All rights reserved. Enterprise Products Partners L.P.1 Why Natural Gas Liquids are Important to the Wyoming Natural Gas Industry or Support Your Local

All rights reserved. Enterprise Products Partners L.P. 1

Why Natural Gas Liquids are Important to the

Wyoming Natural Gas Industryor

Support Your Local Cryogenic Processing Plant

Presented to

Wyoming Pipeline Authority

August 24, 2004


Why Natural Gas Liquids are Important to the Wyoming Natural Gas Industry

• Presentation OverviewPresentation Overview

• Brief introduction to Enterprise and Mid-America Pipeline (MAPL)Brief introduction to Enterprise and Mid-America Pipeline (MAPL)

• MAPL’s relationship to Wyoming and the natural gas pipeline industryMAPL’s relationship to Wyoming and the natural gas pipeline industry

• Comparison of MAPL to natural gas pipelinesComparison of MAPL to natural gas pipelines

• What MAPL gives WyomingWhat MAPL gives Wyoming

• What Wyoming gives MAPLWhat Wyoming gives MAPL

• System operation and expansion opportunitiesSystem operation and expansion opportunities

• Future of natural gas liquids in the Rockies (Wyoming)Future of natural gas liquids in the Rockies (Wyoming)


Overview of Enterprise (EPD)

2nd largest publicly traded energy partnership serving producers and consumers of natural gas and natural gas liquids (NGLs) IPO in July 1998 Currently ranked 336th on Fortune 500 and 7th on Forbes list of

America’s 25 Fastest-Growing Big Companies

Large platform of assets across the midstream energy value chain Only integrated natural gas and NGL transportation, fractionation,

processing, storage and import/export network in North America Pending merger with GulfTerra Energy Partners (GTM) adds

complementary scale, scope and diversity to existing operations


SYSTEM MAP OF COMBINEDSYSTEM MAP OF COMBINED ENTERPRISE (“EPD”) AND GULFTERRA (“GTM”)ENTERPRISE (“EPD”) AND GULFTERRA (“GTM”)

Combined System Map

ROCK SPRINGS

ST. PAUL

AUXSABLE

HOBBS

CONWAY

MT. BELVIEU

HOUSTON

SYSTEM MAP OFSYSTEM MAP OFENTERPRISE (“EPD”)ENTERPRISE (“EPD”)w/ South Texas Midstream Assetsw/ South Texas Midstream Assets


Relative Position Across the Value Chain (By Capacity)Relative Position Across the Value Chain (By Capacity)

Leading Business Positions Across Value Chain

Gas Gas GatheringGathering

Gas Gas ProcessingProcessing

Raw Mix Raw Mix PipelinePipeline

FractionationFractionationSalt Dome Salt Dome

StorageStorageImport Import

TerminalTerminalExport Export

TerminalTerminalDistributionDistribution

Duke FS Duke FS Enterprise Enterprise Enterprise Dow Enterprise Enterprise

Enterprise BP TEPPCO Koch TEPPCO Enterprise Dynegy Dow

Williams Enterprise Koch ConocoPhillips Dow Dynegy ChevronTexaco ConocoPhillips

BP Williams ChevronTexaco Dynegy Dynegy Trammo TEPPCO

Oneok ExxonMobil Dynegy El Paso Williams Koch

ConocoPhillips ONEOK BP ExxonMobil ConocoPhillips KinderMorgan

Devon ConocoPhillips El Paso BP BP ChevronTexaco

Dynegy Devon ExxonMobil ONEOK ExxonMobil Dynegy

Dynegy ConocoPhillips Duke El Paso El Paso

Williams ONEOK ExxonMobil


Introduction to Mid-America Pipeline (MAPL)

• Approximately 7,500 Approximately 7,500 miles of pipelinemiles of pipeline

• Transports Transports approximately approximately 700,000 barrels per 700,000 barrels per dayday

• Operates in 14 statesOperates in 14 states• FERC regulatedFERC regulated


Mid-America Pipeline CompanyWyoming History and Relationship


• Pipeline constructed in 1982 Pipeline constructed in 1982 • Expanded in 1999Expanded in 1999• Expanded in 2006?Expanded in 2006?

