Profile: Energy Transfer Equity L.P. (ETE)

Energy Transfer Equity, L.P. (ETE) operates through its subsidiaries, Energy Transfer Partners, L.P. (ETP), Energy Transfer Partners G.P., L.P (ETP GP), the General Partner of ETP, and ETP GP’s General Partner, Energy Transfer Partners, L.L.C. (ETP LLC). As of December 31, 2008, the Company’s business operations are conducted only through ETP’s wholly owned subsidiary operating partnerships (collectively referred to as the Operating Partnerships), Energy Transfer Company (ETC OLP), a Texas limited partnership engaged in midstream and intrastate transportation and natural gas storage operations, Energy Transfer Interstate Holdings, LLC (ET Interstate), the parent company of Transwestern Pipeline Company, LLC (Transwestern), a Delaware limited liability company engaged in interstate transportation of natural gas, and ETC Midcontinent Express Pipeline, LLC (ETC MEP or MEP), a Delaware limited liability company engaged in interstate transportation of natural gas, and Heritage Operating, L.P. (HOLP) and Titan Energy Partners, L.P. (Titan), both Delaware limited partnerships engaged in retail propane operations.

Midstream Segment

The Company’s midstream business owns and operates approximately 6,700 miles of in service natural gas gathering pipelines, three natural gas processing plants, 11 natural gas treating facilities, and 11 natural gas conditioning facilities. The Company’s midstream segment focuses on the gathering, compression, treating, blending, processing and marketing of natural gas, and its operations are concentrated in the Austin Chalk trend of southeast Texas, the Permian Basin of west Texas and New Mexico, the Barnett Shale in north Texas, the Bossier Sands in east Texas, and the Uinta and Piceance Basins in Utah and Colorado.

The midstream segment accounted for approximately 14% of the Company’s total consolidated operating income for the year ended December 31, 2008. Its midstream segment results are derived primarily from margins it realizes for natural gas volumes that are gathered, transported, purchased and sold through its pipeline systems, processed at its processing and treating facilities, and the volumes of natural gas liquids (NGLs) processed at its facilities. ETE also markets natural gas on its pipeline systems in addition to other pipeline systems to realize incremental revenue on gas purchased, increase pipeline utilization and provide other services.

The Southeast Texas System is a 5,000-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 large natural gas gathering system covering 13 counties between Austin and Houston. The system includes the La Grange processing plant, 11 treating facilities and four conditioning facilities. This system is connected to the Katy Hub through the 320-mile East Texas pipeline and is also connected to the Oasis pipeline, as well as two power plants.

The La Grange processing plant is a cryogenic natural gas processing plant that processes the natural gas that flows through the Company’s system to produce residue gas and NGLs. The plant has a processing capacity of approximately 240 million cubic feet per day (MMcf/d). Its 11 treating facilities have an aggregate capacity of 1.3 billion cubic feet per day (Bcf/d). 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. ETE’s four conditioning facilities have an aggregate capacity of 670 MMcf/d. These conditioning facilities remove heavy hydrocarbons from the gas gathered into its systems so the gas can be redelivered and meet downstream pipeline hydrocarbon dew point specifications.

The North Texas System is a 160-mile integrated system located in four counties in North Texas that gathers, compresses, treats, processes and transports natural gas from the Barnett Shale trend. The system includes ETE’s Godley plant, which processes rich natural gas produced from the Barnett Shale and is connected with the North Texas System and the ET Fuel System. The facility consists of a cryogenic processing plant with processing capacity of approximately 500 MMcf/d and a conditioning facility with approximately 100 MMcf/d of processing capacity.

The Canyon Gathering System consists of approximately 1,360 miles of gathering pipeline ranging in diameters from two inches to 16 inches in the Piceance-Uinta Basin of Colorado and Utah and six conditioning plants with an aggregated processing capacity of 90 MMcf/d. The system gathers approximately 300 MMcf/d from 1,400 wells and is connected to five major pipeline systems. The midstream segment also includes the Company’s interests in various midstream assets located in Texas, New Mexico and Louisiana, with a combined capacity of approximately 470 MMcf/d. Marketing operations, in which ETE markets the natural gas that flows through its assets, referred to as on-system gas, and markets 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 sells the natural gas to utilities, industrial consumers, other marketers and pipeline companies, thereby generating gross margins based upon the difference between the purchase and resale prices.

