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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 2, 2004
PANHANDLE EASTERN PIPE LINE COMPANY, LLC
(Exact name of registrant as specified in its charter)
Delaware 1-2921 44-0382470
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5444 Westheimer Court 77210-4967
Houston,Texas 77056 (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (713) 989-7000
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ITEM 5. OTHER EVENTS
On February 2, 2004, Southern Union Company, the parent of Panhandle Eastern
Pipe Line Company, LLC (the Company), issued a press release announcing that its
subsidiary, Trunkline LNG Company, has entered into an agreement with BG LNG
Services, LLC, a subsidiary of BG Group of the United Kingdom, for a Phase II
modification of Trunkline LNG's Lake Charles, La., liquefied natural gas (LNG)
terminal, and further that the Company's subsidiary, Trunkline Gas Company, has
also entered into an agreement with BG LNG Services, LLC for the construction of
a 23-mile pipeline from the LNG terminal to the mainline of Trunkline Gas
Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibit No.
99.a Press Release issued by Southern Union Company dated February 2, 2004.
ITEM 9. REGULATION FD DISCLOSURE
Earlier today, Southern Union Company issued a press release announcing its
operating performance for the three- and six-month periods ended December 31,
2003 and 2002. In connection therewith, Southern Union Company filed a Current
Report on Form 8-K in which the following information relating to the Company
was disclosed:
In June 2003, Southern Union completed its acquisition of Panhandle Eastern Pipe
Line Company and its subsidiaries (collectively, "Panhandle Energy") from CMS
Energy; the three- and six-month periods ended December 31, 2003, include net
earnings from Panhandle Energy of $24,763,000 (or $.33 per share of Southern
Union common stock)and $44,883,000, respectively.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PANHANDLE EASTERN PIPE LINE COMPANY, LLC
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(Registrant)
Date February 4, 2004 By /s/ DAVID J. KVAPIL
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David J. Kvapil
Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
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99.a Press Release issued by Southern Union Company dated
February 2, 2004.
EXHIBIT 99.a
04-01
For further information:
JOHN BARNETT JACK WALSH
Director of Public Information Director of Investor Relations
Panhandle Energy Southern Union Company
713/989-7556 570/829-8662
SOUTHERN UNION PLANS
PHASE II MODIFICATION OF
NORTH AMERICA'S LARGEST LNG TERMINAL
MODIFICATION TO INCREASE SENDOUT CAPACITY BY 50%
WILKES-BARRE, PA. - (BUSINESS WIRE) - FEBRUARY 2, 2004 - Southern Union
Company (NYSE:SUG), through its subsidiary Trunkline LNG Company, has entered
into an agreement with BG LNG Services, LLC, a subsidiary of BG Group of the
United Kingdom, for a Phase II modification of Trunkline LNG's Lake Charles,
La., liquefied natural gas ("LNG") terminal. Through its Trunkline Gas Company
subsidiary, Southern Union has also contracted with BG LNG for the construction
of a 23-mile pipeline from the LNG terminal to the mainline of Trunkline Gas.
Trunkline LNG and Trunkline Gas expect to invest a total of approximately $125
million in the projects.
Trunkline LNG operates North America's largest LNG terminal. With the
Phase II modification, sendout capacity from the LNG terminal will increase by
an incremental 50 percent to 1.8 billion cubic feet per day (Bcf/d), with a peak
sendout capacity of 2.1 Bcf/d. The additional capacity will be fully contracted
to BG LNG under an agreement expiring in 2023. Phase II is designed to meet the
growing requirements of BG LNG. Construction includes additional pumps and
vaporizers along with unloading facilities added to a second dock.
Trunkline Gas will also build a second 30-inch-diameter, 23-mile
natural gas pipeline from the LNG terminal to its mainline, which will run
parallel to its existing pipeline. The second pipeline will transport additional
capacity created by the expansion, increasing pipeline capacity from the
terminal to 2.1 Bcf/d from 1.3 Bcf/d. BG LNG and Trunkline Gas have signed a
19-year transportation agreement for the capacity on the new pipeline - also
expiring in 2023.
In accordance with approval from the Federal Energy Regulatory
Commission ("FERC") received in March 2003, Trunkline LNG is currently building
the Phase I expansion of the Lake Charles LNG terminal that will increase
sendout capacity to 1.2 Bcf/d from its current 630 million cubic feet per day
and increase terminal storage capacity to 9 Bcf from its current 6.3 Bcf. Phase
I is expected to be completed and in service by December 31, 2005. Phase II is
expected to be completed and in service by early to mid-2006. Upon completion of
both phases, BG LNG will have 100 percent of the storage and sendout capacity of
the terminal.
Trunkline LNG and Trunkline Gas plan to file pipeline construction and
LNG expansion plans with the FERC later this month. Construction will begin
after approval from the FERC is received. Much of the Phase II construction is
expected to be performed simultaneously with Phase I construction.