• Largest of two natural gas liquids Largest of two natural gas liquids pipelines leaving Wyomingpipelines leaving Wyoming

• Transported average 106,000 bpd Transported average 106,000 bpd in 2002 in 2002

• (4.4 million gallons per day)(4.4 million gallons per day)

• Connected to 15 gas processing Connected to 15 gas processing plantsplants

• Served 2.2 BCFD of gas Served 2.2 BCFD of gas processing in 2003 (46% of total)processing in 2003 (46% of total)

• Transports liquids 1,500 miles to Transports liquids 1,500 miles to market (Gulf Coast)market (Gulf Coast)

• 1,250 miles as the crow flies1,250 miles as the crow flies

Mid-America Pipeline CompanyWyoming History and Relationship


Mid-America Pipeline CompanyWhere Does 1,250 Miles Get You?

1250

Mile

s


Comparison of MAPL to Natural Gas Pipelines



• Who are the largest natural gas transporters out of Wyoming?Who are the largest natural gas transporters out of Wyoming?

2002 Volumes2002 Volumes

MMBTU / DayMMBTU / Day

774,489774,489

1,166,0001,166,000

755,477755,477

509,180509,180

408,298408,298

311,520311,520

194,226194,226

164,357164,357

119,946119,946

Kern RiverKern River

Wyoming Interstate Wyoming Interstate

TrailblazerTrailblazer

NorthwestNorthwest

CIGCIG

Kinder MorganKinder Morgan

QuestarQuestar

Southern Star CentralSouthern Star Central

Williston BasinWilliston Basin




774,489774,489

1,166,0001,166,000

755,477755,477

509,180509,180

408,298408,298

353,290353,290

311,520311,520

194,226194,226

164,357164,357

119,946119,946




NorthwestNorthwest

CIGCIG

Mid-America PipelineMid-America Pipeline


QuestarQuestar








774,489774,489

1,166,0001,166,000

755,477755,477

509,180509,180

353,290353,290

408,298408,298

311,520311,520

194,226194,226

164,357164,357

119,946119,946




NorthwestNorthwest

Mid-America PipelineMid-America Pipeline

CIGCIG


QuestarQuestar




Sales Value / DaySales Value / Day

$ 4.9 MM$ 4.9 MM

$ 7.3 MM$ 7.3 MM

$ 4.8 MM$ 4.8 MM

$ 3.2 MM$ 3.2 MM

$ 2.8 MM$ 2.8 MM

$ 2.6 MM$ 2.6 MM

$ 2.0 MM$ 2.0 MM

$ 1.2 MM$ 1.2 MM

$ 1.0 MM$ 1.0 MM

$ 0.8 MM$ 0.8 MM




What MAPL gives WyomingProcessing Economics (Ethane Recovery)

EthaneEthane57%57%

$ 0.569 $ 0.569

$ 0.024$ 0.024

$ 0.072$ 0.072

$ 0.473$ 0.473

66,36966,369

$ 7.13$ 7.13

$ 5.02$ 5.02

PropanePropane25%25%

$ 0.885$ 0.885

$ 0.024$ 0.024

$ 0.072$ 0.072

$ 0.789$ 0.789

91,59991,599

$ 8.61$ 8.61

$ 5.02$ 5.02

IsobutaneIsobutane5%5%

$ 0.950$ 0.950

$ 0.024$ 0.024

$ 0.072$ 0.072

$ 0.854$ 0.854

99,65299,652

$ 8.57$ 8.57

$ 5.02$ 5.02

Normal ButaneNormal Butane7%7%

$ 0.968$ 0.968

$ 0.024$ 0.024

$ 0.072$ 0.072

$ 0.872$ 0.872

103,724103,724

$ 8.40$ 8.40

$ 5.02$ 5.02

GasolineGasoline6%6%

$ 1.081$ 1.081

$ 0.024$ 0.024

$ 0.072$ 0.072

$ 0.985$ 0.985

110,000110,000

$ 8.96$ 8.96

$ 5.02$ 5.02

Weighted AverageWeighted Average

$ 0.726$ 0.726

$ 0.024$ 0.024

$ 0.072$ 0.072

$ 0.63$ 0.63

79,60679,606

$ 7.91$ 7.91

$ 5.02$ 5.02

8/16/048/16/04Mont Belvieu Liquid Price $ / gallonMont Belvieu Liquid Price $ / gallon

