Business & Finance
Business and Finance
Business and Finance
Tue, August 23, 2011 Southern Union Announces Permian Basin Midstream Expansion
HOUSTON--([ BUSINESS WIRE ])--Southern Union Company (NYSE:SUG) announced today that its Board of Directors has approved construction of the $235 million Red Bluff Project, a 200 MMcf/d natural gas processing plant and associated gathering, compression and treating facilities, through its midstream segment, Southern Union Gas Services (SUGS). This action builds on an existing multi-phase midstream expansion developed as a response to producer needs in the Avalon Shale. The new facilities will enable SUGS to accommodate natural gas production from existing and future producer commitments in the rapidly expanding Avalon, Bone Spring and Wolfcamp plays of West Texas and Southeast New Mexico. As part of the project, SUGS will construct approximately 60 miles of pipeline to deliver up to 20,000 bpd of natural gas liquids (NGL) into Lone Star NGLa™s recently-announced Permian-to-Mt. Belvieu pipeline expansion, under a 15-year firm arrangement. The project is expected to be completed in mid-2013.
"With substantial infrastructure already in place and a disciplined commitment to growth, SUGS is well positioned to continue providing vital midstream services for its Permian Basin customers."
aWe are excited to announce the Red Bluff Project,a said George L. Lindemann, Southern Uniona™s Chairman and Chief Executive Officer. aThis project is a continuation of SUGSa™ commitment to being the leading midstream service provider in the Avalon, Bone Spring and Wolfcamp production areas. With existing Permian Basin midstream infrastructure nearing capacity, Red Bluff provides long-term customer solutions for treating, processing and NGL take-away and significant earnings growth opportunities for our stockholders.a
aThe marked increase in Avalon production, combined with growing producer interest and success in the Bone Spring and Wolfcamp plays, highlights the continued need for further expansion of gathering, treating and processing services in the area,a said Eric D. Herschmann, Vice Chairman, President and Chief Operating Officer of Southern Union. aWith substantial infrastructure already in place and a disciplined commitment to growth, SUGS is well positioned to continue providing vital midstream services for its Permian Basin customers.a
About Southern Union Company
Southern Union Company, headquartered in Houston, is one of the nationa™s leading diversified natural gas companies, engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas. The company owns and operates one of the nationa™s largest natural gas pipeline systems with more than 20,000 miles of gathering and transportation pipelines and one of North Americaa™s largest liquefied natural gas import terminals, along with serving more than half a million natural gas end-user customers in Missouri and Massachusetts. For further information, visit [ www.sug.com ].
Cautionary Statements
This release contains aforward-looking statementsa within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.Forward-looking statements are based on managementa™s beliefs and assumptions.These forward-looking statements, which address the Companya™s expected business and financial performance, among other matters, are identified by terms and phrases such as:anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast and similar expressions.Forward-looking statements involve risks and uncertainties that may or could cause actual results to be materially different from the results predicted.Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: changes in demand for natural gas or NGL and related services by customers, in the composition of the Companya™s customer base and in the sources of natural gas or NGL accessible to the Companya™s system; the effects of inflation and the timing and extent of changes in the prices and overall demand for and availability of natural gas or NGL as well as electricity, oil, coal and other bulk materials and chemicals; adverse weather conditions, such as warmer or colder than normal weather in the Companya™s service territories, as applicable, and the operational impact of natural disasters; changes in laws or regulations, third-party relations and approvals, and decisions of courts, regulators and/or governmental bodies affecting or involving the Company, including deregulation initiatives and the impact of rate and tariff proceedings before FERC and various state regulatory commissions; the speed and degree to which additional competition, including competition from alternative forms of energy, is introduced to the Companya™s business and the resulting effect on revenues; the impact and outcome of pending and future litigation and/or regulatory investigations, proceedings or inquiries; the ability to comply with or to successfully challenge existing and/ornew environmental, safety and other laws and regulations; unanticipated environmental liabilities; the uncertainty of estimates, including accruals and costs of environmental remediation; the impact of potential impairment charges; exposure to highly competitive commodity businesses and the effectiveness of the Company's hedging program; the ability to acquire new businesses and assets and to integrate those operations into its existing operations, as well as its ability to expand its existing businesses and facilities; the timely receipt of required approvals by applicable governmental entities for the construction and operation of the pipelines and other projects; the ability to complete expansion projects on time and on budget; the ability to control costs successfully and