Thomas F. Karam, President and Chief Operating Officer of Southern
Union, stated, "LNG is an increasingly important part of America's natural gas
supply portfolio and is a key component of our nation's fuel security. With this
agreement, we will have effectively tripled the size of Trunkline LNG by 2006.
These projects will ensure that Southern Union, together with BG LNG, continues
to provide America with a significant source of natural gas - now and long into
the future."
"BG LNG is delighted to be working with Trunkline LNG and Trunkline
Gas," said Betsy Spomer, BG Vice President - Business Development, North
America, Caribbean and Global LNG. "The agreement is another step in the
development of our LNG strategy, and underlines our ability to increase LNG
deliveries into the United States in response to the country's growing energy
demand."
Southern Union Company is engaged primarily in the transportation and
distribution of natural gas. Panhandle Eastern Pipe Line Company, Trunkline Gas
Company, Trunkline LNG Company and Sea Robin Pipeline Company, operating as
Panhandle Energy, are units of Southern Union Company. Panhandle Energy operates
more than 10,000 miles of mainline natural gas pipeline extending from the Gulf
of Mexico to the Midwest and Canada. These pipelines access the major natural
gas supply regions of the Louisiana and Texas Gulf Coasts as well as the
Midcontinent. The pipelines have a combined peak day delivery capacity of 5.3
billion cubic feet per day and 90 billion cubic feet of underground storage.
Through its local distribution companies, Southern Union also serves
approximately one million natural gas end-user customers in Missouri,
Pennsylvania, Massachusetts and Rhode Island. For further information, visit
www.southernunionco.com.
THIS RELEASE AND OTHER COMPANY REPORTS AND STATEMENTS ISSUED OR MADE
FROM TIME TO TIME CONTAIN CERTAIN "FORWARD-LOOKING STATEMENTS" CONCERNING
PROJECTED FUTURE FINANCIAL PERFORMANCE, EXPECTED PLANS OR FUTURE OPERATIONS.
SOUTHERN UNION COMPANY CAUTIONS THAT ACTUAL RESULTS AND DEVELOPMENTS MAY DIFFER
MATERIALLY FROM SUCH PROJECTIONS OR EXPECTATIONS.
IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THE FORWARD-LOOKING PROJECTIONS OR EXPECTATIONS. THESE FACTORS INCLUDE, BUT ARE
NOT LIMITED TO: CUSTOMER GROWTH; GAS THROUGHPUT VOLUMES AND AVAILABLE SOURCES OF
NATURAL GAS; ABNORMAL WEATHER CONDITIONS IN OUR SERVICE TERRITORIES; NEW
LEGISLATION AND GOVERNMENT REGULATIONS AFFECTING OR INVOLVING US; OUR ABILITY TO
COMPLY WITH OR TO CHALLENGE SUCCESSFULLY EXISTING OR NEW ENVIRONMENTAL
REGULATIONS; THE OUTCOME OF PENDING AND FUTURE LITIGATION; THE IMPACT OF
RELATIONS WITH LABOR UNIONS OF BARGAINING- UNIT UNION EMPLOYEES; THE IMPACT OF
FUTURE RATE CASES OR REGULATORY RULINGS; OUR ABILITY TO CONTROL COSTS
SUCCESSFULLY AND ACHIEVE OPERATING EFFICIENCIES, INCLUDING THE PURCHASE AND
IMPLEMENTATION OF NEW TECHNOLOGIES FOR ACHIEVING SUCH EFFICIENCIES; THE NATURE
AND IMPACT OF ANY EXTRAORDINARY TRANSACTIONS, SUCH AS ANY ACQUISITION OR
DIVESTITURE OF A BUSINESS UNIT OR ANY ASSETS; THE ECONOMIC CLIMATE AND GROWTH IN
OUR INDUSTRY AND SERVICE TERRITORIES AND COMPETITIVE CONDITIONS OF ENERGY
MARKETS IN GENERAL INFLATIONARY TRENDS; CHANGES IN GAS OR OTHER ENERGY MARKET
COMMODITY PRICES AND INTEREST RATES; THE CURRENT MARKET CONDITIONS CAUSING MORE
CUSTOMER CONTRACTS TO BE OF SHORTER DURATION, WHICH MAY INCREASE REVENUE
VOLATILITY; EXPOSURE TO CUSTOMER CONCENTRATION 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; OUR OR ANY OF
OUR AFFILIATES' DEBT SECURITIES RATINGS; FACTORS AFFECTION OPERATIONS SUCH AS
MAINTENANCE OR REPAIRS, ENVIRONMENTAL INCIDENTS OR GAS PIPELINE SYSTEM
CONSTRAINTS; THE POSSIBILITY OF WAR OR TERRORIST ATTACKS; AND OTHER RISKS AND
UNFORESEEN EVENTS.
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