Fractionation Cost @ $ 5.94 gasFractionation Cost @ $ 5.94 gas(Houston Ship Channel)(Houston Ship Channel)

Pipeline TransportationPipeline Transportation

Wyoming Liquid ValueWyoming Liquid Value

BTU / gallonBTU / gallon

Liquid Value $ / MMBTULiquid Value $ / MMBTU

Kern River Index (8/16/04)Kern River Index (8/16/04)


What MAPL gives WyomingProcessing Economics (Ethane Recovery)

• By having access to the NGL pipeline (8/16/2004 example):By having access to the NGL pipeline (8/16/2004 example):

• 353,290 MMBTU is “sold” at $ 7.91 / MMBTU353,290 MMBTU is “sold” at $ 7.91 / MMBTU

• 2,310,000 MMBTU is “sold” at $ 5.02 / MMBTU2,310,000 MMBTU is “sold” at $ 5.02 / MMBTU


• The NGL outlet provided a $ 0.38 / MMBTU upgrade to the gas priceThe NGL outlet provided a $ 0.38 / MMBTU upgrade to the gas price

• The NGL outlet provides over $ 1 Million / day upgrade to gas ownersThe NGL outlet provides over $ 1 Million / day upgrade to gas owners• Approximately $ 370 Million annualizedApproximately $ 370 Million annualized

• The NGL outlet proves approximately 20% of the value to gas ownersThe NGL outlet proves approximately 20% of the value to gas owners

• Approximately 70% of this value comes from ethane and propaneApproximately 70% of this value comes from ethane and propane


What MAPL gives WyomingProcessing Economics (Ethane Rejection)

EthaneEthane40%40%

$ 0.392$ 0.392

$ 0.021$ 0.021

$ 0.072$ 0.072

$ 0.299$ 0.299

66,36966,369

$ 4.51$ 4.51

$ 5.02$ 5.02

PropanePropane32%32%

$ 0.598$ 0.598

$ 0.021$ 0.021

$ 0.072$ 0.072

$ 0.505$ 0.505

91,59991,599

$ 5.51$ 5.51

$ 5.02$ 5.02

IsobutaneIsobutane9%9%

$ 0.660$ 0.660

$ 0.021$ 0.021

$ 0.072$ 0.072

$ 0.567$ 0.567

99,65299,652

$ 5.69$ 5.69

$ 5.02$ 5.02

Normal ButaneNormal Butane10%10%

$ 0.674$ 0.674

$ 0.021$ 0.021

$ 0.072$ 0.072

$ 0.581$ 0.581

103,724103,724

$ 5.60$ 5.60

$ 5.02$ 5.02

GasolineGasoline9%9%

$ 0.798$ 0.798

$ 0.021$ 0.021

$ 0.072$ 0.072

$ 0.705$ 0.705

110,000110,000

$ 6.41$ 6.41

$ 5.02$ 5.02

Weighted AverageWeighted Average

$ 0.547$ 0.547

$ 0.021$ 0.021

$ 0.072$ 0.072

$ 0.454$ 0.454

85,10085,100

$ 5.33$ 5.33

$ 5.02$ 5.02

2/6/042/6/04Mont Belvieu Liquid Price $ / gallonMont Belvieu Liquid Price $ / gallon

Fractionation Cost @ $ 5.27 gasFractionation Cost @ $ 5.27 gas(Houston Ship Channel)(Houston Ship Channel)

Pipeline TransportationPipeline Transportation

Wyoming Liquid ValueWyoming Liquid Value

BTU / gallonBTU / gallon

Liquid Value $ / MMBTULiquid Value $ / MMBTU

Kern River Index (2/6/04)Kern River Index (2/6/04)


