FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                For the quarterly period ended September 30, 2000

                                       OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                For the transition period from _______ to _______


Commission file number: 333-93239-01

                       Enterprise Products Operating L.P.
             (Exact name of Registrant as specified in its charter)

          Delaware                                            76-0568220
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

                              2727 North Loop West
                                 Houston, Texas
                                   77008-1037
               (Address of principal executive offices) (Zip code)

                                 (713) 880-6500
               (Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                 Yes _X_ No ___

No  common  equity  securities  of  Enterprise   Products  Operating  L.P.  (the
"Company")  are held by  non-affiliates  of the  Company.  The  Company is owned
98.9899% by its Parent and Limited Partner, Enterprise Products Partners L.P. (a
publicly-traded  master  limited  partnership  under  New  York  Stock  Exchange
("NYSE")  symbol  "EPD" (SEC File No.  1-14323)),  and  1.0101%  by its  General
Partner, Enterprise Products GP, LLC.
<PAGE>

               Enterprise Products Operating L.P. and Subsidiaries

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                  No.

Part I.  Financial Information

Item 1.  Consolidated Financial Statements

Enterprise Products Operating L.P. Unaudited Consolidated Financial Statements:
<S>                                                                                                 <C>
         Consolidated Balance Sheets,  September 30, 2000 and December 31, 1999                     1

         Statements of Consolidated Operations
                  for the Three and Nine Months ended September 30, 2000 and 1999                   2

         Statements of Consolidated Cash Flows
                  for the Nine Months ended September 30, 2000 and 1999                             3

         Notes to Unaudited Consolidated Financial Statements                                       4

Item 2.  Management's Discussion and Analysis of Financial Condition and

         Results of Operations                                                                      15

Item 3.   Quantitative and Qualitative Disclosures about Market Risk                                29

Part II.  Other Information

Item 6.   Exhibits and Reports on Form 8-K                                                          32

         Signature Page
</TABLE>

<PAGE>

                         PART 1. FINANCIAL INFORMATION.
                   Item 1. CONSOLIDATED FINANCIAL STATEMENTS.
                       Enterprise Products Operating L.P.
                           Consolidated Balance Sheets
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                                           September 30,
                                                                                               2000            December 31,
                                        ASSETS                                              (Unaudited)            1999
                                                                                        ----------------------------------------
Current Assets
<S>                                                                                             <C>                 <C>
     Cash and cash equivalents                                                                  $   39,952          $    5,159
     Accounts receivable - trade, net of allowance for doubtful accounts of
        $12,053 at September 30, 2000 and $15,871 at December 31, 1999                             302,766             262,348
     Accounts receivable - affiliates                                                               36,108              53,906
     Inventories                                                                                   138,039              39,907
     Current maturities of participation in notes receivable from
        unconsolidated affiliates                                                                        -               6,519
     Prepaid and other current assets                                                               13,162              14,459
                                                                                        ----------------------------------------
                Total current assets                                                               530,027             382,298
Property, Plant and Equipment, Net                                                                 941,836             767,069
Investments in and Advances to Unconsolidated Affiliates                                           280,206             280,606
Intangible assets, net of accumulated amortization of $4,186 at
     September 30, 2000 and $1,345 at December 31, 1999                                             88,577              61,619
Other Assets                                                                                         4,457               1,120
                                                                                        ----------------------------------------
                Total                                                                           $1,845,103          $1,492,712
                                                                                        ========================================

                           LIABILITIES AND PARTNERS' EQUITY

Current Liabilities
     Current maturities of long-term debt                                                       $   50,000          $  129,000
     Accounts payable - trade                                                                      107,356              69,294
     Accounts payable - affiliate                                                                   34,035              64,780
     Accrued gas payables                                                                          278,651             233,360
     Accrued expenses                                                                               10,727              16,148
     Other current liabilities                                                                      30,929              18,176
                                                                                        ----------------------------------------
                Total current liabilities                                                          511,698             530,758
Long-Term Debt                                                                                     404,000             166,000
Other Long-Term liabilities                                                                          7,094                 296
Minority Interest                                                                                    1,120               1,032
Commitments and Contingencies
Partners' Equity
     Limited Partner                                                                               916,565             791,279
     General Partner                                                                                 9,353               8,074
     Parent's Units acquired by Trust                                                               (4,727)             (4,727)
                                                                                        ----------------------------------------
                Total Partners' Equity                                                             921,191             794,626
                                                                                        ----------------------------------------
                Total                                                                           $1,845,103          $1,492,712
                                                                                        ========================================
</TABLE>

            See Notes to Unaudited Consolidated Financial Statements

                                       1
<PAGE>

                       Enterprise Products Operating L.P.
                      Statements of Consolidated Operations
                                   (Unaudited)
                 (Amounts in thousands, except per Unit amounts)
<TABLE>
<CAPTION>
                                                                    Three Months                          Nine Months
                                                                 Ended September 30,                  Ended September 30,

                                                                2000             1999                2000             1999
                                                          ----------------------------------   ----------------------------------
REVENUES
<S>                                                             <C>              <C>                <C>               <C>
Revenues from consolidated operations                           $  717,113       $  441,880         $ 2,056,307       $  763,793
Equity income in unconsolidated affiliates                           4,750            3,148              23,290            7,591
                                                          ----------------------------------   ----------------------------------
         Total                                                     721,863          445,028           2,079,597          771,384
                                                          ----------------------------------   ----------------------------------
COST AND EXPENSES
Operating costs and expenses                                       659,021          401,758           1,878,233          688,977
Selling, general and administrative                                  6,978            3,200              20,020            9,200
                                                          ----------------------------------   ----------------------------------
         Total                                                     665,999          404,958           1,898,253          698,177
                                                          ----------------------------------   ----------------------------------
OPERATING INCOME                                                    55,864           40,070             181,344           73,207
OTHER INCOME (EXPENSE)
Interest expense                                                    (7,486)          (4,515)            (23,330)          (8,907)
Interest income (expense) from unconsolidated affiliates              (122)             407                  80            1,096
Dividend income from unconsolidated affiliates                       2,241                -               6,236                -
Interest income - other                                                458              682               3,431            1,114
Other, net                                                             (71)              72                (496)             117
                                                          ----------------------------------   ----------------------------------
          Other income  (expense)                                   (4,980)          (3,354)            (14,079)          (6,580)
                                                          ----------------------------------   ----------------------------------
INCOME BEFORE MINORITY INTEREST                                     50,884           36,716             167,265           66,627
MINORITY INTEREST                                                      (18)             (21)                (88)             (72)
                                                          ----------------------------------   ----------------------------------
NET INCOME                                                      $   50,866       $   36,695         $   167,177       $   66,555
                                                          ==================================   ==================================
</TABLE>

            See Notes to Unaudited Consolidated Financial Statements



                                       2
<PAGE>

                        Enterprise Products Operating L.P
                      Statements of Consolidated Cash Flows
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                                   Nine Months Ended
                                                                                     September 30,

                                                                                2000               1999
                                                                          -------------------------------------
OPERATING ACTIVITIES
<S>                                                                              <C>                <C>
Net income                                                                       $  167,177         $   66,555
Adjustments to reconcile net income to cash flows provided by
      (used for) operating activities:
      Depreciation and amortization                                                  27,952             17,280
      Equity in income of unconsolidated affiliates                                 (23,290)            (7,591)
      Distributions received from unconsolidated affiliates                          25,997              4,607
      Leases paid by EPCO                                                             7,984              7,998
      Minority interest                                                                  88                 71
      Loss on sale of assets                                                          2,276                122
      Net effect of changes in operating accounts                                   (32,130)           (34,246)
                                                                          -------------------------------------
Operating activities cash flows                                                     176,054             54,796
                                                                          -------------------------------------
INVESTING ACTIVITIES
Capital expenditures                                                               (200,157)           (10,603)
Proceeds from sale of assets                                                             85                  8
Business acquisitions, net of cash acquired                                               -           (208,095)
Collection of notes receivable from unconsolidated affiliates                         6,519             16,719
Investments in and advances to unconsolidated affiliates                             (2,307)           (58,460)
                                                                          -------------------------------------
Investing activities cash flows                                                    (195,860)          (260,431)
                                                                           -------------------------------------
FINANCING ACTIVITIES
Long-term debt borrowings                                                           514,000            350,000
Long-term debt repayments                                                          (355,000)           (59,923)
Cash contributions from minority interest                                                 -                  7
Parent's Units acquired by consolidated Trust                                             -             (4,727)
Cash distributions to minority interest                                                   -                (99)
Cash distributions to partners                                                     (104,401)           (82,150)
                                                                          -------------------------------------
Financing activities cash flows                                                      54,599            203,108
                                                                          -------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS                                              34,793             (2,527)
CASH AND CASH EQUIVALENTS, JANUARY 1                                                  5,159             24,103
                                                                          -------------------------------------
CASH AND CASH EQUIVALENTS, SEPTEMBER 30                                          $   39,952         $   21,576
                                                                          =====================================
</TABLE>
            See Notes to Unaudited Consolidated Financial Statements

                                       3
<PAGE>

                       Enterprise Products Operating L.P.

                   Notes to Consolidated Financial Statements

                                   (Unaudited)

1.   GENERAL

In the opinion of  Enterprise  Products  Operating  L.P.  (the  "Company"),  the
accompanying unaudited consolidated financial statements include all adjustments
consisting of normal recurring accruals necessary for a fair presentation of the
Company's consolidated financial position as of September 30, 2000, consolidated
results of operations  for the three and nine month periods ended  September 30,
2000 and 1999 and  consolidated  cash  flows for the nine  month  periods  ended
September 30, 2000 and 1999.  Although the Company  believes the  disclosures in
these financial  statements are adequate to make the  information  presented not
misleading,  certain information and footnote  disclosures  normally included in
annual  financial  statements  prepared in accordance  with  generally  accepted
accounting  principles have been condensed or omitted  pursuant to the rules and
regulations of the Securities and Exchange Commission. These unaudited financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's  Special  Financial Report pursuant to Section
15(d)(2) on Form 10-K (File No.  333-93239-01)  for the year ended  December 31,
1999.  In  addition,  these  unaudited  financial  statements  should be read in
conjunction  with  the  Annual  Report  on Form  10-K of the  Company's  Parent,
Enterprise Products Partners L.P. (File No. 1-14323) for the year ended December
31, 1999.

The results of operations  for the three and nine month periods ended  September
30, 2000 are not  necessarily  indicative  of the results to be expected for the
full year.

Certain reclassifications have been made to prior years' financial statements to
conform to the presentation of the current period financial statements.

Dollar amounts presented in the tabulations within the notes to the consolidated
financial  statements  are stated in  thousands  of  dollars,  unless  otherwise
indicated.

2.   INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

At September  30, 2000,  the  Company's  significant  unconsolidated  affiliates
accounted for by the equity method included the following:

Belvieu  Environmental  Fuels ("BEF") - a 33.33%  economic  interest in a Methyl
Tertiary Butyl Ether ("MTBE") production facility located in southeast Texas.

Baton Rouge  Fractionators LLC ("BRF") - an approximate 32.25% economic interest
in a natural gas liquid ("NGL")  fractionation  facility located in southeastern
Louisiana.

Baton Rouge Propylene Concentrator,  LLC ("BRPC") - a 30.0% economic interest in
a propylene  concentration  unit located in  southeastern  Louisiana that became
operational in July 2000.

EPIK Terminalling L.P. and EPIK Gas Liquids, LLC (collectively,  "EPIK") - a 50%
aggregate  economic  interest  in a  refrigerated  NGL marine  terminal  loading
facility located in southeast Texas.

Wilprise  Pipeline  Company,  LLC ("Wilprise") - a 37.35% economic interest in a
NGL pipeline system located in southeastern Louisiana.

Tri-States  NGL  Pipeline LLC  ("Tri-States")  - an  aggregate  33.33%  economic
interest  in a NGL  pipeline  system  located  in  Louisiana,  Mississippi,  and
Alabama.

Belle Rose NGL Pipeline LLC ("Belle Rose") - a 41.7% economic  interest in a NGL
pipeline  system  located in south  Louisiana.



                                       4
<PAGE>

K/D/S Promix LLC ("Promix") - a 33.33% economic  interest in a NGL fractionation
facility  and  related  storage  facilities  located  in  south  Louisiana.  The
Company's  investment includes excess cost over the underlying equity in the net
assets of Promix of $7.5 million at September 30, 2000 which is being  amortized
using the straight-line method over a period of 20 years. For the three and nine
months ended  September  30, 2000,  the Company  recorded  amortization  expense
associated with this excess cost of $0.1 million and $0.3 million, respectively,
which is reflected in the equity earnings from Promix.  For the third quarter of
1999, such amortization was $0.2 million.

The Company's  investments  in and advances to  unconsolidated  affiliates  also
includes  Venice Energy  Services  Company,  LLC  ("VESCO")  and Dixie  Pipeline
Company ("Dixie"). The VESCO investment consists of a 13.1% economic interest in
a LLC owning a natural gas processing plant, fractionation facilities,  storage,
and gas  gathering  pipelines in  Louisiana.  At September  30, 2000,  the Dixie
investment  consisted of an 11.5% interest in a corporation  owning a 1,301-mile
propane pipeline and associated facilities extending from Mont Belvieu, Texas to
North  Carolina.  On October 6, 2000, the Company  purchased an additional  8.4%
economic  interest in Dixie from Conoco Pipe Line Company for $19.4 million (see
Note 11). The Company's ownership interest in Dixie now stands at 19.9%. Through
September 30, 2000, these investments were accounted for using the cost method.

During the third quarter of 1999, the Company acquired the remaining interest in
Mont  Belvieu  Associates,  51%,  ("MBA")  and Entell NGL  Services,  LLC,  50%,
("Entell").  Accordingly,  after the acquisition of the remaining interests, MBA
terminated  and Entell  became a wholly owned  subsidiary  of the Company and is
included as a consolidated entity from that point forward.