Intrastate Transportation and Storage Segment

The Company’s intrastate transportation and storage business owns and operates approximately 7,800 miles of natural gas transportation pipelines, three natural gas storage facilities and six natural gas treating facilities. Through ETC OLP, the Company owns an intrastate pipeline system in the United States with interconnects to major consumption areas throughout the United States. Its intrastate transportation and storage segment focuses on the transportation of natural gas between major markets from various natural gas producing areas through connections with other pipeline systems, as well as through its Oasis pipeline, its East Texas pipeline, its natural gas pipeline and storage assets that is referred to as the ET Fuel System, and its Houston pipeline system (HPL) System. The intrastate transportation and storage operations accounted for approximately 65% of ETE’s total consolidated operating income during 2008.

The ET Fuel System comprises approximately 2,680 miles of intrastate natural gas pipeline and related natural gas storage facilities. The ET Fuel System provides access to the Waha Hub near Midland, Texas, the Katy Hub near Houston, Texas and the Carthage Hub in east Texas, the three major natural gas trading centers in Texas. The ET Fuel System has total system throughput capacity of approximately 4.1 Bcf/d.

The ET Fuel System also operates its Bethel natural gas storage facility, with a working capacity of 6.4 billion cubic feet (Bcf), an average withdrawal capacity of 300 MMcf/d and an injection capacity of 75 MMcf/d, and its Bryson natural gas storage facility, with a working capacity of six Bcf, an average withdrawal capacity of 120 MMcf/d and an average injection capacity of 96 MMcf/d. Included in the ET Fuel System is a significant portion of the Company’s Cleburne to Carthage pipeline that connects its North Texas pipeline, a part of its ET Fuel System, its pipelines in the Barnett Shale region, and its Bethel storage facility to its Texoma pipeline in East Texas. In addition, the ET Fuel System is connected with ETE’s Godley plant.

The Oasis pipeline is primarily a 36-inch diameter natural gas pipeline that directly connects the Waha Hub to the Katy Hub. It has bi-directional capability with approximately 1.2 Bcf/d of throughput capacity moving west-to-east and greater than 750 MMcf/d of throughput capacity moving east-to-west. The Oasis pipeline has many interconnections with other pipelines, power plants, processing facilities, municipalities and producers.

The HPL System comprises approximately 4,200 miles of intrastate natural gas pipeline with an aggregate capacity of 5.5 Bcf/d, the underground Bammel storage reservoir and related transportation assets. The system has access to multiple sources of historically significant natural gas supply reserves from south Texas, the Gulf Coast of Texas, east Texas and the western Gulf of Mexico, and is directly connected to major gas distribution, electric and industrial load centers in Houston, Corpus Christi, Texas City and other cities located along the Gulf Coast of Texas. The HPL System also includes 32 miles of the Cleburne to Carthage pipeline from the Company's Texoma pipeline interconnect to the Carthage Hub.

The Bammel storage facility has a total working gas capacity of approximately 62 Bcf and has a peak withdrawal rate of 1.3 Bcf/d. The Bammel storage facility is strategically located near the Houston Ship Channel market area and the Katy Hub and is ideally suited to provide a physical backup for on-system and off-system customers. During 2008, ETE completed the expansion of its Cleburne to Carthage pipeline from the Texoma pipeline interconnect to the Carthage Hub through the installation of 32 miles of 42-inch pipeline. The expansion, which the Company refers to as the Carthage Loop, added 500 MMcf/d of pipeline capacity from Cleburne to the Carthage Hub.

The East Texas pipeline is a 320-mile natural gas pipeline that connects three treating facilities, one of which the Company owns, with its Southeast Texas System. This pipeline was the first phase of a multi-phased project that increased service to producers in East and North Central Texas and provided access to the Katy Hub. The East Texas pipeline expansion had an initial capacity of over 400 MMcf/d, which increased to the current capacity of two Bcf/d with the addition of the Grimes County Compressor Station.

Interstate Transportation Segment

The Company’s interstate transportation segment accounted for approximately 11% of its total consolidated operating income for 2008. The results from its interstate transportation segment are primarily derived from the fees earned from natural gas transportation services and operational gas sales. ETE’s interstate transportation operation began with the acquisition of the Transwestern pipeline.

