Bloomberg News

Enterprise to Sell Energy Transfer Units for $825 Million

December 30, 2011

(Updates with closing share prices in last paragraph.)

Dec. 27 (Bloomberg) -- Enterprise Products Partners LP agreed to sell units of Energy Transfer Equity LP for about $825.1 million, reducing its holdings in the rival pipeline company by 83 percent this year.

Enterprise, the second-largest owner of Energy Transfer, will sell the 22.8 million units to unidentified buyers, the Houston-based company said in a statement today. The sale will leave it with about 6.5 million Energy Transfer units, down from 39 million in May, Randy Burkhalter, Enterprise vice president for investor relations, said in an interview.

Proceeds from the sale will be used for capital projects and other purposes, Enterprise said. The company owns 50,000 miles (80,000 kilometers) of oil and refined-products pipelines. It began buying Energy Transfer units in 2007 to expand its natural-gas footprint, Burkhalter said. Enterprise, which opened a $1.5 billion Louisiana gas pipeline last month, has found other ways to invest in the fuel, he said.

Energy Transfer expects to close its $5.3 billion purchase of Southern Union Co. in the first quarter of next year. Energy Transfer, based in Dallas, sued Enterprise for breach of contract in October, after plans to build an oil pipeline between Oklahoma and Houston were scrapped.

Vicki Granado, a spokeswoman for Energy Transfer, had no immediate comment on the sale. ETC Holdings LP, an entity that holds units for Energy Transfer’s chief executive officer and management, owns the largest share of the company, according to data compiled by Bloomberg.

Energy Transfer climbed 3.5 percent to close at $41.20 in New York. Enterprise rose less than 1 percent to $45.58.

--Editors: Tina Davis, Jasmina Kelemen

-0- Dec/27/2011 15:43 GMT

To contact the reporter on this story: Mike Lee in Dallas at mlee326@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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