What MAPL gives WyomingProcessing Economics (Ethane Rejection)

• By having access to the NGL pipeline (8/16/2004 example):By having access to the NGL pipeline (8/16/2004 example):

• 214,453 MMBTU is “sold” at $ 5.33 / MMBTU214,453 MMBTU is “sold” at $ 5.33 / MMBTU



• The NGL outlet provided a $ 0.02 / MMBTU upgrade to the gas priceThe NGL outlet provided a $ 0.02 / MMBTU upgrade to the gas price

• The NGL outlet provides over $ 50,000 upgrade to gas ownersThe NGL outlet provides over $ 50,000 upgrade to gas owners• Approximately $ 18.5 Million annualizedApproximately $ 18.5 Million annualized

• The NGL outlet proves approximately 9 % of the value to gas ownersThe NGL outlet proves approximately 9 % of the value to gas owners


What MAPL gives Wyoming

• Over the past 5 1/2 years:Over the past 5 1/2 years:

• NGL pipeline has NGL pipeline has provided an aggregate provided an aggregate $ 725 Million premium $ 725 Million premium to Wyoming gas to Wyoming gas ownersowners

• NGL pipeline has NGL pipeline has averaged an $ 130 averaged an $ 130 Million annual Million annual premium to Wyoming premium to Wyoming gas ownersgas owners


What Wyoming Gives MAPL

• Published tariff (Incentive) from Published tariff (Incentive) from Wyoming to Gulf Coast: $ 0.072 / Wyoming to Gulf Coast: $ 0.072 / gallongallon

• Annual volume moved during 2002:Annual volume moved during 2002:1,619,875,110 1,619,875,110

gallonsgallons

• Revenue received during 2002:Revenue received during 2002:$ $

116,631,008116,631,008

• Total MAPL revenue during 2002:Total MAPL revenue during 2002:$ $

269,367,769269,367,769

• Percentage of MAPL revenue earned Percentage of MAPL revenue earned from Wyomingfrom Wyoming 43 %43 %


System Operations

• Wyoming South: Capacity of 125,000 bpdWyoming South: Capacity of 125,000 bpd• Transports: 100,000 bpdTransports: 100,000 bpd

• Grand Junction South: Capacity of 200,000 bpdGrand Junction South: Capacity of 200,000 bpd• Transports: 125,000 bpdTransports: 125,000 bpd

• San Juan Basin South: Capacity of 215,000 bpdSan Juan Basin South: Capacity of 215,000 bpd• Transports: 200,000 bpdTransports: 200,000 bpd


System OperationsRocky Mountain Pipeline System Utilization

0

25

50

75

100

125

150

175

200

225

Feb

-99

May

-99

Aug

-99

Nov

-99

Feb

-00

May

-00

Aug

-00

Nov

-00

Feb

-01

May

-01

Aug

-01

Nov

-01

Feb

-02

May

-02

Aug

-02

Nov

-02

Feb

-03

May

-03

Aug

-03

Nov

-03

Feb

-04

May

-04

Bar

rels

Per

Day

(x

1,00

0)


System OperationsKey Observations

• Since Opal expansion in 2000, MAPL has been operationally full, or declines Since Opal expansion in 2000, MAPL has been operationally full, or declines have matched growth almost exactlyhave matched growth almost exactly

• Ethane margins can cut MAPL volumes by 25 %Ethane margins can cut MAPL volumes by 25 %• Corresponding gas pipeline increase approximately 6%Corresponding gas pipeline increase approximately 6%

• Next round of plant expansions will over fill pipeline, and force plants into ethane Next round of plant expansions will over fill pipeline, and force plants into ethane / propane rejection/ propane rejection

• Without MAPL expansion NGL value enhancement opportunities will shrink or Without MAPL expansion NGL value enhancement opportunities will shrink or go awaygo away


System OperationsExpansion Opportunity

• MAPL is spending $ 20 Million to permit a MAPL is spending $ 20 Million to permit a 50,000 bpd expansion out of Wyoming50,000 bpd expansion out of Wyoming

• Permit should be obtained in 4Q 2005Permit should be obtained in 4Q 2005• Pipeline could be in service 3Q 2006Pipeline could be in service 3Q 2006

• Completed expansion would cost $ 150 - 170 Completed expansion would cost $ 150 - 170 MillionMillion

• 200 miles of pipe200 miles of pipe• 23 pump stations modified and expanded23 pump stations modified and expanded

• Further information can be found atFurther information can be found at

http://www.epplp.com/mapl/EPPindex3.htmhttp://www.epplp.com/mapl/EPPindex3.htm

• Unique challenge: Expansion must be full to Unique challenge: Expansion must be full to provide adequate returnprovide adequate return


Future of NGLs in WyomingSummary and Dilemma• San Juan basin has remained flat to slight increases in NGL productionSan Juan basin has remained flat to slight increases in NGL production• Piceance / Uintah basin experiencing growthPiceance / Uintah basin experiencing growth• Southwest Wyoming experiencing growthSouthwest Wyoming experiencing growth

• Under current philosophy, MAPL must build expansion on speculative basis, no Under current philosophy, MAPL must build expansion on speculative basis, no “Open Season”“Open Season”

• As regulated pipeline, difference between cost of capital and maximum allowable As regulated pipeline, difference between cost of capital and maximum allowable return less than 10%return less than 10%

• Decision to expand is based more on the relative value of NGLs to natural gas, Decision to expand is based more on the relative value of NGLs to natural gas, rather than simply natural gas production growth or Wyoming gas pricesrather than simply natural gas production growth or Wyoming gas prices

• Without pipeline expansion, value opportunities diminish or disappear as Without pipeline expansion, value opportunities diminish or disappear as dewpoint control volumes replace discretionary volumesdewpoint control volumes replace discretionary volumes


Future of NGLs in WyomingSummary and Dilemma

• Decision to expand is made based on ratio of NGL prices to Wyoming Decision to expand is made based on ratio of NGL prices to Wyoming gas pricegas price

• Expansion decision will be made based on ethane and propane marginsExpansion decision will be made based on ethane and propane margins

• With little or no ethane and propane extraction, expansion is not With little or no ethane and propane extraction, expansion is not necessary, or can be delayednecessary, or can be delayed

All things being equal……All things being equal…… Best case scenario…..Best case scenario…..

Wyoming gas price increaseWyoming gas price increase

NGL Extraction Value, MAPL volumesNGL Extraction Value, MAPL volumes

Profitability of pipeline expansionProfitability of pipeline expansion

Wyoming gas price increaseWyoming gas price increase

NGL Extraction Value, MAPL volumesNGL Extraction Value, MAPL volumes

Profitability of pipeline expansionProfitability of pipeline expansion


Future of NGLs in Wyoming

• MAPL is financially 10 - 15% committed to pipeline expansionMAPL is financially 10 - 15% committed to pipeline expansion

• We are working with producers / processors to build cryogenic plants to We are working with producers / processors to build cryogenic plants to preserve the option to extract ethane and propane to enhance valuepreserve the option to extract ethane and propane to enhance value

• We can manage some of the ethane / propane margin risks to pipelineWe can manage some of the ethane / propane margin risks to pipeline

• Pipeline expansion provides growth of pipeline revenue for MAPL and Pipeline expansion provides growth of pipeline revenue for MAPL and value enhancement for Wyomingvalue enhancement for Wyoming

• Cryogenic plants are the key to successful MAPL expansionCryogenic plants are the key to successful MAPL expansion

• Cryogenic plants provide the necessary volume, and the discretionary Cryogenic plants provide the necessary volume, and the discretionary ethane and propane to fill an expansionethane and propane to fill an expansion


Support Your Local Support Your Local Cryogenic Processing PlantsCryogenic Processing Plants

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All rights reserved. Enterprise Products Partners L.P.1 Why Natural Gas Liquids are Important to the Wyoming Natural Gas Industry or Support Your Local