ETP, Regency to acquire LDH

Energy Transfer Partners, L.P. (ETP) and Regency Energy Partners LP have formed a joint venture to acquire LDH Energy Asset Holdings LLC from Louis Dreyfus Highbridge Energy LLC for approximately USD 1.925 billion in cash. LDH owns and operates a natural gas liquids storage, fractionation and transportation business. Primarily located in Mont Belvieu, Texas, LDH’s storage assets are one of the largest NGL storage, distribution and trading complexes in North America. Its West Texas Pipeline transports NGLs through a 1066mi intrastate pipeline system that begins in the Permian Basin in west Texas, passes through the Barnett Shale production area in north Texas and ends at the Mont Belvieu storage and fractionation complex. LDH also owns and operates fractionation and processing assets in Louisiana. This acquisition is expected to substantially develop ETP’s and Regency’s asset portfolios, adding an NGL platform with storage, transportation and fractionation capability. This acquisition will also provide ETP and Regency with additional, steady, fee-based revenues. ETP will contribute USD 1.35 billion in exchange for a 70% ownership interest in the JV; Regency will contribute USD 578 million in return for 30% ownership interest in the JV. The venture will be overseen by a two-person board of directors with ETP and Regency each allowed to appoint one director. The transaction is expected to close in the second quarter of 2011; completion of the acquisition is subject to customary closing conditions, including regulatory approvals.

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