The  following  table  shows  investments  in  and  advances  to  unconsolidated
affiliates at:

                                        September 30,       December 31,
                                            2000                1999
                                     ---------------------------------------
Accounted for on equity basis:
    BEF                                      $   61,989          $   63,004
    Promix                                       49,981              50,496
    BRF                                          29,673              36,789
    Tri-States                                   27,697              28,887
    EPIK                                         17,662              15,258
    Belle Rose                                   11,655              12,064
    BRPC                                         19,344              11,825
    Wilprise                                      9,160               9,283
Accounted for  on cost basis:
    VESCO                                        33,000              33,000
    Dixie                                        20,045              20,000
                                     ---------------------------------------
Total                                       $   280,206         $   280,606
                                     =======================================



                                       5
<PAGE>

The following table shows equity in income (loss) of  unconsolidated  affiliates
for the three and nine month periods ended September 30, 2000 and 1999:

<TABLE>
<CAPTION>
                                     For Three Months Ended                  For Nine Months Ended
                                         September 30,                           September 30,
                                      2000              1999                 2000               1999
                          -------------------------------------   -------------------------------------
<S>                                <C>              <C>                 <C>                 <C>
BEF                                $  2,190         $   2,519           $   13,002          $   4,756
MBA                                       -                72                    -              1,256
BRF                                     434              (258)               1,171              (544)
BRPC                                    134                 4                  115                  4
EPIK                                   (124)               59                1,846                236
Wilprise                                135              (130)                 297              (130)
Tri-States                              694               472                2,215                472
Promix                                1,170               (93)               4,378               (93)
Belle Rose                              117               245                  266                245
Other                                     -               258                    -              1,389
                          -------------------------------------   -------------------------------------
Total                             $   4,750         $   3,148           $   23,290          $   7,591
                          =====================================   =====================================
</TABLE>

The following table presents  summarized  income  statement  information for the
unconsolidated subsidiaries accounted for by the equity method:

<TABLE>
<CAPTION>
                              For the Three Months ended                            For the Nine Months ended
                                  September 30, 2000                                    September 30, 2000
                  ---------------------------------------------------   ---------------------------------------------------
                                      Operating           Net                               Operating           Net
                      Revenues          Income           Income             Revenues          Income           Income
                  ---------------------------------------------------   ---------------------------------------------------
<S>                      <C>              <C>              <C>                 <C>              <C>              <C>
BEF                      $  77,330        $   6,201        $   6,570           $ 214,761        $  38,575        $  39,007
EPIK                         1,856             (290)            (249)             14,789            3,561            3,699
BRF                          4,775            1,282            1,347              13,989            3,504            3,631
BRPC                         2,333              398              477               2,333              211              383
Wilprise                       727              398              406               2,149              867              891
Tri-States                   3,430            2,059            2,088              10,677            6,530            6,650
Promix                      12,242            3,959            4,019              36,968           14,057           14,274
Belle Rose                     536              279              279               1,802              645              645
                  ---------------------------------------------------   ---------------------------------------------------
Total                    $ 103,229        $  14,286        $  14,937           $ 297,468        $  67,950        $  69,180
                  ===================================================   ===================================================

                              For the Three Months ended                            For the Nine Months ended
                                  September 30, 1999                                    September 30, 1999
                  ---------------------------------------------------   ---------------------------------------------------
                                      Operating           Net                               Operating           Net
                      Revenues          Income           Income             Revenues          Income           Income
                  ---------------------------------------------------   ---------------------------------------------------
BEF                      $  47,885        $   7,067        $   7,556           $ 128,516        $  19,476        $  14,269
EPIK                         2,520              253              264               5,954              733              751
BRF                          2,317             (512)            (827)              2,317             (579)          (1,741)
BRPC                             -                -               13                   -                -               13
Wilprise                       291            (399)             (390)                291             (399)            (390)
Tri-States                   4,611            1,377            1,417               4,611            1,377            1,417
Promix                       7,990            1,715              354               7,990            1,715              354
Belle Rose                     639              566              566               1,138              551              590
MBA                              -                -              147              12,329            2,731            2,563
Other                          910              516              516               4,842            2,778            2,778
                  ---------------------------------------------------   ---------------------------------------------------
Total                    $  67,163        $  10,583        $   9,616           $ 167,988        $  28,383        $  20,604
                  ===================================================   ===================================================
</TABLE>

                                       6
<PAGE>

BEF

BEF is a partnership  that owns the MTBE production  facility located within the
Company's Mont Belvieu  complex.  The production of MTBE is driven by oxygenated
fuels  programs  enacted under the federal Clean Air Act  Amendments of 1990 and
other legislation. Any changes to these programs that enable localities to elect
not to participate in of these programs,  lessen the requirements for oxygenates
or favor the use of  non-isobutane  based oxygenated fuels reduce the demand for
MTBE and could have an adverse effect on the Company's results of operations.

In recent years,  MTBE has been detected in water supplies.  The major source of
the ground  water  contamination  appears to be leaks from  underground  storage
tanks.  Although  these  detections  have been limited and the great majority of
these  detections  have been well below levels of public health  concern,  there
have been actions calling for the phase-out of MTBE in motor gasoline in various
federal and state governmental agencies.

In light of these  developments,  the Company is formulating a contingency  plan
for use of the BEF  facility  if MTBE were  banned or  significantly  curtailed.
Management  is exploring a possible  conversion  of the BEF  facility  from MTBE
production  to  alkylate  production.  At present  the  forecasted  cost of this
conversion would be in the $20 million to $25 million range,  with the Company's
share being $6.7 million to $8.3 million.

3.  ACQUISITIONS

Effective  August 1, 1999, the Company  acquired Tejas Natural Gas Liquids,  LLC
("TNGL")  from a subsidiary  of Tejas  Energy,  LLC, now Coral  Energy,  LLC, an
affiliate  of Shell  Oil  Company  ("Shell")  for $166  million  in cash and the
issuance of 14.5 million non-distribution bearing,  convertible Special Units of
the Limited Partner, Enterprise Products Partners L.P.. All references hereafter
to "Shell", unless the context indicates otherwise,  shall refer collectively to
Shell Oil Company, its subsidiaries and affiliates.  TNGL engages in natural gas
processing  and NGL  fractionation,  transportation,  storage and  marketing  in
Louisiana  and  Mississippi.   TNGL's  assets  include  a  20-year  natural  gas
processing  agreement  with Shell  ("Shell  Processing  Agreement")  and varying
interests  in eleven  natural  gas  processing  plants,  four NGL  fractionation
facilities;  four  NGL  storage  facilities  and  approximately  1,500  miles in
pipelines.

In  addition  to  the   Special   Units,   Shell  may  be  granted  6.0  million
non-distribution  bearing,  convertible Contingency Units of the Limited Partner
provided that certain  performance  criteria are met in calendar  years 2000 and
2001. Under the terms of an agreement with Shell, the Limited Partner will issue
3.0 million  Contingency Units in 2000 and an additional 3.0 million Contingency
Units in 2001 provided the performance tests are successfully completed. On June
28, 2000, Shell met the performance criteria outlined for calendar year 2000 and
in accordance with its contingent Unit agreement with Shell, the Limited Partner
issued the 3.0 million  Contingency  Units (deemed "Special Units" once they are
issued) on August 1, 2000.

The  value of these new  Special  Units is $55.2  million  using  present  value
techniques. In August 2000, the TNGL acquisition purchase price and the value of
the Shell Processing  Agreement were increased by the $55.2 million value of the
Units. If the remainder of the Contingency  Units are issued in 2001 (or at such
later date as agreed to by the  parties),  the  purchase  price and value of the
Shell Processing Agreement will be adjusted accordingly.  The value of the Shell
Processing  Agreement  (classified as an Intangible  Asset on the balance sheet)
was $80.2  million at September 30, 2000 and $54.0 million at December 31, 1999.
The value has been  adjusted for the new Special Units issued to Shell (as noted
previously),   finalization  of  purchase  accounting  adjustments  and  related
amortization.

Effective July 1, 1999, the Company  acquired  Kinder Morgan  Operating LP "A"'s
25% indirect ownership interest and Enterprise  Products Company's ("EPCO") 0.5%
indirect  ownership  interest  in a  210,000  barrel  per day NGL  fractionation
facility located in Mont Belvieu,  Texas for  approximately  $42 million in cash
and the assumption of approximately $4 million in debt.

Both  acquisitions  were accounted for using the purchase  method of accounting,
and  accordingly,  the purchase  price of each has been  allocated to the assets
purchased and  liabilities  assumed based on their  estimated  fair value at the
effective date of each transaction.



                                       7
<PAGE>

Pro Forma effect of Acquisitions

The following table presents  unaudited pro forma  information for the three and
nine months ended  September 30, 1999 as if the  acquisition  of TNGL from Shell
and the Mont Belvieu NGL fractionation  facility from Kinder Morgan and EPCO had
been made as of January 1, 1999:

                                     Three Months         Nine Months
                                        Ended                Ended
                                    September 30,        September 30,
                                         1999                 1999
                                  -------------------  -------------------
Revenues                              $  506,944          $ 1,151,444
                                  ===================  ===================
Net income                            $   41,067          $    81,607
                                  ===================  ===================
Allocation of net income to
      Limited partners                $   40,652          $    80,783
                                  ===================  ===================
      General Partner                 $      415          $       824
                                  ===================  ===================


4.   LONG-TERM DEBT

General.  Long-term  debt at September 30, 2000 was comprised of $350 million in
5-year  public  Senior Notes (the "$350  Million  Senior  Notes")  issued by the
Company and a 10-year $54 million loan agreement with the  Mississippi  Business
Finance  Corporation  ("MBFC" and the "$54  Million  MBFC Loan") and $50 million
outstanding  under the $350  Million Bank Credit  Facility.  The issuance of the
$350 Million  Senior Notes  represented  a partial  takedown of the $800 million
universal shelf registration (the "Registration  Statement") that was filed with
the Securities  and Exchange  Commission in December 1999. The proceeds from the
$350 Million  Senior Notes and the $54 Million MBFC Loan were used to extinguish
all  outstanding  balances owed under the $200 Million Bank Credit  Facility and
the $350 Million Bank Credit Facility at the time of the offerings.

The following table summarizes long-term debt at:

                                            September 30,       December 31,
                                                2000                1999
                                           -------------------------------------
Borrowings under:
     $200 Million Bank Credit Facility                              $   129,000
     $350 Million Bank Credit Facility            $   50,000            166,000
     $350 Million Senior Notes                       350,000
     $54 Million MBFC Loan                            54,000

                                           -------------------------------------
            Total                                    454,000            295,000
Less current maturities of long-term debt             50,000            129,000
                                           -------------------------------------
            Long-term debt                       $   404,000        $   166,000
                                           =====================================

At September 30, 2000, the Company had a total of $40 million of standby letters
of credit available of which  approximately $13.3 million were outstanding under
letter of credit agreements with the banks.

$200 Million Bank Credit Facility. In July 1998, the Company entered into a $200
million  bank  credit  facility  that  included a $50  million  working  capital
facility and a $150 million  revolving credit  facility.  On March 15, 2000, the
Company used $169 million of the proceeds  from the issuance of the $350 Million
Senior Notes to retire this credit  facility in  accordance  with its  agreement
with the banks.



                                       8
<PAGE>

$350 Million Bank Credit Facility. In July 1999, the Company entered into a $350
Million  Bank  Credit  Facility  that  includes a $50  million  working  capital
facility  and a  $300  million  revolving  credit  facility.  The  $300  million
revolving  credit  facility  includes a sublimit  of $40  million for letters of
credit.  Borrowings  under  the $350  Million  Bank  Credit  Facility  will bear
interest  at  either  the  bank's  prime  rate or the  Eurodollar  rate plus the
applicable  margin as defined in the facility.  The Company elects the basis for
the interest rate at the time of each borrowing.

This  facility  is  scheduled  to expire in July 2001 and all  amounts  borrowed
thereunder  shall be due and  payable  at that  time.  There  must be no  amount
outstanding  under the working capital facility for at least 15 consecutive days
during each fiscal  year.  In March 2000,  the Company  used $179 million of the
proceeds from the issuance of the $350 Million Senior Notes and $47 million from
the $54  Million  MBFC Loan to payoff the  outstanding  balance  on this  credit
facility.  Due to  borrowings in the third  quarter for  investment  and working
capital  purposes,  $50 million was outstanding under this facility at September
30, 2000.

The  credit  agreement  relating  to this  facility  contains a  prohibition  on
distributions  to or purchases  of Units of the Limited  Partner if any event of
default is continuing.  In addition,  this bank credit facility contains various
affirmative and negative covenants  applicable to the ability of the Company to,
among  other  things,  (i) incur  certain  additional  indebtedness,  (ii) grant
certain  liens,  (iii) sell assets in excess of certain  limitations,  (iv) make
investments,  (v) engage in  transactions  with affiliates and (vi) enter into a
merger,  consolidation  or  sale  of  assets.  The  credit  agreement  generally
prohibits  redemptions  of  Units  of  the  Limited  Partner  except  for  those
transactions  related to the 1,000,000 Unit Buy-back  Program  announced in July
2000.  In August 2000,  the lenders and Company  executed a waiver  allowing for
this program.  The bank credit  facility  requires that the Company  satisfy the
following  financial  covenants at the end of each fiscal quarter:  (i) maintain
Consolidated  Tangible Net Worth (as defined in the bank credit  facility) of at
least $250  million,  (ii)  maintain  a ratio of EBITDA (as  defined in the bank
credit facility) to Consolidated Interest Expense (as defined in the bank credit
facility)  for the  previous  12-month  period  of at least 3.5 to 1.0 and (iii)
maintain a ratio of Total  Indebtedness (as defined in the bank credit facility)
to EBITDA of no more than 3.0 to 1.0. The Company was in  compliance  with these
restrictive covenants at September 30, 2000.

