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vamsi krishna

Energy Transfer Partners, L.P. (the Partnership) is primarily engaged in the natural gas midstream and transportation and storage business through its operating subsidiary, La Grange Acquisition, L.P. (ETC OLP). The Company is also a retail marketer of propane in the United States through its operating subsidiaries, Heritage Operating, L.P. (HOLP) and Titan Energy Partners, L.P. The Partnership's midstream, transportation and storage businesses own and operate approximately 12,000 miles of in service natural gas gathering and transportation pipelines, three natural gas processing plants, two of which are connected to its gathering systems, 14 natural gas treating facilities and three natural gas storage facilities located in Texas. Through ETC OLP, it conducts its natural gas midstream, transportation and storage businesses through two segments: the midstream segment and the transportation and storage segment.

In April 2007, the Company announced the expansion of its retail propane subsidiary, Heritage Propane, through the acquisition of Hillsboro Gas Company located in Tampa, Florida, and M & J Gas Company, Inc. located in Lumberton, North Carolina. In January 2005, the Partnership acquired controlling interests in the Houston Pipeline System and related storage facilities from American Electric Power Corporation. On November 10, 2005, HPL Consolidation, L.P. (HPL) became a wholly owned subsidiary of ETC OLP. Prior to November 2005, the Partnership owned a 50% interest in South Texas Gas Gathering, a joint venture that owned an 80% interest in the Dorado System, a 61-mile gathering system located in South Texas. In November 2005, it purchased the remaining 50% equity interest in South Texas Gas Gathering. On June 1, 2006, the Partnership acquired all the propane operations of Titan Energy Partners, L.P. and Titan Energy, GP LLC (Titan). During the fiscal year ended August 31, 2006 (fiscal 2006), HOLP and Titan collectively acquired substantially all of the assets of eight propane businesses. In November 2006, the Company completed the first step of its acquisition of the Transwestern Pipeline. It acquired a 50% interest in CCE Holdings, LLC (CCEH) from GE Energy Financial Services and certain other investors. The Transwestern Pipeline interconnects with the Company's existing intrastate pipelines in west Texas. On December 1, 2006, CCEH redeemed the Company's 50% interest in exchange for 100% ownership of the Transwestern Pipeline. As a result, Transwestern Pipeline Company, LLC became a operating subsidiary of the Company.

Midstream Segment

The midstream segment focuses on the gathering, compression, treating, blending, processing and marketing of natural gas. Its operations are concentrated in the Austin Chalk trend of southeast Texas, the Permian Basin of west Texas, the Barnett Shale in north Texas and the Bossier Sands in east Texas. The midstream segment consists of the Southeast Texas System, a 4,250-mile integrated system located in southeast Texas that gathers, compresses, treats, processes and transports natural gas from the Austin Chalk trend. The Southeast Texas System is a natural gas gathering system covering 13 counties between Austin and Houston. The system includes the La Grange processing plant, the Madison processing plant and seven treating facilities. This system is connected to the Katy Hub through the 55-mile Katy Pipeline and is also connected to the Oasis Pipeline, as well as two power plants.

The La Grange and Madison processing plants are cryogenic natural gas processing plants that process natural gas that flows through its system to produce residue gas and natural gas liquids (NGLs). The plants have a processing capacity of approximately 320 million cubic feet per day. The Company's seven treating facilities have an aggregate capacity of 730 million cubic feet per day. These treating facilities remove carbon dioxide and hydrogen sulfide from natural gas gathered into its system before the natural gas is introduced to transportation pipelines to ensure that the gas meets pipeline quality specifications.

This segment has an interest in various midstream assets located in Texas and Louisiana, including the Vantex System, the Rusk County Gathering System, the Whiskey Bay System, the Dorado System and the Chalkley Transmission System. On a combined basis, these assets have a capacity of approximately 560 million cubic feet per day. The midstream segment also consists of marketing operations through its producer services business, in which the Company markets the natural gas that flows through its assets referred to as on-system gas. It is also engaged in marketing volumes of natural gas that do not move through its assets, referred to as off-system gas. For both on-system and off-system gas, the Company purchases natural gas from natural gas producers and other supply points and sell the natural gas to utilities, industrial consumers, other marketers and pipeline companies.

Transportation and Storage Segment

The transportation and storage segment focuses on the transportation of natural gas between markets from various natural gas producing areas through connections with other pipeline systems, as well as through its Oasis Pipeline, East Texas pipeline, Fort Worth Basin Pipeline, natural gas pipeline and storage assets that are referred to as the ET Fuel System, and Houston Pipeline System. The transportation and storage segment consists of the Oasis Pipeline, a 583-mile natural gas pipeline that directly connects the Waha Hub to the Katy Hub. The Oasis Pipeline is primarily a 36-inch diameter natural gas pipeline. It has bi-directional capability with approximately 1.2 billion cubic feet per day of throughput capacity moving west-to-east and greater than 750 million cubic feet per day of throughput capacity moving east-to-west. The Oasis Pipeline is flowing west-to-east with an average throughput of approximately 1.6 billion cubic feet per day. The Oasis Pipeline has many interconnections with other pipelines, power plants, processing facilities, municipalities and producers. The Oasis Pipeline is integrated with its Southeast Texas System.

The ET Fuel System, which serves the active drilling areas in the United States, consists of approximately 2,100 miles of intrastate natural gas pipeline and related natural gas storage facilities. With approximately 460 receipt and/or delivery points, including interconnects with pipelines providing direct access to power plants and interconnects with other intrastate and interstate pipelines. The ET Fuel System has total system throughput capacity of approximately 1.3 billion cubic feet per day of natural gas and total working storage capacity of 12.4 billion cubic feet per day of natural gas. The ET Fuel System operates its Bethel natural gas storage facility, with a working capacity of 6.4 billion cubic feet, an average withdrawal capacity of 300 million cubic feet per day and an injection capacity of 75 million cubic feet per day, and its Bryson natural gas storage facility, with a working capacity of 6 billion cubic feet, an average withdrawal capacity of 120 million cubic feet per day and an average injection capacity of 96 million cubic feet per day. Integrated into the Partnership's ET Fuel System is its Fort Worth Basin Pipeline, which became operational on May 26, 2005. The Fort Worth Basin Pipeline is a 55-mile, 24-inch natural gas pipeline that connects its pipelines in north Texas and provides transportation for natural gas production from the Barnett Shale producing area.

The East Texas Pipeline is a 148-mile natural gas pipeline that connects three treating facilities with the Partnership's southeast Texas System, of which one treating facility is owned by it. This pipeline is a multi-phased project that services producers in East and North Central Texas providing access to the Katy Hub. The East Texas Pipeline expansion had an initial capacity of over 400 million cubic feet per day, which increased to the capacity of 675 million cubic feet per day with the addition of the Grimes Counter Compressor Station.

The Houston Pipeline System consists of approximately 4, 200 miles of intrastate natural gas pipeline with an aggregate capacity of 2.4 billion cubic feet per day, the underground Bammel storage reservoir and related transportation assets. The Houston Pipeline System has a presence in the Houston Ship Channel and Katy Hub markets The Bammel storage facility has a total working gas capacity of approximately 65 billion cubic feet. The field has a peak withdrawal rate of 1.3 billion cubic feet per day.

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