Comments of the Gas Processors Association Natural Gas Quality & Interchangeability Docket No. PL04-3 May 17, 2005 Technical Conference Joel Moxley, Sr. Vice President Enterprise Products Operating L.P.

2 GPA & the “Midstream” Energy Industry Upstream Petrochemicals Refining Propane Retailing NGL Transportation NGL Storage NGL Fractionation Gathering Exploration & Production Processing & Treating Consumers Gas Retailing Gas Distribution Power Distribution Power Retailing Power Generation Midstream Transportation Gas Storage Gas Transportation What is the GPA? – Trade organization of 110 member companies – Members produce over 90% of U.S. NGLs – Strong history in technical, safety, and environmental issues

3 NGC “Plus” Findings The GPA participated in and supports the findings of NGC “Plus” found in White Papers on Liquid Hydrocarbon Drop Out and Gas Interchangeability. The GPA is the only organization solely representing gas processing in the midstream energy segment. UpstreamMidstreamTransportation Consumers NGSAGPAINGAAAGA IPAANAESBAPGA Intl. LNGEEI NAESBEPSA PGC Other: Univ. of HoustonGAMA NAESB

4 GPA Recommendations  Hydrocarbon drop-out should be controlled using cricondentherm HDP standards  CHDP standards should be uniform in specific geographic regions in the 10-40°F range  Determination of CHDP should be done using extended gas analyses (C9+) combined with equation of state calculations  Long term, CHDP results should be verified through automated dewscope equipment  Waivers of CHDP standards should be short term and transparent to all parties

5 Processing Clarifications  Gas processing isn’t always profitable – Gas quality variations make economic differences – NGL and gas market locations are significant – Operating costs of processing are material  Operation of processing plants is subject to physical and contractual limits  Idle processing capacity isn’t always useable due to gas availability  Processing plants won’t recover more NGLs than necessary to meet CHDP standards unless economics dictate  Plant residue gas must meet the strictest common denominator of quality specifications

6 Gulf Coast Processing ($/MMBtu) NGL Value NYMEX Natural Gas 2001 Nat Gas $4.26 NGL $ Nat Gas $3.21 NGL $ Nat Gas $5.39 NGL $5.10 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $ Sustained period of marginal processing economics

7 Parting Thoughts  GPA members operate the facilities to insure sufficient amounts of NGLs are extracted to meet CHDP standards  Improved economics in 2004 and 2005 have not altered inherent volatility of processing  CHDP standards should be clearly defined in next 60 days so all parties can make necessary operational and economic decisions; FERC should continue to review standards as more data is known  With clear and consistent CHDP standards and practices, GPA members will continue to play a vital role in the US energy value chain