achieve operating efficiencies, including the purchase and implementation of new technologies for achieving such efficiencies; the impact of factors affecting operations such as maintenance or repairs, environmental incidents, natural gas pipeline system constraints and relations with labor unions representing bargaining-unit employees; the performance of contractual obligations by customers, service providers and contractors; exposure to customer concentrations with a significant portion of revenues realized from a relatively small number of customers and any credit risks associated with the financial position of those customers; changes in the ratings of the Companya™s debt securities; the risk of a prolonged slow-down in growth or decline in the United States economy or the risk of delay in growth or decline in the United States economy, including liquidity risks in United States credit markets; the impact of unsold pipeline capacity being greater than expected; changes in interest rates and other general market and economic conditions, and in the Companya™s ability to continue to access its revolving credit facility and to obtain additional financing on acceptable terms, whether in the capital markets or otherwise; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans and other postretirement benefit plans; acts of nature, sabotage, terrorism or other similar acts that cause damage to the facilities orthe Companya™ssuppliers' or customers' facilities; market risks beyond the Companya™s control affecting its risk management activities including market liquidity, commodity price volatility and counterparty creditworthiness; the availability/cost of insurance coverage and the ability to collect under existing insurance policies; the risk that material weaknesses or significant deficiencies in internal controls over financial reporting could emerge or that minor problems could become significant; changes in accounting rules, regulations and pronouncements that impact the measurement ofresults of operations, the timing of when such measurements are to be made and recorded and the disclosures surrounding these activities; the effects of changes in governmental policies and regulatory actions, including changes with respect to income and other taxes, environmental compliance, climate change initiative, authorized rates of recovery of costs (including pipeline relocation costs) and permitting for new natural gas production accessible to the Companya™s systems; market risks affecting the Companya™s pricing of its services provided and renewal of significant customer contracts; other risks and unforeseen events, including other financial, operational and legal risks and uncertainties detailed from time to time in filings with the Securities and Exchange Commission; actions taken to protect species under the Endangered Species Act and the effect of those actions on the Companya™s operations; and the likelihood and timing of the proposed merger (Merger) with Energy Transfer Equity, L.P. (ETE), the terms and conditions of any required regulatory approvals of the proposed Merger, the impact of the proposed Merger on Southern Uniona™s employees and potential diversion of managementa™s time and attention from ongoing business during this time period.
These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of the Companya™s forward-looking statements.Other factors could also have material adverse effects on the Companya™s future results.These and other risks are described in greater detail in the Companya™s Annual Report on Form 10-K for the year ended December 31, 2010 and its other reports filed with the Securities and Exchange Commission.In light of these risks, uncertainties and assumptions, the events described in forward-looking statements might not occur or might occur to a different extent or at a different time than the Company has described.The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
Additional Information
In connection with the proposed Merger, ETE and the Company have filed/will file a proxy statement / prospectus and other documents with the SEC. Investors and security holders are urged to carefully read the definitive proxy statement/prospectus when it becomes available because it will contain important information regarding ETE, the Company and the transaction.
A definitive proxy statement/prospectus will be sent to stockholders of the Company seeking their approval of the transaction. Investors and security holders may obtain a free copy of the definitive proxy statement/prospectus (when available) and other documents filed by ETE and the Company with the SEC at the SECa™s website, [ www.sec.gov ]. The definitive proxy statement/prospectus (when available) and such other documents relating to ETE may also be obtained free of charge by directing a request to Energy Transfer Equity, L.P., Attn: Investor Relations, 3738 Oak Lawn Avenue, Dallas, Texas 75219, or from ETEa™s website, [ www.energytransfer.com ]. The definitive proxy statement/prospectus (when available) and such other documents relating to the Company may also be obtained free of charge by directing a request to Southern Union Company, Attn: Investor Relations, 5444 Westheimer Road, Houston, Texas 77056, or from the Companya™s website, [ www.sug.com ].
ETE, the Company and their respective directors and executive officers may, under the rules of the SEC, be deemed to be aparticipantsa in the solicitation of proxies in connection with the proposed transaction. Information concerning the interests of the persons who may be aparticipantsa in the solicitation will be set forth in the definitive proxy statement/prospectus when it becomes available.