$350 Million  Senior Notes.  On March 13, 2000,  the Company  completed a public
offering of $350 million in principal  amount of 8.25%  fixed-rate  Senior Notes
due March 15,  2005 at a price to the public of 99.948%  per  Senior  Note.  The
Company received  proceeds,  net of underwriting  discounts and commissions,  of
approximately  $347.7  million.  The  proceeds  were used to pay the entire $169
million  outstanding  principal balance on the $200 Million Bank Credit Facility
and $179 million of the $226 million  outstanding  principal balance on the $350
Million Bank Credit Facility.

The $350 Million  Senior Notes are subject to a make-whole  redemption  right by
the  Company.  The notes are an  unsecured  obligation  of the  Company and rank
equally with its existing and future unsecured and  unsubordinated  indebtedness
and senior to any future subordinated indebtedness.  The notes are guaranteed by
the Limited Partner through an unsecured and  unsubordinated  guarantee and were
issued  under an  indenture  containing  certain  restrictive  covenants.  These
covenants  restrict  the ability of the Company  and the Limited  Partner,  with
certain  exceptions,  to incur  debt  secured  by liens  and  engage in sale and
leaseback  transactions.  The Company and the Limited Partner were in compliance
with the restrictive covenants at September 30, 2000.

Settlement  was  completed on March 15,  2000.  The issuance of the $350 Million
Senior  Notes was a takedown  under the  Company's  and Limited  Partner's  $800
million Registration  Statement;  therefore,  the amount of securities available
under the Registration Statement has been reduced to $450 million.

$54 Million  MBFC Loan.  On March 27, 2000,  the Company  executed a $54 million
loan  agreement  with the MBFC which was funded with  proceeds  from the sale of
Taxable  Industrial Revenue Bonds ("Bonds") by the MBFC. The Bonds issued by the
MBFC  are  10-year  bonds  with a  maturity  date of  March  1,  2010 and bear a
fixed-rate interest coupon of 8.70%. The Company received proceeds from the sale
of the Bonds, net of underwriting  discounts and  commissions,  of approximately
$53.6  million.  The  proceeds  were  used  to pay  the  remaining  $47  million
outstanding  principal  balance on the $350 Million Bank Credit Facility and for
working capital and other general partnership purposes. In general, the proceeds
of the Bonds were used to reimburse the Company for costs  incurred in acquiring
and constructing the Pascagoula, Mississippi natural gas processing plant.



                                       9
<PAGE>

The Bonds were issued at par and are subject to a make-whole redemption right by
the  Company.  The  Bonds are  guaranteed  by the  Limited  Partner  through  an
unsecured and  unsubordinated  guarantee.  The loan agreement  contains  certain
covenants  including   maintaining   appropriate  levels  of  insurance  on  the
Pascagoula natural gas processing  facility and restrictions  regarding mergers.
The Company was in compliance  with the  restrictive  covenants at September 30,
2000.

5.       CAPITAL STRUCTURE AND DISTRIBUTIONS

The Limited Partner owns 98.9899% of the Company with the General Partner owning
the remaining 1.0101%. For purposes of maintaining partner capital accounts, the
partnership  agreement generally specifies that items of income or loss shall be
allocated  among the  partners in  accordance  with their  respective  ownership
percentages.  Net losses are first  allocated to the partners in accordance with
their respective percentages to the extent that the allocations do not cause the
Limited Partner to have a deficit balance in its capital  account.  Any net loss
not allocated to the Limited Partner is allocated to the General Partner. Normal
allocations  of net income  according  to  percentage  interests  are done only,
however,  after giving effect to any priority income  allocations to the General
Partner in an amount equal to any aggregate  net losses  incurred by the General
Partner for all previous  years.  For the three and nine months ended  September
30, 2000 and year ended  December 31, 1999, the allocation of earnings was based
solely on the  respective  ownership  interests of the partners with no priority
income allocations being necessary.

The  partnership  agreement  requires  the  Company  to  distribute  100% of the
"Available  Cash" (as defined in the  partnership  agreements)  to the  partners
within 45 days  following  the end of each calendar  quarter in accordance  with
their respective ownership  interests.  Available Cash consists generally of all
cash receipts of the Company, less all of its cash disbursements, net of changes
in reserves.  The  Company's  cash  distributions  to its  partners  were $104.4
million and $82.2 million for the nine months ended September 30, 2000 and 1999,
respectively.

Limited  Partner Units Acquired by Trust.  During the first quarter of 1999, the
Company  established  a  revocable  grantor  trust (the  "Trust") to fund future
liabilities of a long-term  incentive plan. At September 30, 2000, the Trust had
purchased a total of 267,200  Common  Units of the Limited  Partner  (the "Trust
Units") which are accounted for in a manner  similar to treasury stock under the
cost method of  accounting.  The Trust Units receive  dividends from the Limited
Partner.

6.   SUPPLEMENTAL CASH FLOW DISCLOSURE

The net effect of changes in operating assets and liabilities is as follows:

                                                      Nine Months Ended
                                                        September 30,

                                                    2000              1999
                                            ----------------------------------
(Increase) decrease in:
      Accounts receivable                       $  (17,194)       $  (48,448)
      Inventories                                  (66,270)          (64,992)
      Prepaid and other current assets               1,297            (4,647)
      Intangible assets                             (4,805)                -
      Other assets                                  (5,419)           (1,757)
Increase (decrease) in:
      Accounts payable                               7,109            43,944
      Accrued gas payable                           47,517            61,474
      Accrued expenses                              (6,721)            1,236
      Other current liabilities                     12,753           (21,595)
      Other liabilities                               (397)              539
                                            ----------------------------------
Net effect of changes in operating accounts     $  (32,130)       $  (34,246)
                                            ==================================



                                       10
<PAGE>

Capital  expenditures  for the first  nine  months of 2000 were  $200.2  million
compared to $10.6 million for the same period in 1999.  Capital  expenditures in
2000 included $99.6 million for the purchase of the Lou-Tex  Propylene  Pipeline
and related  assets,  $71.5  million in  construction  costs for the Lou-Tex NGL
Pipeline and $4.1 million in  construction  costs for the Neptune gas processing
facility.

The purchase of the Lou-Tex  Propylene  Pipeline and related  assets from Concha
Chemical Pipeline Company,  an affiliate of Shell, was completed on February 25,
2000.  The  effective  date of the  transaction  was March 1, 2000.  The Lou-Tex
Propylene  Pipeline is a 263-mile,  10" pipeline that transports  chemical grade
propylene from Sorrento, Louisiana to Mont Belvieu, Texas. Also acquired in this
transaction  was 27.5 miles of 6" ethane  pipeline  between  Sorrento and Norco,
Louisiana, and a 0.5 million barrel storage cavern at Sorrento, Louisiana.

7.   RECENTLY ISSUED ACCOUNTING STANDARDS

In December 1999, the  Securities and Exchange  Commission  ("SEC") issued Staff
Accounting   Bulletin  ("SAB")  No.  101  "  Revenue  Recognition  in  Financial
Statements."  SAB 101  summarizes  certain  of the  staff's  views  in  applying
generally  accepted  accounting  principles to revenue  recognition in financial
statements. On June 26, 2000, the SEC issued an amendment to SAB 101 effectively
delaying its  implementation  until the fourth quarter of fiscal years beginning
after December 15, 1999. The Company  believes that the adoption of SAB 101 will
not have a material effect on its results of operations.

In June 1999, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standard ("SFAS") No. 137,  "Accounting for Derivative
Instruments  and  Hedging  Activities-Deferral  of the  Effective  Date  of FASB
Statement No.  133-an  amendment of FASB  Statement  No. 133" which  effectively
delays the application of SFAS No. 133  "Accounting  for Derivative  Instruments
and Hedging  Activities"  for one year, to fiscal years beginning after June 15,
2000.  In June 2000,  the FASB  issued  SFAS No.  138,  "Accounting  for Certain
Derivative  Instruments  and Certain  Hedging  Activities - an amendment of FASB
Statement No. 133" which amends and supercedes various sections of SFAS No. 133.
Management  is  currently  studying  SFAS No. 133 and its  amendments  for their
possible impact on the consolidated  financial  statements when they are adopted
in January 2001.

8.   FINANCIAL INSTRUMENTS

The  Company  enters  into swaps and other  contracts  to hedge the price  risks
associated with inventories,  commitments and certain anticipated  transactions.
The Company does not currently hold or issue  financial  instruments for trading
purposes.  The swaps and other contracts are with  established  energy companies
and major  financial  institutions.  The  Company  believes  its credit  risk is
minimal  on these  transactions,  as the  counterparties  are  required  to meet
stringent credit standards. There is continuous day-to-day involvement by senior
management in the hedging decisions,  operating under resolutions adopted by the
board of directors of the General Partner.

Interest  Rate  Swaps.  The  Company's   interest  rate  exposure  results  from
variable-rate   borrowings  from  commercial  banks  and  fixed-rate  borrowings
pursuant to the $350 Million  Senior  Notes and the $54 Million  MBFC Loan.  The
company  manages its exposure to changes in interest  rates in its  consolidated
debt  portfolio by utilizing  interest  rate swaps.  An interest  rate swap,  in
general, requires one party to pay a fixed-rate on the notional amount while the
other party pays a floating-rate based on the notional amount.

In March 2000,  after the  issuance  of the $350  Million  Senior  Notes and the
execution of the $54 Million MBFC Loan, 100% of the Company's  consolidated debt
were fixed-rate  obligations.  To maintain a balance between  variable-rate  and
fixed-rate exposure, the Company entered into interest rate swap agreements with
a notional amount of $154 million by which the Company  receives  payments based
on a fixed-rate  and pays an amount based on a  floating-rate.  At September 30,
2000, the Company's  consolidated  debt portfolio  interest rate exposure was 55
percent  fixed and 45  percent  floating,  after  considering  the effect of the
interest rate swap agreements.  The notional amount does not represent  exposure
to credit loss. The Company monitors its positions and the credit ratings of its
counterparties.  Management believes the risk of incurring a credit related loss
is remote, and that if incurred, such losses would be immaterial.



                                       11
<PAGE>

The effect of these swaps  (none of which are  leveraged)  was to  decrease  the
Company's  interest  expense by $0.4  million and $0.9 million for the three and
nine months  ended  September  30,  2000,  respectively.  Following  is selected
information  on the Company's  portfolio of interest rate swaps at September 30,
2000:

Interest Rate Swap Portfolio at September 30, 2000 (1) :
(Dollars in millions)
                                              Early             Fixed /
        Notional                            Termination         Floating
        Amount       Period Covered           Date (2)          Rate (3)
--------------------------------------------------------------------------------

      $ 50.0 March 2000 - March 2005        March 2001         8.25% / 7.3100%
      $ 50.0 March 2000 - March 2005        March 2001         8.25% / 7.3150%
      $ 54.0 March 2000 - March 2010        March 2003         8.70% / 7.6575%

Notes:
(1)  All swaps  outstanding  at  September  30, 2000 were  entered  into for the
     purpose of  managing  the  Company's  exposure  to  fluctuations  in market
     interest rates.
(2)  In each case,  the  counterparty  has the option to terminate  the interest
     rate swap on the Early Termination Date
(3)  In each case, the Company is the floating-rate payor. The floating rate was
     the rate in effect as of September 30, 2000.

9.  SEGMENT INFORMATION

The Company has five reportable  operating  segments:  Fractionation,  Pipeline,
Processing,   Octane   Enhancement   and  Other.   Fractionation   includes  NGL
fractionation,  butane isomerization  (converting normal butane into high purity
isobutane) and polymer grade propylene fractionation services. Pipeline consists
of pipeline,  storage and import/export  terminal services.  Processing includes
the natural gas  processing  business and its related NGL  merchant  activities.
Octane  Enhancement  represents  the Company's  33.33%  ownership  interest in a
facility that produces  motor gasoline  additives to enhance  octane  (currently
producing  MTBE). The Other operating  segment  consists of fee-based  marketing
services and other plant support functions.

Operating  segments are components of a business about which separate  financial
information  is  available  that is evaluated  regularly by the chief  operating
decision  maker  in  deciding  how  to  allocate   resources  and  in  assessing
performance.  Generally, financial information is required to be reported on the
basis that it is used internally for evaluating segment performance and deciding
how to allocate resources to segments.

The  management of the Company  evaluates  segment  performance  on the basis of
gross  operating  margin.  Gross  operating  margin  reported  for each  segment
represents operating income before depreciation and amortization,  lease expense
obligations retained by EPCO, gains and losses on the sale of assets and general
and  administrative  expenses.  In addition,  segment gross operating  margin is
exclusive of interest expense,  interest income (from unconsolidated  affiliates
or others), dividend income from unconsolidated  affiliates,  minority interest,
extraordinary charges and other income and expense  transactions.  The Company's
equity  earnings from  unconsolidated  affiliates  are included in segment gross
operating margin.

Consolidated  property,  plant and equipment and  investments in and advances to
unconsolidated  affiliates  are  allocated  to each segment on the basis of each
asset's or investment's  principal  operations.  The principal  reconciling item
between consolidated property,  plant and equipment and segment property,  plant
and equipment is construction-in-progress. Segment property, plant and equipment
represents  those  facilities  and projects that  contribute to gross  operating
margin.  Since assets under construction do not generally  contribute to segment
gross operating  margin,  these assets are not included in the operating segment
totals until they are deemed operational.

Segment gross  operating  margin is inclusive of  intersegment  revenues.  These
revenues have been eliminated from the consolidated totals.



