy services to producers and consumers of natural gas and natural gas liquids ("NGLs").

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