The Transwestern pipeline is an open-access natural gas interstate pipeline extending from the gas producing regions of West Texas, eastern and northwest New Mexico, and southern Colorado primarily to pipeline interconnects off the east end of its system and to pipeline interconnects at the California border. Transwestern comprises approximately 2,700 miles of pipeline with a capacity of 2.1 Bcf/d. The Transwestern pipeline has access to three significant gas basins: the Permian Basin in West Texas and eastern New Mexico; the San Juan Basin in northwest New Mexico and southern Colorado, and the Anadarko Basin in the Texas and Oklahoma panhandle. Natural gas sources from the San Juan Basin and surrounding producing areas can be delivered eastward to Texas intrastate and mid-continent connecting pipelines and natural gas market hubs, as well as westward to markets like Arizona, Nevada and California. Transwestern’s customers include local distribution companies, producers, marketers, electric power generators and industrial end-users. Transwestern transports natural gas in interstate commerce.

ETE initiated the Phoenix project, consisting of 260 miles of 42-inch and 36-inch pipeline lateral, with a throughput capacity of 500 MMcf/d, connecting the Phoenix area to Transwestern’s existing mainline at Ash Fork, Arizona and approximately 25 miles of 36-inch pipeline looping of Transwestern’s existing San Juan lateral, adding 375 MMcf/d of capacity. As of December 31, 2008, the Company constructed, through a 50/50 joint venture arrangement with KMP, the Midcontinent Express pipeline, an approximately 500-mile interstate natural gas pipeline. The Midcontinent Express pipeline will originate near Bennington, Oklahoma, be routed through Perryville, Louisiana, and terminate at an interconnect with Transco’s interstate natural gas pipeline in Butler, Alabama, which transports natural gas to the significant natural gas markets in the northeast portion of the United States. The pipeline will have an initial capacity of 1.5 Bcf/d, all of which capacity has been committed pursuant to predominantly 10-year firm transportation contracts with shippers. The pipeline has also received long-term transportation contracts related to an additional 0.3 Bcf/d of capacity that is planned to be added through the utilization of additional compression. Mobilization for construction of the pipeline commenced in September 2008, following Federal Energy Regulatory Commission’s (FERC) approval.

In October 2008, ETE entered into an agreement with KMP for a 50/50 joint development of Fayetteville Express pipeline, an approximately 187-mile natural gas pipeline that will originate in Conway County, Arkansas, continue eastward through White County, Arkansas and terminate at an interconnect with Trunkline Gas Company in Quitman County, Mississippi. Fayetteville Express Pipeline LLC (FEP), the entity formed to own and operate the pipeline, initiated public review of the project pursuant to the FERC’s National Environmental Policy Act (NEPA) pre-filing review process in November 2008. FEP has secured binding 10-year commitments for transportation of approximately 1.85 Bcf/d. The pipeline will interconnect with Federal Energy Regulatory Commission (NGPL) in White County, Arkansas, Texas Gas Transmission in Coahoma County, Mississippi, and ANR Pipeline Company in Quitman County, Mississippi. NGPL is operated and partially owned by Knight, Inc. Knight, Inc. owns the general partner of KMP.

On January 27, 2009, the Company announced that it had entered into an agreement with Chesapeake Energy Marketing, Inc., a wholly owned subsidiary of Chesapeake to construct the Tiger pipeline, a 178-mile, 42-inch interstate natural gas pipeline. The Tiger pipeline will connect to ETP’s dual 42-inch pipeline system near Carthage, Texas, extend through the heart of the Haynesville Shale and end near Delhi, Louisiana, and interconnect with at least seven interstate pipelines at various points in Louisiana. The agreement with Chesapeake provides for a 15-year commitment for firm transportation capacity of approximately 1.0 Bcf/d.

Retail Propane Operations

Through HOLP and Titan, the Company serves more than one million customers from approximately 440 customer service locations in approximately 40 states. The propane operation extends from coast to coast with concentrations in the western, upper midwestern, northeastern and southeastern regions of the United States. ETE’s retail propane operations accounted for approximately 10% of its total consolidated operating income during fiscal 2008.