Enterprise to Extend Eagle Ford Shale Crude Oil Pipeline System as Part of Long-Term Transportation Agreement with Chesapeake Energy Corporation Affiliate

HOUSTON--(BUSINESS WIRE)--Enterprise Products Partners L.P. (NYSE:EPD) today announced plans to build an 80-mile extension of its 350,000 barrel per day (BPD) Eagle Ford Shale crude oil pipeline, that would allow the partnership to serve growing production areas in the southwestern portion of the play. The Phase II project would originate in Wilson County, Texas at the terminus of the partnership’s previously announced 140-mile Phase I segment, and extend to a site near Gardendale, Texas in La Salle County, where a new central delivery point (CDP) is planned for construction that will feature 500,000 barrels of storage. Phase I is on schedule to begin service by the second quarter of 2012, with Phase II set to commence operations in the first quarter of 2013. When completed, the approximately 220-mile crude oil pipeline system will provide Eagle Ford Shale producers with access to the Texas Gulf Coast refining complex through Enterprise’s integrated midstream network.

“We are very pleased to expand our relationship with Chesapeake in the Eagle Ford Shale by adding crude oil transportation to the various natural gas services Enterprise is already providing under long-term contracts”

The Phase II extension, which is being designed with a capacity of 200,000 BPD, is anchored by a 10-year agreement with Chesapeake Energy Marketing, Inc. (“Chesapeake”), a subsidiary of Chesapeake Energy Corporation (NYSE:CHK), that Enterprise also announced today. As part of the long-term contract, Chesapeake has committed to 100,000 BPD of firm crude oil transportation capacity.

“We are very pleased to expand our relationship with Chesapeake in the Eagle Ford Shale by adding crude oil transportation to the various natural gas services Enterprise is already providing under long-term contracts,” said A.J. “Jim” Teague, executive vice president and chief operating officer of Enterprise’s general partner. “Including the Chesapeake agreement, we now have producer commitments for nearly all of the available capacity on Enterprise’s Eagle Ford crude oil pipeline, with 320,000 BPD under 10-year contracts.”

With more than 2.5 million acres under lease and potentially 15,000 wells to be drilled over the production life of the Phase II service area—based on the partnership’s own research and information from producers—development activity in this region of the Eagle Ford Shale is expected to remain brisk for the foreseeable future. Estimates provided by producers also suggest that up to 3 billion barrels of crude oil are recoverable in the southwestern region of the play.

The Phase II project would address the lack of pipeline infrastructure in the southwestern crude oil production region of the Eagle Ford Shale and provide shippers with access to Enterprise’s Sealy, Texas delivery point. The Sealy facility interconnects with the partnership’s Rancho Pipeline and feeds into Enterprise’s new ECHO crude oil storage terminal being constructed at a location along the Houston Ship Channel in southeast Harris County, Texas. The pipeline options available to shippers via the terminal would provide access to more than two million BPD of refining capacity in the Houston area.

Teague further stated, “Typical of the strategy that has positioned Enterprise as a key provider of midstream services in the Eagle Ford Shale, this latest agreement leverages our existing integrated network of assets to create a cost-effective and timely solution that will allow Chesapeake to maximize the value of their production by providing access to the largest refining market in the world.”

Approximately 165 rigs are presently working in the Eagle Ford Shale, which have drilled more than 1,200 wells. Current production from the play is approximately 100,000 BPD of crude oil and condensate.

Enterprise Products Partners L.P. is the largest publicly traded partnership and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. EPD’s assets include approximately: 50,200 miles of onshore and offshore pipelines; 192 million barrels of storage capacity for NGLs, refined products and crude oil; and 27 billion cubic feet of natural gas storage capacity. Services include: natural gas transportation, gathering, processing and storage; NGL fractionation, transportation, storage, and import and export terminaling; crude oil and refined products storage, transportation and terminaling; offshore production platform; petrochemical transportation and storage; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems and in the Gulf of Mexico.

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that EPD expects, believes or anticipates will or may occur in the future, including anticipated benefits and other aspects of such activities, events, developments or transactions, are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition and other risk factors included in the reports filed with the Securities and Exchange Commission by EPD. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, EPD does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.