                                       12
<PAGE>

Information  by  operating  segment,   together  with   reconciliations  to  the
consolidated totals, is presented in the following table:

<TABLE>
<CAPTION>
                                                                Operating Segments                        Adjustments
                                         -----------------------------------------------------------------
                                                                                   Octane                     and      Consolidated
                                         Fractionation Pipelines    Processing  Enhancement     Other     Eliminations    Totals
                                         -------------------------------------------------------------------------------------------
Revenues from
   external customers
<S>                                        <C>          <C>          <C>           <C>           <C>        <C>          <C>
   Three months ended September 30, 2000   $  120,227   $   (1,864)   $ 605,875    $   2,191     $    793   $  (5,359)   $  721,863
   Three months ended September 30, 1999       56,278        6,059      387,218        2,519            -      (7,046)      445,028
   Nine months ended September 30, 2000       322,793       25,998    1,730,976       13,003        2,059     (15,232)    2,079,597
   Nine months ended September 30, 1999       174,427       14,160      610,729        4,756            -     (32,688)      771,384

Intersegment revenues
   Three months ended September 30, 2000       46,538       12,083      165,761            -           93    (224,475)            -
   Three months ended September 30, 1999       49,353        9,815       62,299            -          123    (121,590)            -
   Nine months ended September 30, 2000       129,266       40,108      447,646            -          282    (617,302)            -
   Nine months ended September 30, 1999        86,713       27,126       62,336                       327    (176,502)

Total revenues

   Three months ended September 30, 2000      166,765       10,219      771,636        2,191          886    (229,834)      721,863
   Three months ended September 30, 1999      105,631       15,874      449,517        2,519          123    (128,636)      445,028
   Nine months ended September 30, 2000       452,059       66,106    2,178,622       13,003        2,341    (632,534)    2,079,597
   Nine months ended September 30, 1999       261,140       41,286      673,065        4,756          327    (209,190)      771,384

Gross operating margin
   by segment
   Three months ended September 30, 2000       32,510       10,292       29,083        2,190          429           -        74,504
   Three months ended September 30, 1999       36,142        6,985        7,110        2,519          170           -        52,926
   Nine months ended September 30, 2000        96,432       39,120       87,123       13,002        1,854           -       237,531
   Nine months ended September 30, 1999        78,955       15,836        6,677        4,756          651           -       106,875

Property, plant and equipment
   At September 30, 2000                      358,802      356,307      127,001            -        1,062      98,664       941,836
   At December 31, 1999                       362,198      249,453      122,495            -          113      32,810       767,069

Investments in and advances
   to unconsolidated affiliates
   At September 30, 2000                       98,998       86,219       33,000       61,989            -           -       280,206
   At December 31, 1999                        99,110       85,492       33,000       63,004            -           -       280,606
</TABLE>

Pipeline  revenues  for the three months  ended  September  30, 2000 include the
impact of a $9.8 million intercompany elimination between revenues and operating
costs and  expenses  (attributable  to the second  quarter  of 2000).  Since the
decrease  in  revenues is offset by an equal  decrease  in  operating  costs and
expenses,  there  was no  impact  on gross  operating  margin as a result of the
reclassification.



                                       13
<PAGE>

A reconciliation of segment gross operating margin to consolidated income before
minority interest follows:
<TABLE>
<CAPTION>
                                                                 For Three Months Ended         For Nine Months Ended
                                                                     September 30,                  September 30,
                                                              -----------------------------  -----------------------------
                                                                     2000           1999             2000          1999
                                                              -----------------------------  -----------------------------
<S>                                                                <C>            <C>              <C>           <C>
Total segment gross operating margin                               $ 74,504       $ 52,926         $237,531      $106,875
     Depreciation and amortization                                   (9,029)        (7,012)         (25,907)      (16,368)
     Retained lease expense, net                                     (2,660)        (2,645)          (7,984)       (7,977)
     Loss on sale of assets                                              27              1           (2,276)         (123)
     Selling, general and administrative                             (6,978)        (3,200)         (20,020)       (9,200)
                                                              -----------------------------  -----------------------------
Consolidated operating income                                        55,864         40,070          181,344        73,207
     Interest expense                                                (7,486)        (4,515)         (23,330)       (8,907)
     Interest income (expense) from unconsolidated affiliates          (122)           407               80         1,096
     Dividend income from unconsolidated affiliates                   2,241              -            6,236             -
     Interest income - other                                            458            682            3,431         1,114
     Other, net                                                         (71)            72            ( 496)          117
                                                              -----------------------------  -----------------------------
Consolidated income before minority interest                       $ 50,884       $ 36,716         $167,265      $ 66,627
                                                              =============================  =============================
</TABLE>


11.      SUBSEQUENT EVENTS

On September 25, 2000,  the Company  announced that it has executed a definitive
agreement to purchase  Acadian Gas, LLC ("Acadian")  from Coral Energy,  LLC, an
affiliate of Shell Oil Company,  for $226 million in cash,  inclusive of working
capital.  The acquisition of Acadian  integrates natural gas pipeline systems in
South  Louisiana  with the Company's  Gulf Coast natural gas  processing and NGL
fractionation,  pipeline and storage system.  Acadian's  assets are comprised of
the  438-mile  Acadian,  577-mile  Cypress  and 27-mile  Evangeline  natural gas
pipeline  systems,  which  together have over one billion cubic feet ("Bcf") per
day of capacity.  These natural gas pipeline systems are wholly-owned by Acadian
with  the  exception  of  the  Evangeline  system  in  which  Acadian  holds  an
approximate  49.5% economic  interest.  The system includes a leased natural gas
storage  facility  at  Napoleonville,   Louisiana  with  3.4  Bcf  of  capacity.
Completion  of this  transaction  is subject to  certain  conditions,  including
regulatory  approvals.  The  purchase is expected to be  completed in the fourth
quarter of 2000.

On October 6, 2000,  the Company  announced  that a subsidiary  had purchased an
additional  3,521  shares of common stock of Dixie from Conoco Pipe Line Company
for  approximately  $19.4 million.  The purchase  brings the Company's  economic
interest in Dixie to 19.9%.

                                       14
<PAGE>

       Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS.

            For the Interim Periods ended September 30, 2000 and 1999

         The following  discussion  and analysis  should be read in  conjunction
with the  unaudited  consolidated  financial  statements  and notes  thereto  of
Enterprise  Products  Operating L.P. (the "Company")  included elsewhere herein.
All references herein to "Shell", unless the context indicates otherwise,  shall
refer collectively to Shell Oil Company, its subsidiaries and affiliates.

Uncertainty of Forward-Looking Statements and Information

         MD&A contains various  forward-looking  statements and information that
are based on the  belief of the  Company  and the  General  Partner,  as well as
assumptions made by and information  currently  available to the Company and the
General  Partner.  When  used  in this  document,  words  such as  "anticipate,"
"estimate,"   "project,"   "expect,"  "plan,"  "forecast,"   "intend,"  "could,"
"believe," and "may," and similar expressions and statements regarding the plans
and  objectives of the Company for future  operations,  are intended to identify
forward-looking statements. Although the Company and the General Partner believe
that  the  expectations   reflected  in  such  forward-looking   statements  are
reasonable,  they can give no assurance that such  expectations will prove to be
correct.  Such  statements  are  subject to certain  risks,  uncertainties,  and
assumptions.  If one or more of these risks or uncertainties materialize,  or if
underlying assumptions prove incorrect,  actual results may vary materially from
those anticipated, estimated, projected, or expected.

          Among  the key risk  factors  that may  have a direct  bearing  on the
Company's  results of operations and financial  condition  are: (a)  competitive
practices in the industries in which the Company  competes,  (b) fluctuations in
oil, natural gas, and NGL product prices and production due to weather and other
concerns, (c) operational and systems risks, (d) environmental  liabilities that
are not covered by indemnity or insurance,  (e) the impact of current and future
laws  and  governmental   regulations  (including   environmental   regulations)
affecting  the  NGL  industry  in  general,  and  the  Company's  operations  in
particular,  (f) loss of a significant customer, and (g) failure to complete one
or more new projects on time or within budget.

         In addition,  the Company's  expectations  regarding its future capital
expenditures  as described in  "Liquidity  and Capital  Resources"  are only its
forecasts  regarding these matters.  In addition to the factors described in the
previous paragraph,  these forecasts may be substantially  different from actual
results,  which are affected by the following major factors: (a) the accuracy of
the Company's estimates regarding its spending requirements,  (b) the occurrence
of any  unanticipated  acquisition  opportunities,  (c) the need to replace  any
unanticipated  losses in capital assets, (d) changes in the strategic  direction
of  the  Company  and  (e)  unanticipated  legal,   regulatory  and  contractual
impediments with regards to its construction projects.

Company Overview

         The Company is a leading  integrated North American provider of natural
gas  processing  and  natural  gas  liquids  ("NGL"  or  "NGLs")  fractionation,
transportation  and storage  services to producers of NGLs and  consumers of NGL
products.  The  Company  was  formed  on April  9,  1998 as a  Delaware  limited
partnership  to  acquire,  own and  operate  the  natural  gas  liquids  ("NGL")
processing and distribution assets of Enterprise Products Company ("EPCO").  The
Company's  limited  partner,  Enterprise  Products  Partners  L.P. (the "Limited
Partner"),  owns  98.9899%  of the  Company.  Enterprise  Products  GP, LLC (the
"General Partner") is the general partner and owns 1.0101% of the Company.  Both
the Limited  Partner  and the General  Partner  are  subsidiaries  of EPCO.  The
principal  executive  office of the  Company is located at 2727 North Loop West,
Houston,  Texas,  77008-1038,  and  the  telephone  number  of  that  office  is
713-880-6500.



                                       15
<PAGE>

         The  Company  (i)  processes   natural  gas  into  a  merchantable  and
transportable  form of energy  that meets  industry  quality  specifications  by
removing NGLs and impurities;  (ii) fractionates for a processing fee mixed NGLs
produced as by-products of oil and natural gas production  into their  component
products: ethane, propane,  isobutane, normal butane and natural gasoline; (iii)
converts normal butane to isobutane through the process of  isomerization;  (iv)
produces MTBE from  isobutane and methanol;  and (v)  transports NGL products to
end users by pipeline  and  railcar.  The  Company  also  separates  high purity
propylene from refinery-sourced propane/propylene mix and transports high purity
propylene  to plastics  manufacturers  by  pipeline.  Products  processed by the
Company generally are used as feedstocks in petrochemical manufacturing,  in the
production of motor gasoline and as fuel for residential and commercial heating.

         The Company's NGL operations are concentrated in the Texas,  Louisiana,
and  Mississippi  Gulf  Coast  area.  A large  portion is  concentrated  in Mont
Belvieu, Texas, which is the hub of the domestic NGL industry and is adjacent to
the largest  concentration of refineries and petrochemical  plants in the United
States. The facilities the Company operates at Mont Belvieu include:  (a) one of
the largest NGL  fractionation  facilities  in the United States with an average
gross  production  capacity of 210 thousand  barrels per day  ("MBPD");  (b) the
largest  butane  isomerization  complex  in the  United  States  with an average
isobutane  production  capacity of 116 MBPD; (c) a MTBE production facility with
an  average  gross  production  capacity  of 15  MBPD;  and  (d)  two  propylene
fractionation units with an average combined production capacity of 31 MBPD. The
Company owns all of the assets at its Mont Belvieu  facility  except for the NGL
fractionation  facility,  in which it owns an effective 62.5% economic interest;
one of the propylene  fractionation units, in which it owns a 54.6% interest and
controls the remaining  interest  through a long-term lease; the MTBE production
facility, in which it owns a 33.33% interest; and one of its three isomerization
units and one deisobutanizer which are held under long-term leases with purchase
options.

          The Company's  operations in Louisiana and Mississippi include varying
interests in eleven  natural gas processing  plants with a combined  capacity of
11.0 billion cubic feet per day ("Bcfd") and net capacity of 3.1 Bcfd,  five NGL
fractionation  facilities  with a combined  gross  capacity  of 341 MBPD and net
capacity  of 151  MBPD  and a  propylene  fractionation  facility  with a  gross
capacity of 22.5 MBPD and net  capacity of 6.8 MBPD.  In  addition,  the Company
owns and operates a NGL  fractionation  facility in Petal,  Mississippi  with an
average production capacity of 7 MBPD.

         The Company  owns,  operates or has an interest in  approximately  65.0
million barrels of gross storage capacity (44.3 million barrels of net capacity)
in Texas,  Louisiana and Mississippi that are an integral part of its processing
operations.  The Company also leases and operates one of only two commercial NGL
import/export  terminals  on the  Gulf  Coast.  In  addition,  the  Company  has
operating  and  non-operating  ownership  interests  in over 2,900  miles of NGL
pipelines  along the Gulf Coast  (including  the  206-mile  Lou-Tex NGL Pipeline
currently under  construction  and expected in service during the fourth quarter
of 2000).

         The Company's  operating  margins are derived from services provided to
its tolling  customers  and from  merchant  activities.  In the  Company's  toll
processing operations,  it does not take title to the product and is simply paid
a fee based on volumes processed,  transported, stored or handled. The Company's
profitability  from toll processing  operations depends primarily on the volumes
of natural gas, NGLs and  refinery-sourced  propane/propylene  mix processed and
transported  and the level of associated  fees charged to its customers.  In the
Company's  isomerization  merchant  activities  and  to  a  certain  extent  its
propylene fractionation business, it takes title to feedstock products and sells
processed  end  products.  The  Company's   profitability  from  these  merchant
activities is dependent on the prices of feedstocks and end products,  which may
vary on a seasonal basis. In the Company's propylene  fractionation business and
isomerization  business,  the Company generally attempts to match the timing and
price of its feedstock  purchases  with those of the sales of end products so as
to reduce exposure to fluctuations in commodity prices. The Company's  operating
margins from its natural gas processing  business are generally derived from the
margins  earned on the sale of purity NGL  products  extracted  from natural gas
streams.  To the extent it takes title to the NGLs  removed from the natural gas
stream and reimburses the producer for the reduction in the British thermal unit
("Btu") content and/or the natural gas used as fuel (the "PTR" or  "shrinkage"),
the  Company's  margins are  affected  by the prices of  NGLs and  natural  gas.
Management  uses  financial  instruments to reduce its exposure to the change in
the prices of NGLs and natural gas.



