Enterprise to acquire Diamond-Koch's propylene fractionation unit

By the OGJ Online Staff

HOUSTON, Nov. 26 -- Enterprise Products Partners LP said Monday it plans to acquire, for cash, a propylene fractionation business from units of Ultramar Diamond Shamrock Corp. and Koch Industries Inc.

D-K Diamond Koch LLC, Diamond-Koch LP, and Diamond-Koch III LP own the properties.

The sale includes a 66.66% interest in a polymer grade propylene fractionation facility in Mont Belvieu, Tex., a 50% interest in a polymer-grade propylene export terminal on the Houston Ship Channel, and equity interests in four pipelines that distribute product to customers and to the export terminal. The fractionation plant is rated at 3 billion lb/year, or 45,000 b/d, of polymer-grade propylene.

O.S. "Dub" Andras, Enterprise president and CEO, said, "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."

As an industry, about half of polymer-grade propylene production is used to manufacture polypropylene, which is used to make molded plastics for housewares, appliances, automobiles, and medical products. It is also used to produce packaging materials and fibers for carpet and upholstery.

Andras said, "We believe this business has excellent growth prospects. Demand for chemical grade and polymer-grade propylene has grown by approximately 7%/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. Growth in polymer grade propylene demand is expected to average 4%/year from 2001 through 2005."

The parties expect the transaction to be completed in 90 days.

Enterprise Products Partners LP is the second largest publicly traded midstream energy partnership with an enterprise value of $5 billion. It provides gas transportation, processing, and storage and gas liquids fractionation, transportation, storage, and import/export terminalling.

Related Articles

AFPM: Petrochemical industry needs skilled workers

04/02/2014 The current boom in shale resource development has sparked an urgent need in the petrochemical industry for technically skilled workers to build, o...

ORPIC lets contract for ethylene plant

03/31/2014 Oman Oil Refineries & Petroleum Industries Co. (ORPIC) has let a contract to CB&I to provide ethylene technology and front-end engineering ...

Ethane supply secured for proposed W.Va. ethylene cracker

03/28/2014 Brazil-based Odebrecht SA subsidiary Odebrecht Oil & Gas SA has let a contract to Antero Resources Inc. to become the anchor ethane supplier fo...

Ineos lets contract for Grangemouth ethane terminal

03/28/2014 Ineos Europe AG, Switzerland, said it has reached the latest milestones in its $500 million survival plan to import US shale gas to its 210,000-b/d...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected