press release

Texaco Press Release - Texaco Expanding Natural Gas Liquids (NGL) Market Across Louisiana Gulf Coast

TENDS (Texaco Expanded NGL Distribution System) to Fortify Company's Strategic Position as a Premier Producer, Processor and Marketer of NGLs

FOR RELEASE: TUESDAY, APRIL 15, 1997.

NEW ORLEANS, April 15 - The Texaco Expanded NGL Distribution System (TENDS), a comprehensive 500-mile pipeline network designed by Texaco to distribute Natural Gas Liquids (NGLs) safely and efficiently, is spreading to growing markets across South Louisiana. Robert G. Wells, Executive Vice President of Texaco Natural Gas Inc. (TNGI) announced today that full operations will commence in early 1998.

NGLs are liquid products derived from the production of natural gas and include ethane, propane, iso-butane, normal butane and natural gasoline. These products are used primarily as chemical feedstocks and specialty fuels at various refineries and petrochemical plants throughout South Louisiana.

The $70 million TENDS project is an important element in TNGI's South Louisiana strategy embracing growth and development of new business. TENDS consists of a network of pipelines capable of transporting a combined maximum of 230,000 barrels of product each day to numerous refineries and petrochemical complexes across South Louisiana.

TENDS will offer important services to the Gulf Coast market which is expected to grow dramatically with new supplies of NGLs.

"Supplies of NGLs are rapidly increasing as more deepwater natural gas exploratory and development projects in the Gulf of Mexico commence production," explained Wells. "Two of Texaco's previously announced deepwater discoveries, Petronius and Gemini, are expected to commence initial oil and natural gas production by the end of 1999, expanding the supply for NGLs even further."

Primarily as a result of escalating offshore natural gas production, the volume of NGLs entering South Louisiana is expected to roughly double from approximately 290,000 barrels per day (BPD) to 450,000-550,000 BPD by the year 2000. Production from these large deepwater projects usually contains greater amounts of NGLs than existing production in the Gulf of Mexico.

TENDS Reliable and Flexible

TENDS will provide a flexible, safe and reliable method of transporting natural gas liquids throughout South Louisiana markets.

"TENDS will further strengthen our position as a leading producer, processor, transporter and marketer of NGLs in South Louisiana," said Wells.

With a comprehensive system of existing pipelines, coupled with new construction, TENDS will provide Texaco with distinct advantages over other Gulf Coast natural gas liquids marketers.

Features of TENDS

TENDS has already completed an $11.3 million acquisition of an existing 83-mile pipeline from Dow Intrastate Gas Company (DIGCO) which was previously utilized to transport natural gas. An additional $3.5 million will be spent upgrading this 8-inch pipeline, which forms the western leg of TENDS, beginning at Texaco's fractionator located at the Henry Hub (near New Iberia) and extending to Sulphur, La. This leg of the pipeline will provide NGL deliveries to Lake Charles, La., customers beginning this summer.

"The acquisition of this pipeline ensures Texaco access to a high-demand market of large refinery and petrochemical users of natural gas liquids," Wells said. "Additionally, we have begun construction of pipelines to petrochemical plants, storage facilities, and refineries along other sections of TENDS at an anticipated cost of $55 million."

Texaco is expanding its Breaux Bridge pipeline system, connecting the Henry fractionator to the Anse la Butte storage area and the Dixie Pipeline, from a single 35-mile pipeline to three bi-directional pipelines. The new pipeline system will permit multiple product movements into and out of the Anse la Butte storage area. Henry propane will have greater access to the Dixie Pipeline system.

Texaco's existing 65-mile Acadian pipeline from Henry to Napoleonville, (La)., will be extended with 14 miles of new pipeline to the Sorrento (La.) SDome Storage area. The Acadian pipeline will be bi-directional with tie-ins in the Napoleonville area. The Sorrento Storage area will become a key hub for receipt and delivery of finished NGL products in South Louisiana.

Texaco is also upgrading its existing dual-lateral 45 mile pipelines which connect the Sorrento facilities to the Discovery fractionator at the Paradis (La.) Gas Plant. Construction is scheduled to begin this summer on two new 12 mile bi-directional pipelines which will increase the capacity of the Sorrento System from 24,000 BPD to 96,000 BPD. These four pipelines will receive and deliver NGL products to refineries and petrochemical complexes along the Mississippi River Industrial Corridor.

Another integral part of TENDS will be the construction of dual six-inch pipelines connecting the Discovery fractionator at Paradis, (La.) to the BP Alliance Refinery near Belle Chasse, (La.), enabling multiple bi-directional product movements.

TENDS and Strategic Commitment

TENDS will further complement upstream, midstream and downstream Texaco strategies by:

  • providing competitive market access for liquids produced from Texaco Exploration and Production Inc.'s Offshore and Onshore Region prospects.
  • enhancing market value for liquids produced at and marketed from Texaco's South Louisiana processing and fractionation facilities.
  • integrating the Discovery Project, a 30-inch, 150-mile natural gas pipeline which will access deepwater production taking place in the central Gulf of Mexico. Texaco, and its 50 percent partner in the Discovery Project, MAPCO, recently began construction of the pipeline.
  • promoting its extensive barge, truck and rail facilities as viable options for moving NGLs in South Louisiana.

Updated: April 1997