                                       16
<PAGE>

         The Company  will  continue to analyze  potential  acquisitions,  joint
ventures or similar  transactions  with businesses that operate in complementary
markets and  geographic  regions.  In recent years,  major oil and gas companies
have sold  non-strategic  assets including  assets in the midstream  natural gas
industry in which the Company operates. Management believes that this trend will
continue,  and the Company expects  independent oil and natural gas companies to
consider  similar  options.  In the last two years,  the Company  has  announced
several  acquisitions,  the largest of which are Tejas Natural Gas Liquids,  LLC
("TNGL")  (completed  in the  third  quarter  of  1999)  and  Acadian  Gas,  LLC
("Acadian")  (announced in September 2000 and pending  completion).  See "Recent
Acquisitions" under the "Results of Operations of the Company" section below for
further details on these and other acquisition transactions.

Business Environment

         The  domestic  and  international  economies  continue  to  be  strong,
creating  firm demand for the products  and services of the U. S. NGL  industry.
Each of the Company's  business segments have benefited from steady domestic and
international demand for NGLs, petroleum liquids and MTBE.

         During  the  first  nine  months of 2000,  the  Company's  natural  gas
processing  business  was  running at  optimal  levels due to a strong NGL price
environment  and robust demand for natural gas processing  services by producers
such as Shell, the Company's largest natural gas processing customer. The strong
NGL price  environment  has  supported  full NGL recovery at the  Company's  gas
processing  plants.  Recent increases in natural gas prices may moderate maximum
recovery  levels  for some NGL  products  (primarily  ethane)  during the fourth
quarter of 2000.  An  increase  in natural  gas  production  that is high in NGL
content, which will be available for processing as producers respond to the high
natural  gas  price  environment,  is  expected  to offset  to some  degree  the
potential decline in product recovery levels.

         The Company's NGL production in 2000 has  significantly  increased over
1999 levels as a result of steady to growing  levels of natural  gas  production
available  for  processing,  higher NGL content  natural gas and new  processing
facilities,  such as the Company's Neptune plant. Neptune was brought on-line in
February 2000 and is now producing in excess of 16 MBPD.  For the three and nine
months ended  September  30, 2000,  equity NGL  production  at the Company's gas
processing facilities averaged 73 MBPD and 72 MBPD, respectively, as compared to
65 MBPD during the third quarter of 1999. Management believes that the Company's
equity NGL  production  volumes  will  continue to increase  during  2001.  This
increase will result from gas production coming on-line from several new Gulf of
Mexico gas fields to which the Company  holds gas  processing  rights,  the most
significant  of which is Shell's  deepwater  Brutus  development  (with expected
equity NGL production of 10 MBPD by the end of 2001).

         The highly competitive  environment in which the Company's Mont Belvieu
NGL fractionators  operate has continued to suppress NGL  fractionation  fees at
these facilities.  The Company has and is continuing to aggressively acquire new
and  reacquire  previous  NGL  fractionation  customers,   along  with  offering
competitively-priced   bundled  service   packages   involving   transportation,
fractionation  and other services.  These service  packages allow the Company to
take full  advantage of its presence  throughout the entire Gulf Coast NGL value
chain.  As a result  of  these  efforts,  throughput  at the  Mont  Belvieu  NGL
fractionation  facility has increased  significantly  in 2000. For the three and
nine months ended September 30, 2000, throughput averaged 174 MBPD and 169 MBPD,
respectively,  as compared  to 149 MBPD and 155 MBPD during the same  periods in
1999. Throughput levels at the Company's Louisiana NGL fractionation  facilities
have also increased due to additional production from gas processing facilities.
With the  completion of the Lou-Tex NGL Pipeline in the fourth  quarter of 2000,
the  Company  will  be   positioned  to  fully  utilize  its  Mont  Belvieu  NGL
fractionation  facilities to process NGL's from Louisiana  starting in the first
quarter of 2001.

         The demand for the Company's commercial  isomerization services depends
on requirements for isobutane in excess of naturally occurring isobutane that is
produced from NGL  fractionation and refinery  operations.  The market for these
services  has been  firm in 2000 due to the  continued  need for  isobutane  for
alkylation,  propylene  oxide, and as a feedstock for MTBE.  Management  expects
that this market will remain steady throughout the remainder of 2000.



                                       17
<PAGE>

         During  the  third  quarter  of 2000,  the  rapid  price  increase  for
propylene experienced during the first half of 2000 began to reverse. During the
first half,  propylene prices were driven by the dramatic increases in crude oil
and NGL prices.  These factors  contributed to similar increases in the cost for
ethylene and  propylene  from steam  crackers and for refinery  grade  propylene
produced by refineries. In addition, the price spike in motor gasoline created a
very  competitive  market for refinery grade propylene used in the production of
alkylate which is blended to motor  gasoline.  With the perceived  stabilization
and  potential  softening  in crude  oil  prices,  propylene  buyers  have  been
successful in achieving  price  reductions  by reducing  purchases and consuming
inventory.   Contract  prices  for  polymer  grade   propylene   increased  from
approximately  19.5 cents per pound at the  beginning  of 2000 to 27.5 cents per
pound  by the end of June.  By the end of  September,  the  contract  price  had
slipped to 24 cents per pound.  Management anticipates that prices will continue
to soften  throughout  the remainder of this year with the price leveling out to
that seen in the  beginning  of 2000.  The  Company is  exposed  to these  price
decreases  only to the  extent  that it  sells  product  pursuant  to  long-term
agreements with market-based pricing or spot market transactions.

         Favorable  domestic  economic  conditions  have led to an  increase  in
demand for the Company's pipeline  transportation services as NGL feedstocks and
products are being  consumed at record levels  throughout the Gulf Coast region.
Pipeline  throughput  has also  increased as a result of strategic  acquisitions
made by the Company,  such as the purchase of the Lou-Tex Propylene  Pipeline in
the first quarter of 2000. The Company expects  pipeline  throughput to continue
to increase as new projects such as the Lou-Tex NGL Pipeline become operational.
The Company anticipates using the Lou-Tex NGL Pipeline to transport NGL products
and mixed  propane/propylene  streams between the Louisiana and Texas markets to
take  advantage  of  product  value  differentials  between  the two  regions in
addition to transporting  production from Louisiana gas processing facilities to
Mont Belvieu for fractionation.

         During the second quarter of 2000, Belvieu Environmental Fuels' ("BEF")
MTBE operations benefited from tight international  supplies as Middle East MTBE
volumes were diverted to European  countries  instead of the United States.  The
spot price  increased to near record  levels in the second  quarter of 2000 when
the lower  imports were met with the  increased  seasonal  demands from domestic
gasoline producers.  During the second quarter of 2000, MTBE prices reached near
record levels  averaging  $1.32 per gallon ($1.58 during the month of June).  As
refiners  decreased  demand and imports  returned to the domestic  market,  MTBE
market prices began to decline in the third quarter to  approximately  $1.11 per
gallon by the end of September.  The Company's operating results from its Octane
Enhancement  segment  are  impacted  by changes  in market  prices  since  BEF's
contract with Sunoco, Inc. R&M ("Sun"),  which is contracted to purchase 100% of
BEF's MTBE  production,  is based on a  market-related  negotiated  price.  As a
result,  management believes that gross operating margin in this segment will be
affected  by  seasonal  variations  in the  demand for motor  gasoline  which is
normally  greater in the April to September  period  (i.e.,  the summer  driving
season) than the October to March period.  Management  expects fourth quarter of
2000  gross  operating  margin  from  Octane  Enhancement  will be less than the
results posted for the third quarter of 2000.



                                       18
<PAGE>

         The following table  illustrates  selected average quarterly prices for
natural gas,  crude  oil, selected  NGL products  and  polymer  grade  propylene
since the first quarter of 1999:

<TABLE>
<CAPTION>
                                                                                                   Polymer
                      Natural                                             Normal                    Grade
                        Gas,      Crude Oil,    Ethane,     Propane,     Butane,     Isobutane,  Propylene,
                      $/MMBtu      $/barrel    $/gallon     $/gallon     $/gallon     $/gallon     $/pound
                        (a)          (b)          (c)         (c)          (c)          (c)          (c)
                    -----------------------------------------------------------------------------------------
Fiscal 1999:
<S>                     <C>         <C>          <C>          <C>          <C>          <C>         <C>
   First quarter        $1.70       $13.05       $0.20        $0.24        $0.29        $0.31       $0.12
   Second quarter       $2.12       $17.66       $0.27        $0.31        $0.37        $0.38       $0.13
   Third quarter        $2.56       $21.74       $0.34        $0.42        $0.49        $0.49       $0.16
   Fourth quarter       $2.52       $24.54       $0.30        $0.41        $0.52        $0.52       $0.19

Fiscal 2000:

   First quarter        $2.49       $28.84       $0.38        $0.54        $0.64        $0.64       $0.21
   Second quarter       $3.41       $28.79       $0.36        $0.52        $0.60        $0.68       $0.26
   Third quarter        $4.22       $31.61       $0.40        $0.60        $0.68        $0.67       $0.26
</TABLE>

Notes:
(a)  Natural gas, NGL and polymer grade propylene prices represent an average of
     index prices
(b)  Crude Oil price is representative of West Texas Intermediate

Results of Operation of the Company

         The  Company has five  reportable  operating  segments:  Fractionation,
Pipeline,  Processing,  Octane Enhancement and Other. Fractionation includes NGL
fractionation,  butane isomerization  (converting normal butane into high purity
isobutane) and polymer grade propylene fractionation services. Pipeline consists
of pipeline,  storage and import/export  terminal services.  Processing includes
the natural gas  processing  business and its related NGL  merchant  activities.
Octane  Enhancement  represents  the Company's  33.33%  ownership  interest in a
facility that produces  motor gasoline  additives to enhance  octane  (currently
producing  MTBE). The Other operating  segment  consists of fee-based  marketing
services and other plant support functions.

         The  management of the Company  evaluates  segment  performance  on the
basis of gross operating margin ("gross  operating  margin" or "margin").  Gross
operating  margin reported for each segment  represents  operating income before
depreciation and amortization, lease expense obligations retained by EPCO, gains
and losses on the sale of assets and general  and  administrative  expenses.  In
addition,  segment  gross  operating  margin is exclusive  of interest  expense,
interest income (from unconsolidated affiliates or others), dividend income from
unconsolidated  affiliates,  minority interest,  extraordinary charges and other
income  and  expense   transactions.   The   Company's   equity   earnings  from
unconsolidated affiliates are included in segment gross operating margin.



                                       19
<PAGE>

         The  Company's  gross  operating  margin by segment  (in  thousands  of
dollars) along with a  reconciliation  to consolidated  operating income for the
three and nine month periods ended September 30, 2000 and 1999 were as follows:

 <TABLE>
<CAPTION>
                                                      For Three Months Ended                For Nine Months Ended
                                                            September 30,                         September 30,
                                                        2000              1999                2000             1999
                                                  -----------------------------------   -----------------------------------

Gross Operating Margin by segment:
<S>                                                      <C>              <C>                 <C>               <C>
     Fractionation                                       $   32,510       $   36,142          $   96,432        $   78,955
     Pipeline                                                10,292            6,985              39,120            15,836
     Processing                                              29,083            7,110              87,123             6,677
     Octane enhancement                                       2,190            2,519              13,002             4,756
     Other                                                      429              170               1,854               651
                                                  -----------------------------------   -----------------------------------
Gross Operating margin total                                 74,504           52,926             237,531           106,875
     Depreciation and amortization                            9,029            7,012              25,907            16,368
     Retained lease expense, net                              2,660            2,645               7,984             7,978
     Loss (gain) on sale of assets                              (27)              (1)              2,276               122
     Selling, general and administrative expenses             6,978            3,200              20,020             9,200
                                                  -----------------------------------   -----------------------------------
Consolidated operating income                            $   55,864       $   40,070          $  181,344        $   73,207
                                                  ===================================   ===================================
</TABLE>

         The Company's  significant  plant  production and other volumetric data
(in  thousands  of  barrels  per day on an equity  basis) for the three and nine
month periods ended September 30, 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                                        For Three Months Ended                For Nine Months Ended
                                                            September 30,                         September 30,
                                                        2000             1999                2000              1999
                                                  -----------------------------------  ------------------------------------
  Plant production and operating data:
<S>                                                      <C>               <C>                 <C>               <C>
        NGL Production                                   73                65                  72                65
        NGL Fractionation                               214               201                 215               178
        Isomerization                                    84                77                  77                73
        Propylene Fractionation                          34                26                  31                27
        MTBE                                              6                 4                   5                 4
        Major Pipelines                                 278               264                 323               230
</TABLE>

         In order to more  accurately  compare  operating rates between the 2000
and 1999 periods, the 1999 volumes associated with the assets acquired from TNGL
have been adjusted to reflect the period in which the Company owned them.

         1999 Acquisitions

         The Company  completed two  significant  acquisitions  during the third
quarter of 1999. Effective August 1, 1999, the Company acquired TNGL from Shell,
in exchange  for 14.5  million  non-distribution  bearing,  convertible  special
partnership  Units of the Limited  Partner and $166 million in cash. The Limited
Partner  also  agreed  to issue up to 6.0  million  additional  non-distribution
bearing  special  partnership  Units to Shell in the  future if the  volumes  of
natural gas that the  Company  processes  for Shell reach  agreed upon levels in
2000 and 2001.  The first 3.0 million of these  additional  special  partnership
Units were issued by the Limited Partner on August 1, 2000.

