Propylene Fractionation

Enterprise provides propylene fractionation, storage, transportation and export services to the petrochemical industry. Propylene is used in the production of plastic consumer products, pharmaceuticals, detergents and solvents. Demand for chemical and polymer grade propylene has grown by approximately 4% annually from 1996 to 2003 according to the industry trade association, Chemical Market Associates, Inc. ("CMAI"). In 2004, according to CMAI, worldwide demand for propylene grew by approximately 5% and is expected to continue to grow at that rate through 2008, with some years as high as 6%.

The two primary sources of polymer grade propylene are from ethylene steam crackers and from fractionators that separate propane/propylene mixes produced as a byproduct of crude oil refining. Projected growth in ethylene steam cracking capacity will not meet the expected demand for propylene. We believe propylene demand growth will be met primarily by fractionating refinery-sourced propane/propylene mixes.

Enterprise has been in the propylene fractionation business since 1978. We have ownership interests in four propylene fractionation plants that are connected to an extensive network of pipeline transportation, storage and import/export facilities, in Texas and Louisiana, providing our customers with operational flexibility. Three of these plants are located in Mont Belvieu and have a combined net capacity to produce 58 MBPD of polymer grade propylene.

Polymer grade propylene is at least 99.5% pure propylene and is produced by fractionating chemical grade propylene or refinery grade propylene.

In addition to the three polymer grade propylene plants we own at Mont Belvieu, Enterprise also operates and owns a 30% interest in a chemical grade propylene fractionator as part of a joint venture with ExxonMobil Chemical near Baton Rouge, Louisiana. Enterprise designed, constructed and operates the plant and ExxonMobil supplies the feedstock to the facility and is the major customer for the end product. This fractionation facility has a gross capacity to produce 23 MBPD of chemical grade propylene.

As demand for propylene increases driven by overall economic growth, we believe our partnership will benefit from higher utilization rates and fees from our existing facilities and opportunities to construct new facilities supported by long-term contracts with existing, as well as new customers.

Propylene Fractionation Assets

Facility		Ownership Interest at December 31, 2003	Gross Capacity (MBPD)	Net Capacity (MBPD)
Mont Belvieu, TX:
Polymer Grade	Splitter I	54.6%⁽¹⁾	17	17
	Splitter II	100.0%	14	14
	Splitter III	66.7%	41	27
Baton Rouge, LA:
Chemical Grade		30.0%	23	7
Total Capacity			95	65

⁽¹⁾Enterprise owns a 54.6% interest in Splitter I. Enterprise leases the remaining 45.4% interest in this facility from an affiliate of Shell.