Energy Transfer Partners to acquire Transwestern Pipeline
  by: OilOnline
  Friday, September 15, 2006

Energy Transfer Partners, L.P. has entered into agreements with GE Energy Financial Services and Southern Union Company to acquire the Transwestern Pipeline. The agreements provide for a series of transactions in which Energy Transfer Partners will acquire all of the member interests in CCE Holdings, LLC ("CCEH") owned by GE Energy Financial Services and certain other investors. The member interests acquired will represent a 50% ownership in CCEH, which was formed in 2004 to purchase CrossCountry Energy. In the second transaction, CCEH will redeem the 50% ownership in CCEH of Energy Transfer Partners in exchange for 100% ownership of Transwestern Pipeline Company, LLC ("Transwestern"), following which Southern Union will own all of the member interests of CCEH.

The Transwestern assets primarily consist of the Transwestern Pipeline, a 2,500 mile interstate natural gas pipeline system. The Transwestern Pipeline connects supply areas in the San Juan Basin in southern Colorado and northern New Mexico, the Anadarko Basin in the Mid-continent and the Permian Basin in west Texas to markets in the Midwest, Texas, Arizona, New Mexico and California. The Transwestern Pipeline interconnects with Energy Transfer Partners' existing intrastate pipelines in west Texas. The combination of pipeline systems will result in new market opportunities for existing natural gas supply sources on both systems and increases supply availability and flexibility to existing markets served by both systems.

The series of transactions, valued at $1.465 billion, is subject to various regulatory approvals prior to closing. Energy Transfer Partners intends to finance more than 50% of the purchase price with equity, to be issued prior to or simultaneous with closing. Upon closing, Energy Transfer Partners expects the transaction to be immediately accretive to its common unitholders.

"This is the Partnership's first acquisition in the interstate pipeline arena, and one which provides an additional platform for growth", said Mike Smith, Vice President-Mergers and Acquisitions. "Transwestern provides Energy Transfer Partners with access to reserves in the San Juan, Piceance and Rockies' basins, and allows us to participate in markets to the west. The acquisition of Transwestern also provides producers on our Texas system with access to these western markets. Our proven track record of investing additional capital to expand our pipeline systems and increase interconnect access has provided natural gas producers with multiple markets and has benefited natural gas consumers by moving gas out of the rapidly expanding production areas to those systems supplying customer needs."