         The businesses  acquired from Shell include  natural gas processing and
NGL  fractionation,  transportation and storage in Louisiana and Mississippi and
its NGL supply  and  merchant  business.  The assets  acquired  include  varying
interests  in eleven  natural  gas  processing  plants,  four NGL  fractionation
facilities,  four NGL storage  facilities,  operator and non-operator  ownership
interests in approximately  1,500 miles of NGL pipelines,  and a 20-year natural
gas processing  agreement with Shell. The Company accounted for this acquisition
using the  purchase  method.  The value of the 20-year  natural  gas  processing
agreement  (classified  as an Intangible  Asset on the balance  sheet) was $80.2
million at September 30, 2000 and $54.0 million at December 31, 1999.  The value
has been  adjusted  for the 3.0 million  additional  special  partnership  Units


                                       20
<PAGE>

issued  to  Shell  on  August  1,  2000,  finalization  of  purchase  accounting
adjustments and related amortization.

         Effective  July 1,  1999,  a  subsidiary  of the  Company  acquired  an
additional  25% interest in the Mont  Belvieu NGL  fractionation  facility  from
Kinder  Morgan  Operating  LP "A"  ("Kinder  Morgan")  for a  purchase  price of
approximately $41.2 million in cash and the assumption of $4 million in debt. An
additional 0.5% interest in the same facility was purchased from EPCO for a cash
purchase  price  of $0.9  million.  This  acquisition  (referred  to as the "MBA
acquisition")  increased the Company's  effective  economic interest in the Mont
Belvieu  NGL  fractionation  facility  from 37.0% to 62.5%.  As a result of this
acquisition,  the  results of  operations  after July 1, 1999 were  consolidated
rather than included in equity income from unconsolidated affiliates.

         The results of  operations  for the three and nine month  periods ended
September 30, 1999 include two month's  impact of the  businesses  acquired from
TNGL and three month's impact of the additional ownership interest acquired as a
result of the MBA  transaction.  See the section below labeled "Pro Forma impact
of Acquisitions" for selected financial data reflecting these transactions as if
they had occurred on January 1, 1999.

         2000 Acquisitions. On September 25, 2000, the Company announced that it
has executed a definitive  agreement  to purchase  Acadian Gas, LLC  ("Acadian")
from  Coral  Energy,  LLC,  an  affiliate  of Shell,  for $226  million in cash,
inclusive of working capital.  The acquisition of Acadian integrates natural gas
pipeline  systems in South  Louisiana  with the Company's Gulf Coast natural gas
processing and NGL fractionation,  pipeline and storage system. Acadian's assets
are comprised of the 438-mile Acadian,  577-mile Cypress and 27-mile  Evangeline
natural gas pipeline  systems,  which  together have over one billion cubic feet
("Bcf") per day of capacity. These natural gas pipeline systems are wholly-owned
by Acadian with the exception of the Evangeline system in which Acadian holds an
approximate  49.5% economic  interest.  The system includes a leased natural gas
storage  facility  at  Napoleonville,   Louisiana  with  3.4  Bcf  of  capacity.
Completion  of this  transaction  is subject to  certain  conditions,  including
regulatory  approvals.  The  purchase is expected to be  completed in the fourth
quarter of 2000.

Three Months Ended September 30, 2000 compared with Three Months Ended September
30, 1999

         Revenues,  Costs and  Expenses  and  Operating  Income.  The  Company's
revenues  increased 62% to $721.9  million in 2000 compared to $445.0 million in
1999.  The  Company's  operating  costs and expenses  increased by 64% to $659.0
million in 2000 versus $401.8 million in 1999. Operating income increased 39% to
$55.9 million in 2000 from $40.1 million in 1999.  The principal  factors behind
the increase in operating  income were (a) the improvement in NGL product prices
in  2000  versus  1999  and (b)  the  additional  margins  associated  with  the
businesses acquired in the TNGL acquisition. The 1999 period includes two months
of margins  associated with the TNGL operations whereas the 2000 period includes
three months.

         Fractionation.  For the third quarter of 2000,  gross operating  margin
for the  Fractionation  segment was $32.5  million  compared to $36.1 million in
1999. NGL  fractionation  margin increased $3.3 million in 2000 compared to 1999
primarily due to additional  margins from the  fractionators  acquired from TNGL
(i.e., Norco, Promix, Venice and Tebone). As noted earlier, the third quarter of
1999  includes  only two months of margin from these  fractionators  whereas the
third quarter of 2000 includes three months.  On a net basis, NGL  fractionation
volumes  increased  from  201 MBPD in 1999 to 214  MBPD in 2000  reflecting  the
Company's  successful campaign to increase its customer base at its Mont Belvieu
facilities.  Gross operating margin from the isomerization  business decreased a
net  $6.3  million  during  the  third  quarter  of  2000  primarily  due to the
reclassification  of margins from NGL merchant  activities that,  beginning with
the implementation of the current segment reporting  structure which was adopted
effective  with the beginning of the fourth quarter of 1999, are now reported in
the Processing segment.  Isomerization volumes increased from 77 MBPD in 1999 to
84 MBPD in 2000  due to  increased  demand  for the  Company's  services.  Gross
operating margin from the Company's propylene  fractionation  business decreased
slightly  primarily  due to  higher  energy  and  maintenance  costs.  Propylene
fractionation  volumes  increased from 26 MBPD in 1999 to 34 MBPD in 2000 due to
the startup of the BRPC facilities in July 2000.

         Pipeline.  The  Company's  gross  operating  margin  from the  Pipeline
segment was $10.3  million in the third quarter of 2000 compared to $7.0 million
during the same period in 1999.  Overall  volumes  increased to 278 MBPD in 2000
versus 264 MBPD in 1999.  The $3.3 million  increase  from quarter to quarter is


                                       21
<PAGE>

generally  attributable to the addition of margins from the pipeline and storage
assets  acquired from TNGL. As noted earlier,  the 1999 period includes only two
months of margin from these assets whereas the 2000 period reflects three months
of operations.

         Processing.  The Company's  gross  operating  margin for Processing was
$29.1  million  in 2000  compared  to $7.1  million  in  1999.  Due to the  TNGL
acquisition,  the  1999  margin  includes  only  two  months  of gas  processing
operations whereas the third quarter of 2000 includes three months. This segment
benefited  from  the  strong  NGL pricing  environment in 2000 versus 1999 and a
rise in equity NGL production from 65 MBPD in 1999 to 73 MBPD in 2000.

         Octane  Enhancement.  The Company's gross  operating  margin for Octane
Enhancement  decreased to $2.2  million in 2000 from $2.5  million in 1999.  The
decrease is the result of lower  margins on spot MTBE sales in the third quarter
of 2000 versus the margins on contract-based  MTBE sales in the third quarter of
1999. Equity MTBE production increased to 6 MBPD in 2000 from 4 MBPD in 1999.

         Other.  The Company's gross operating  margin for the Other segment was
$0.4 million in 2000 compared to $0.2 million in 1999. The increase is primarily
due to fee-based marketing services added in the fourth quarter of 1999.

         Selling,  general and administrative  expenses ("SG&A").  SG&A expenses
increased to $7.0 million in the third quarter of 2000 from $3.2 million  during
the same  period in 1999.  The  higher  costs  result  from an  increase  in the
administrative  services fee charged by EPCO to $1.6 million per month beginning
in January 2000 versus the  approximately  $1.1 million per month charged in the
third  quarter of 1999.  The  remainder of the increase is  attributable  to the
additional staff and resources deemed necessary to support the Company's ongoing
expansion activities resulting from acquisitions and other business development.

         Interest  expense.  The Company's  interest  expense  increased to $7.5
million in the third  quarter of 2000 from $4.5 million in the third  quarter of
1999. The increase is primarily attributable to a rise in average debt levels to
$437 million in the third quarter of 2000 from $255 million in the third quarter
of 1999. Debt levels have increased over the last year due to  acquisitions  and
various capital expenditures.

Nine Months Ended  September 30, 2000 compared with Nine Months Ended  September
30, 1999

         Revenues,  Costs and  Expenses  and  Operating  Income.  The  Company's
revenues  increased 170% to $2,079.6  million in 2000 compared to $771.4 million
in 1999.  The  Company's  operating  costs  and  expenses  increased  by 173% to
$1,878.2  million  in 2000  versus  $689.0  million  in 1999.  Operating  income
increased  148% to  $181.3  million  in 2000 from  $73.2  million  in 1999.  The
principal  factors  behind  the  increase  in  operating  income  were  (a)  the
improvement  in NGL product  prices in 2000  versus 1999 and (b) the  additional
margins  associated with the businesses  acquired in the TNGL  acquisition.  The
1999 period  includes two months of margins  associated with the TNGL operations
whereas the 2000 period includes nine months.

         Fractionation.   The   Company's   gross   operating   margin  for  the
Fractionation  segment  increased to $96.4 million in 2000 from $79.0 million in
1999.  For the first nine months of 2000,  NGL  fractionation  margin  increased
$29.4 million over 1999 as a result of the additional  margins from the four NGL
fractionators acquired from TNGL. As noted previously,  the 1999 period includes
only two  months of margin  from these  fractionators  whereas  the 2000  period
includes  nine  months.  In  addition,  equity  income from BRF  reflects  three
quarters  of  operations  in 2000  versus  one  quarter in 1999.  BRF  commenced
operations in the third quarter of 1999. Net NGL fractionation volumes increased
from  178  MBPD in 1999 to 215  MBPD  in  2000  primarily  due to the  Company's
acquisition of new and previous  customers at its Mont Belvieu NGL  fractionator
in 2000 and the increased  ownership of the Mont Belvieu NGL  fractionator  as a
result  of the MBA  acquisition.  For the  first  nine  months  of  2000,  gross
operating  margin  from  the  isomerization  business  decreased  $10.0  million
compared  to 1999  primarily  due to a  reclassification  of  margins  from  NGL
merchant  activities  that,  beginning  with the  implementation  of the current
segment reporting  structure which was adopted effective with the fourth quarter
of 1999,  are now  reported in the  Processing  segment.  Isomerization  volumes
increased  from 73 MBPD in 1999 to 77 MBPD in 2000 due to strong  demand for the
Company's services.  Gross operating margin from propylene fractionation for the


                                       22
<PAGE>

first nine months of 2000 decreased  slightly  compared to 1999 primarily due to
higher energy and  maintenance  costs.  Net equity  volumes at these  facilities
improved  to 31 MBPD in 2000  versus 27 MBPD in 1999 due to the  startup  of the
BRPC propylene concentrator in July 2000.

         Pipeline. The Company's gross operating margin for the Pipeline segment
was $39.2  million in 2000 compared to $15.8  million in 1999.  Overall  volumes
increased  to 323  MBPD in 2000  from 230 MBPD in  1999.  Generally,  the  $23.4
million increase in margin is attributable to the additional volumes and margins
contributed  by the  pipeline  and storage  assets  acquired  from TNGL,  higher
margins  from the Houston Ship  Channel  Distribution  System and EPIK due to an
increase in export volumes plus the margins from the Lou-Tex Propylene  Pipeline
that was purchased in March 2000.

         The growth in export volumes is attributable to EPIK's new chiller unit
that began  operations in the fourth  quarter of 1999. On February 25, 2000, the
purchase  of the  Lou-Tex  Propylene  Pipeline  and  related  assets from Concha
Chemical  Pipeline  Company,  an affiliate of Shell,  was completed at a cost of
approximately  $100 million.  The effective date of the transaction was March 1,
2000. The Lou-Tex Propylene Pipeline is a 263-mile, 10" pipeline that transports
up to 50 MBPD of chemical  grade  propylene  from  Sorrento,  Louisiana  to Mont
Belvieu,  Texas.  Also  acquired in this  transaction  was a 27.5-mile 6" ethane
pipeline between Sorrento and Norco,  Louisiana and a 0.5 million barrel storage
cavern at Sorrento, Louisiana.

         Processing.  The Company's  gross  operating  margin for Processing was
$87.1  million  in 2000  compared  to $6.7  million  in  1999.  Due to the  TNGL
acquisition,  the  1999  margin  includes  only  two  months  of gas  processing
operations whereas the 2000 period includes nine months.  This segment benefited
from the strong NGL pricing environment in 2000 versus 1999 and a rise in equity
NGL production from 65 MBPD in 1999 to 72 MBPD in 2000.

         Octane  Enhancement.  The Company's gross  operating  margin for Octane
Enhancement  increased to $13.0 million in 2000 from $4.8 million in 1999.  This
segment consists entirely of the Company's equity earnings and 33.33% investment
in BEF, a joint venture facility that currently  produces MTBE. The 1999 results
included the impact of a $4.5  million  non-cash  write-off  of the  unamortized
balance of deferred  start-up costs. The Company's share of this non-cash charge
was $1.5 million. The 2000 results reflect the impact of higher than normal MTBE
market prices  during the second  quarter and early third quarter and lower debt
service costs. BEF made its final note payment in May 2000 and now owns the MTBE
facility debt-free.  MTBE production, on an equity basis, was 4 MBPD in 1999 and
5 MBPD in 2000.

         Other.  The Company's gross operating  margin for the Other segment was
$1.9 million in 2000 compared to $0.7 million in 1999. The increase is primarily
due to fee-based marketing services added in the fourth quarter of 1999.

         Selling,  general and administrative  expenses. SG&A expenses increased
to $20.0 million in 2000 from $9.2 million  during 1999. The higher costs result
from an  increase  in the  administrative  services  fee charged by EPCO to $1.6
million  per month  beginning  in January  2000  versus the  approximately  $1.0
million per month charged in 1999. The remainder of the increase is attributable
to the additional  staff and resources deemed necessary to support the Company's
ongoing  expansion  activities  resulting from  acquisitions  and other business
development.

