Enbridge to acquire Shell’s oil pipeline and storage systems

Enbridge Energy Partners announced that it has agreed to acquire crude oil pipeline and storage systems from Shell Pipeline Company and Shell Oil Products US for $ 131 mm, excluding customary closing adjustments for working capital and other items.
Closing of the purchase is anticipated to occur in the first quarter of 2004, subject to regulatory approvals and a right of first refusal on one pipeline.

The assets being acquired serve refineries in the Mid-Continent from the Cushing, Oklahoma Hub and consist of some 615 miles of active crude oil pipelines and 9.5 mm barrels of storage capacity. Included are:
-- The 433 mile Ozark pipeline that currently transports 170,000 bpd of crude oil from Cushing to Wood River, Illinois;
-- A 58.8 % interest in the 135 mile Osage pipeline and associated 1.2 mm barrel storage terminal that currently delivers 110,000 bpd and is connected to two refineries in Kansas (subject to satisfaction of a right of first refusal in favour of the other owner);
-- The 47 mile West Tulsa pipeline that currently transports 55,000 bpd to two refineries in Oklahoma; and
-- The Shell storage terminal at Cushing, which is one of the largest terminal facilities in North America with 8.3 mm barrels of storage capacity.

"The acquisition of this group of crude oil assets provides the Partnership with strong financial and strategic benefits," said Dan C. Tutcher, President of the Partnership's general partner and management company.
"These systems provide stable cash flows from toll or fee-based revenues derived from a combination of regulated assets and contracted unregulated assets. We anticipate that these assets will contribute immediately to distributable cash flow per unit. The assets are consistent with our core operating expertise in crude oil pipelines. Moreover, their throughput originates from sources of supply different from those of the Partnership's other crude oil systems, providing increased diversity in the Partnership's sources of cash flow."

Concurrently, Enbridge plans to acquire Shell's Patoka West Tank Farm and its 60 % interest in the Woodpat Pipeline for $ 9.5 mm. These assets complement Enbridge's initiative to access new markets for Canadian crude oil.
The market access initiative will benefit the Partnership by facilitating throughput on its Lakehead system.

Enbridge Energy Partners indirectly owns the US portion of the world's longest liquid petroleum pipeline and is active in natural gas gathering, processing and transmission. Enbridge Energy Management manages the business and affairs of Enbridge Partners and its principal asset is an approximate 18 % interest in Enbridge Partners.
Enbridge Energy, an indirect wholly owned subsidiary of Enbridge of Calgary, Alberta, is the General Partner of Enbridge Partners in which it holds an approximate 12 % effective interest.