         Interest  expense.  The Company's  interest expense  increased to $23.3
million  in  2000  from  $8.9  million  in  1999.   The  increase  is  primarily
attributable  to a rise in average debt levels to $395 million in 2000 from $170
million  in  1999.  Debt  levels  have  increased  over  the  last  year  due to
acquisitions and various capital expenditures.

         Loss on sale of assets.  During the second quarter of 2000, the Company
recognized a one-time $2.3 million  non-cash  charge on the sale of its Longview
Terminal  to  Huntsman  Corporation.  The  Longview  Terminal  was  part  of the
Pipelines  segment and was used to unload polymer grade  propylene from NGL tank
trucks.



                                       23
<PAGE>

Pro Forma impact of Acquisitions

         As noted above under 1999  Acquisitions,  the Company acquired TNGL and
MBA in the third quarter of 1999. As a result of these  acquisitions,  revenues,
operating costs and expenses,  interest expense,  and other amounts shown on the
Statements  of  Consolidated  Operations  for the  three and nine  months  ended
September 30, 2000 have increased  significantly  over the amounts shown for the
three and nine months ended  September 30, 1999.  The following  table  presents
certain  unaudited pro forma information as if the TNGL and MBA acquisitions had
been made as of January 1, 1999:

                                     Three Months         Nine Months
                                        Ended                Ended
                                    September 30,        September 30,
                                         1999                 1999
                                  -------------------  -------------------
Revenues                                  $  506,944          $ 1,151,444
                                  ===================  ===================
Net income                                $   41,067          $    81,607
                                  ===================  ===================
Allocation of net income to
      Limited partners                    $   40,652          $    80,783
                                  ===================  ===================
      General Partner                     $      415          $       824
                                  ===================  ===================


Liquidity and Capital Resources

         General. The Company's primary cash requirements, in addition to normal
operating  expenses,   are  for  capital   expenditures  (both  maintenance  and
expansion-related),  business  acquisitions,  distributions  to the partners and
debt service. The Company expects to fund its short-term needs for such items as
maintenance  capital  expenditures  and quarterly  distributions to the partners
from operating cash flows.  Capital  expenditures  for long-term needs resulting
from future  expansion  projects  and business  acquisitions  are expected to be
funded by a variety of sources including  (either  separately or in combination)
cash flows from operating  activities,  borrowings under bank credit facilities,
the issuance of additional public debt and contributions from its partners.  The
Company's debt service  requirements are expected to be funded by operating cash
flows or refinancing arrangements.

         As noted above, certain of the Company's liquidity and capital resource
requirements are met using borrowings  under bank credit  facilities  and/or the
issuance  of  additional  public  debt  (separately  or in  combination).  As of
September 30, 2000,  availability  under the Company's  $350 Million Bank Credit
Facility  was $300.0  million  plus $26.7  million  for  letters of credit.  The
Company is in the  process  of  refinancing  this  credit  facility  with a $400
million  long-term  revolving bank credit  facility  (increasing to $500 million
under certain conditions). The refinancing effort is expected to be completed in
the fourth quarter of 2000.

         In addition  to the  existing  and  potential  bank credit  facilities,
approximately $450 million of shelf availability  remains  outstanding under the
Company's $800 million December 1999 universal shelf registration statement (the
"Registration  Statement") which may be used for general  partnership  purposes.
$350 million of shelf  availability  was used in March 2000 with the issuance of
the $350  Million  Senior  Notes.  For a  broader  discussion  of the  Company's
outstanding  debt and changes  therein since  December 31, 1999, see the section
below labeled  "Long-term  Debt".  In June 2000,  the Limited  Partner  received
approval from its  Unitholders  to increase by  25,000,000  the number of Common
Units  available (and  unreserved) for general  partnership  purposes during its
subordination   period.   This  increase  has  improved  the  future   financial
flexibility of the Limited Partner to contribute cash and/or other assets to the
Company for business expansions and acquisitions.

         If deemed  necessary,  management  believes that  additional  financing
arrangements  can be obtained at  reasonable  terms.  Management  believes  that
maintenance of the Company's investment grade credit ratings (currently, Baa3 by
Moody's  Investor  Service  and  BBB by  Standard  and  Poors)  combined  with a


                                       24
<PAGE>

continued  ready  access to debt (and  equity-sourced  capital  from its Limited
Partner)  at  reasonable  rates  and  sufficient  trade  credit to  operate  its
businesses  efficiently  are a solid  foundation  to providing  the Company with
ample resources to meet its long and short-term  liquidity and capital  resource
requirements.

Operating,  Investing and Financing  Cash Flows for Nine Months Ended  September
30, 2000 and 1999

         Cash flows from  operating  activities  were a $176.1 million inflow in
2000  compared  to a $54.8  million  inflow in 1999.  Cash flows from  operating
activities  primarily  reflect  the  effects  of net  income,  depreciation  and
amortization,   extraordinary   items,  equity  income  and  distributions  from
unconsolidated  affiliates and changes in working capital.  Net income increased
significantly  in 2000  over  1999 due to  reasons  mentioned  previously  under
"Results of Operations of the Company."  Depreciation and  amortization  expense
increased a combined  $10.7  million in 2000 over 1999  primarily  the result of
additional capital expenditures and acquisitions. Of the $10.7 million increase,
$3.4 million is  attributable to increases in  amortization  expense  associated
with the 20-year Shell natural gas processing agreement,  excess cost related to
past  acquisitions  and loan  origination  and bond  issue  costs.  The  Company
received $26.0 million in  distributions  from its equity method  investments in
2000  compared  to $4.6  million  in 1999.  Of the  $21.4  million  increase  in
distributions,   $7.5   million  was  from  BEF  and  $5.3  million  from  EPIK.
Distributions  from BEF improved  period to period due to the strong MTBE prices
and margins during the second quarter of 2000. EPIK's distributions increased as
a result of higher  export  activity  during  the first six  months of 2000.  In
addition,  the first nine months of 2000  included $5.5 million in cash receipts
from  Promix  which was  acquired as a result of the TNGL  acquisition.  The net
effect of changes  in  operating  accounts  from year to year is  generally  the
result of timing of NGL sales and purchases near the end of the period.

         Cash used for investing  activities was $195.9 million in 2000 compared
to $260.4 million in 1999. Cash outflows included capital expenditures of $200.2
million in 2000  versus  $10.6  million in 1999.  Capital  expenditures  in 2000
include  $99.6  million for the purchase of the Lou-Tex  Propylene  Pipeline and
related assets, $71.5 million in construction costs for the Lou-Tex NGL Pipeline
and $4.1 million in construction costs for the Neptune gas processing  facility.
In addition,  capital  expenditures include maintenance capital project costs of
$2.3 million in 2000 and $1.7 million in 1999. The 1999 period  reflects  $208.1
million  in net cash  payments  resulting  from  the TNGL and MBA  acquisitions.
Investing  cash  outflows  in 2000  include  $2.3  million  in  advances  to and
investments in unconsolidated  affiliates compared to $58.5 million in 1999. The
$56.2 million  decrease is primarily  due to the  completion of the BRF facility
and the Tri-States and Wilprise  pipeline systems in 1999. The first nine months
of  1999  included  $35.3  million  in  investments  in and  advances  to  these
companies.  Lastly,  the Company  received  $6.5  million in  payments  from its
participation  in the BEF note that was purchased  during 1998 with the proceeds
from the Limited  Partner's  IPO.  BEF made its final note  payment in May 2000.
With BEF's final payment, the Company's receivable relating to its participation
in the BEF note was extinguished.

         On March 8, 2000,  the Company's  offer of February 23, 2000 to buy the
remaining  88.5%  ownership  interests  in Dixie  from the  other  seven  owners
expired,  with no  interest  being  purchased.  On October 6, 2000,  the Company
announced that a subsidiary  had purchased an additional  3,521 shares of common
stock of Dixie from Conoco Pipe Line Company for  approximately  $19.4  million.
The purchase brings the Company's  economic  interest in Dixie to  approximately
19.9%.

         Cash  inflows  from  financing  activities  were $54.6  million in 2000
compared to $203.1  million in 1999.  Cash flows from  financing  activities are
primarily  affected by repayments of debt,  borrowings under debt agreements and
distributions  to partners.  The first nine months of 2000 include proceeds from
the $350 Million  Senior Notes and the $54 Million MBFC Loan and the  associated
repayments on the $200 Million Bank Credit Facility and $350 Million Bank Credit
Facility. For a complete discussion of the $350 Million Senior Notes and the $54
Million  MBFC Loan and the use of  proceeds  thereof,  see the  section  labeled
"Long-term  Debt" below.  Financing  activities  in 1999 include the  borrowings
associated  with the TNGL and MBA  acquisitions  and  outflows  of $4.7  million
related to the purchase of the Limited  Partner's Common Units by a consolidated
trust.  Distributions  increased to $104.4 million in 2000 from $82.2 million in
1999 primarily due to an increase in distributions to the Limited Partner.

         In July 2000, the Limited  Partner  announced a 1,000,000 Unit buy-back
program  of its  publicly-owned  Common  Units to be  executed  over a  two-year
period.  The redemption  program will be funded by increased cash  distributions


                                       25
<PAGE>

from the  Company.  The  Company  will fund the higher  distribution  rates from
operating cash flows and borrowings under its bank credit facilities. During the
third quarter of  2000, 17,200 Common Units  were  repurchased  by  the buy-back
program at a cost of approximately $0.5 million.

         Dividends received from unconsolidated affiliates. The Company received
$2.2 million in cash  distributions  from its cost method  investments  in Dixie
($0.4  million) and VESCO ($1.8  million)  during the third quarter of 2000. For
the nine months ended September 30, 2000, cash  distributions  were $1.1 million
from Dixie and $5.1 million from VESCO.  Cash  distributions  received  from the
Company's  cost  method  investments  are  recorded  as  "Dividend  income  from
unconsolidated  affiliates" in the Statements of Consolidated  Operations.  Both
Dixie and VESCO were acquired in August 1999 as part of the TNGL acquisition.

         Future Capital Expenditures

          The Company  estimates  that its share of currently  approved  capital
expenditures  in  the  projects  of  its   unconsolidated   affiliates  will  be
approximately  $1.7 million during the remainder of 2000 (including $0.7 million
for the BRPC propylene  fractionator) and $0.1 million in 2001. In addition, the
Company  forecasts that $48.2 million will be spent during the fourth quarter of
2000 on currently  approved  capital projects that will be recorded as property,
plant and equipment.  For 2001 and beyond,  this amount is projected to be $41.8
million. Of the cumulative $90.0 million forecast to be spent on property, plant
and equipment,  the most significant  projects and their remaining  expenditures
are as follows:
-    $ 18.8  million for the  Garyville,  Louisiana to Norco,  Louisiana  butane
     pipelines;
-    $ 12.9  million  for the  Port  Arthur,  Texas to Lake  Charles,  Louisiana
     propylene pipeline system;
-    $ 12.5  million  for  the  Venice,  Louisiana  to  Grande  Isle,  Louisiana
     pipeline;
-    $ 8.2 million for the Lou-Tex NGL Pipeline; and
-    $ 4.6 million for the Norco fractionator ethane liquefaction facility.
         As of September 30, 2000,  the Company had $13.7 million in outstanding
purchase commitments  attributable to its capital projects. Of this amount, $4.5
million is related to the  construction  of the  Lou-Tex NGL  Pipeline  and $0.6
million is associated with capital projects which will be recorded as additional
investments in unconsolidated affiliates.

         Long-term Debt

         Long-term  debt at September  30, 2000 was comprised of $350 million in
5-year  public  Senior Notes (the "$350 Million  Senior  Notes"),  a 10-year $54
million loan agreement with the Mississippi Business Finance Corporation ("MBFC"
and the "$54  Million  MBFC  Loan") and $50 million  outstanding  under the $350
Million Bank Credit  Facility.  The  issuance of the $350  Million  Senior Notes
represented a partial takedown of the $800 million  Registration  Statement that
was filed with the  Securities  and Exchange  Commission in December  1999.  The
proceeds  from the $350 Million  Senior Notes and the $54 Million MBFC Loan were
used to  extinguish  all  outstanding  balances owed under the $200 Million Bank
Credit  Facility and the $350  Million  Bank Credit  Facility at the time of the
offerings.

         The following table summarizes long-term debt at:
                                                September 30,       December 31,
                                                   2000                1999
                                              ---------------------------------
Borrowings under:
     $200 Million Bank Credit Facility                             $   129,000
     $350 Million Bank Credit Facility          $   50,000             166,000
     $350 Million Senior Notes                     350,000
     $54 Million MBFC Loan                          54,000
                                              ---------------------------------
            Total                                  454,000             295,000
Less current maturities of long-term debt           50,000             129,000
                                              ---------------------------------
            Long-term debt                      $  404,000         $   166,000
                                              =================================



                                       26
<PAGE>

         At  September  30,  2000,  the  Company  had a total of $40  million of
standby letters of credit  available of which  approximately  $13.3 million were
outstanding under letter of credit agreements with the banks.

         Bank Credit Facilities

         $200 Million Bank Credit  Facility.  In July 1998, the Company  entered
into a $200 million bank credit  facility  that  included a $50 million  working
capital  facility and a $150 million  revolving  credit  facility.  On March 15,
2000,  the Company used $169  million of the  proceeds  from the issuance of the
$350 Million Senior Notes to retire this credit  facility in accordance with its
agreement with the banks.

         $350 Million Bank Credit  Facility.  In July 1999, the Company  entered
into a $350 Million Bank Credit  Facility  that  includes a $50 million  working
capital facility and a $300 million revolving credit facility.  The $300 million
revolving  credit  facility  includes a sublimit  of $40  million for letters of
credit.  Borrowings  under  the $350  Million  Bank  Credit  Facility  will bear
interest  at  either  the  bank's  prime  rate or the  Eurodollar  rate plus the
applicable  margin as defined in the facility.  The Company elects the basis for
the interest rate at the time of each borrowing.

         This  facility  is  scheduled  to expire  in July 2001 and all  amounts
borrowed  thereunder  shall be due and  payable at that  time.  There must be no
amount   outstanding  under  the  working  capital  facility  for  at  least  15
consecutive  days during each fiscal year. In March 2000,  the Company used $179
million of the proceeds  from the issuance of the $350 Million  Senior Notes and
$47 million from the $54 Million MBFC Loan to payoff the outstanding  balance on
this credit facility.  Due to borrowings in the third quarter for investment and
working capital  purposes,  $50 million was  outstanding  under this facility at
September 30, 2000.

         The credit agreement  relating to this facility  contains a prohibition
on distributions to or purchases of Units of the Limited Partner if any event of
default is continuing.  In addition,  the bank credit facility  contains various
affirmative and negative covenants  applicable to the ability of the Company to,
among  other  things,  (i) incur  certain  additional  indebtedness,  (ii) grant
certain  liens,  (iii) sell assets in excess of certain  limitations,  (iv) make
investments,  (v) engage in  transactions  with affiliates and (vi) enter into a
merger,  consolidation,  or sale  of  assets.  The  credit  agreement  generally
prohibits   redemptions  of  the  Limited   Partner's  Units  except  for  those
transactions  related to the 1,000,000 Unit Buy-back  Program  announced in July
2000.  In August 2000,  the lenders and Company  executed a waiver  allowing for
this program.  The bank credit  facility  requires that the Company  satisfy the
following  financial  covenants at the end of each fiscal quarter:  (i) maintain
Consolidated  Tangible Net Worth (as defined in the bank credit  facility) of at
least $250.0  million,  (ii)  maintain a ratio of EBITDA (as defined in the bank
credit facility) to Consolidated Interest Expense (as defined in the bank credit
facility)  for the  previous  12-month  period  of at least 3.5 to 1.0 and (iii)
maintain a ratio of Total  Indebtedness (as defined in the bank credit facility)
to EBITDA of no more than 3.0 to 1.0.  The  Company was in  compliance  with the
restrictive covenants at September 30, 2000.

         As noted above, the Company is pursuing a refinancing  arrangement with
a group of banks to  terminate  this  facility  and  replace  it with a new $400
Million  Bank  Credit  Facility   (increasing  to  $500  million  under  certain
conditions). The completion of this refinancing project is subject to continuing
negotiations between the parties involved and is expected to be finalized during
the fourth quarter of 2000.

         Senior Notes and MBFC Loan

         $350 Million Senior Notes.  On March 13, 2000, the Company  completed a
public offering of $350 million in principal amount of 8.25%  fixed-rate  Senior
Notes due March 15, 2005 at a price to the public of 99.948% per Senior Note. In
the offering,  the Company received proceeds,  net of underwriting discounts and
commissions,  of approximately $347.7 million. The proceeds were used to pay (a)
the entire $169 million  outstanding  principal balance on the $200 Million Bank
Credit  Facility  and (b) $179  million  of the $226  million  then  outstanding
principal balance on the $350 Million Bank Credit Facility.

         The notes are subject to a make-whole  redemption right by the Company.
They are an  unsecured  obligation  of the  Company  and rank  equally  with its
existing and future unsecured and unsubordinated  indebtedness and senior to any
future  subordinated  indebtedness.  The notes  are  guaranteed  by the  Limited


                                       27
<PAGE>

Partner through an unsecured and unsubordinated  guarantee and were issued under
an indenture containing certain restrictive covenants.  These covenants restrict
the ability of the Limited Partner and the Company, with certain exceptions,  to
incur debt secured by liens and engage in sale and leaseback  transactions.  The
Limited Partner and Company were in compliance with these restrictive  covenants
at September 30, 2000.

         Settlement  was  completed on March 15, 2000.  The offering of the $350
Million  Senior Notes was a takedown  under the Company's and Limited  Partner's
$800  million  Registration  Statement;  therefore,  the  amount  of  securities
available under the Registration Statement is reduced to $450 million.

         $54 Million MBFC Loan.  On March 27, 2000,  the Company  executed a $54
million loan  agreement  with the MBFC which was funded by the proceeds from the
sale of Revenue  Bonds by the MBFC.  The  Revenue  Bonds  issued by the MBFC are
10-year  bonds  with a  maturity  date of  March 1,  2010 and bear a  fixed-rate
interest coupon of 8.70 percent.  The Company received proceeds from the sale of
the  Revenue  Bonds,  net  of  underwriting   discounts  and   commissions,   of
approximately  $53.6  million.  The proceeds  were used to pay the remaining $47
million  then  outstanding  principal  balance on the $350  Million  Bank Credit
Facility and for working  capital and other  general  partnership  purposes.  In
general,  the proceeds of the Revenue  Bonds were used to reimburse  the Company
for costs it incurred in acquiring and constructing the Pascagoula,  Mississippi
natural gas processing plant.

         The Revenue  Bonds were  issued at par and are subject to a  make-whole
redemption right by the Company. The Revenue Bonds are guaranteed by the Limited
Partner through an unsecured and  unsubordinated  guarantee.  The loan agreement
contains certain covenants including maintaining appropriate levels of insurance
on the Pascagoula  natural gas processing  facility and  restrictions  regarding
mergers.  The Company was in  compliance  with these  restrictive  covenants  at
September 30, 2000.

         Interest Rate Swaps. The Company's  interest rate exposure results from
variable-rate   borrowings  from  commercial  banks  and  fixed-rate  borrowings
pursuant to the $350 Million  Senior  Notes and the $54 Million  MBFC Loan.  The
company  manages its exposure to changes in interest  rates in its  consolidated
debt  portfolio by utilizing  interest  rate swaps.  An interest  rate swap,  in
general, requires one party to pay a fixed-rate on the notional amount while the
other party pays a floating-rate based on the notional amount.

         In March 2000,  after the issuance of the $350 Million Senior Notes and
the execution of the $54 Million MBFC Loan,  100% of the Company's  consolidated
debt were fixed-rate  obligations.  To maintain a balance between  variable-rate
and fixed-rate exposure,  the Company entered into interest rate swap agreements
with a notional  amount of $154 million by which the Company  receives  payments
based on a fixed-rate and pays an amount based on a floating-rate.  At September
30, 2000, the Company's  consolidated debt portfolio  interest rate exposure was
55 percent fixed and 45 percent  floating,  after  considering the effect of the
interest rate swap agreements.  The notional amount does not represent  exposure
to credit loss. The Company monitors its positions and the credit ratings of its
counterparties.  Management believes the risk of incurring a credit related loss
is remote, and that if incurred, such losses would be immaterial.

         The effect of these swaps (none of which are leveraged) was to decrease
the  Company's  interest  expense by $0.4 million and $0.9 million for the three
and nine months ended September 30, 2000, respectively.  For further information
regarding  the interest  rate swaps,  see Note 9 of the  unaudited  Notes to the
Consolidated Financial Statements.

MTBE Facility

         The Company owns a 33.33% economic interest in the BEF partnership that
owns the MTBE  production  facility  located  within the Company's  Mont Belvieu
complex.  The production of MTBE is driven by oxygenated  fuels programs enacted
under the federal Clean Air Act  Amendments of 1990 and other  legislation.  Any
changes to these programs that enable  localities to opt out of these  programs,
lessen the requirements  for oxygenates or favor the use of non-isobutane  based
oxygenated  fuels reduce the demand for MTBE and could have an adverse effect on
the Company's results of operations.

         In recent years,  MTBE has been detected in water  supplies.  The major
source of the ground water  contamination  appears to be leaks from  underground
storage  tanks.  Although  these  detections  have  been  limited  and the great


                                       28
<PAGE>

majority  of these  detections  have been  well  below  levels of public  health
concern,  there have been  actions  calling for the  phase-out  of MTBE in motor
gasoline in various federal and state governmental agencies.

         In  light  of  these   developments,   the  Company  is  formulating  a
contingency   plan  for  use  of  the  BEF  facility  if  MTBE  were  banned  or
significantly  curtailed.  Management is exploring a possible  conversion of the
BEF  facility  from MTBE  production  to  alkylate  production.  At present  the
forecast  cost of this  conversion  would be in the $20  million to $25  million
range,  with the Company's share being $6.7 million to $8.3 million.  Management
anticipates that if MTBE is banned alkylate demand will rise as producers use it
to replace MTBE as an octane enhancer.  Alkylate production would be expected to
generate  spot market  margins  comparable  to those of MTBE.  Greater  alkylate
production would be expected to increase  isobutane  consumption  nationwide and
result in improved isomerization margins for the Company.

         Sun, the MTBE facility's major customer and one of the partners of BEF,
has entered into a contract with BEF to take all of the MTBE production  through
September 2004.

Year 2000 Readiness Disclosure

         The Company's  efforts at preparing  its computer  systems for the Year
2000 were successful and no significant problems were encountered. The Year 2000
Readiness team reported that all systems functioned properly as the date changed
from  December 31, 1999 to January 1, 2000.  The Company is also pleased to note
that no problems  were reported to it by its customers or vendors as a result of
the Year 2000 issue.  The Company  continues  to be vigilant in  monitoring  its
systems for any potential  Year 2000 problems that may arise in the  short-term.
There is no  assurance  that  residual  Year 2000  issues  will not arise in the
future  which  could have a material  adverse  effect on the  operations  of the
Company.

Accounting Standards

         In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff  Accounting  Bulletin  ("SAB") No. 101 " Revenue  Recognition in Financial
Statements."  SAB 101  summarizes  certain  of the  staff's  views  in  applying
generally  accepted  accounting  principles to revenue  recognition in financial
statements. On June 26, 2000, the SEC issued an amendment to SAB 101 effectively
delaying its  implementation  until the fourth quarter of fiscal years beginning
after December 15, 1999. The Company  believes that the adoption of SAB 101 will
not have a material effect on its results of operations.

         In June 1999, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 137,  "Accounting for
Derivative Instruments and Hedging  Activities-Deferral of the Effective Date of
FASB Statement No. 133-an amendment of FASB Statement No. 133" which effectively
delays the application of SFAS No. 133  "Accounting  for Derivative  Instruments
and Hedging  Activities"  for one year, to fiscal years beginning after June 15,
2000.  In June 2000,  the FASB  issued  SFAS No.  138,  "Accounting  for Certain
Derivative  Instruments  and Certain  Hedging  Activities - an amendment of FASB
Statement No. 133" which amends and supercedes various sections of SFAS No. 133.


Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The Company is exposed to financial market risks,  including changes in
interest rates with respect to a portion of its debt  obligations and changes in
commodity prices.  The Company may use derivative  financial  instruments (i.e.,
futures,  forwards, swaps, options, and other financial instruments with similar
characteristics)  to mitigate  these risks.  The Company does not use derivative
financial instruments for speculative (or trading) purposes.

         The Company  adopted a  commercial  policy to manage  exposures  to the
risks  generated by the NGL  businesses  acquired in the TNGL  acquisition.  The
objective of the policy is to assist the Company in achieving its  profitability
goals while maintaining a portfolio of conservative  risk,  defined as remaining
with the position  limits  established  by the Board of Directors of the General
Partner.  The Company  will enter into risk  management  transactions  to manage
price  risk,  basis  risk,  physical  risk or  other  risks  related  to  energy


                                       29
<PAGE>

commodities on both a short-term (less than 30 days) and long-term basis, not to
exceed 18 months.  The General  Partner has  established a Risk  Committee  (the
"Committee") that will oversee overall  strategies  associated with physical and
financial risks. The Committee will approve specific  commercial policies of the
Company subject to this policy,  including authorized products,  instruments and
markets. The Committee is also charged with establishing specific guidelines and
procedures for implementing the policy and ensuring compliance with the policy.

Interest rate risk

         Variable-rate  Debt. At September  30, 2000 and December 31, 1999,  the
Company had no derivative  instruments in place to cover any potential  interest
rate risk on its  variable-rate  debt  obligations.  Variable interest rate debt
obligations do expose the Company to possible  increases in interest expense and
decreases in earnings if interest  rates were to rise.  The Company's  long-term
debt  associated  with the $350  Million  Bank  Credit  Facility  is at variable
interest rates.  At September 30, 2000, $50 million was  outstanding  under this
credit facility.

         If  the  weighted   average  base  interest   rates   selected  on  the
variable-rate  long-term  debt during 1999 were to have been 10% higher than the
weighted average of the actual base interest rates selected, assuming no changes
in weighted average variable debt levels,  interest expense would have increased
by approximately  $1.4 million with a corresponding  decrease in earnings before
minority  interest.  If the same calculation were performed on the variable-rate
long-term debt outstanding during 2000, interest expense would have increased by
approximately  $0.5 million  with a  corresponding  decrease in earnings  before
minority interest.

         Fixed rate Debt. In March 2000, the Company  entered into interest rate
swaps whereby the fixed-rate of interest on a portion of the $350 Million Senior
Notes and the $54 Million MBFC Loan was effectively  swapped for  floating-rates
tied to the six month London  Interbank  Offering Rate ("LIBOR").  Interest rate
swaps are used to manage the Company's exposure to changes in interest rates and
to lower overall costs of financing. An interest rate swap, in general, requires
one party to pay a fixed-rate on the notional  amount while the other party pays
a floating-rate based on the notional amount.

         After the issuance of the $350 Million  Senior Notes and the  execution
of the $54 Million MBFC Loan in March 2000,  100% of the Company's  consolidated
debt were fixed-rate  obligations.  To maintain a balance between  variable-rate
and fixed-rate exposure,  the Company entered into interest rate swap agreements
with a notional  amount of $154 million by which the Company  receives  payments
based on a fixed-rate and pays an amount based on a floating-rate.  At September
30, 2000, the Company's  consolidated debt portfolio  interest rate exposure was
55 percent fixed and 45 percent  floating,  after  considering the effect of the
interest rate swap agreements.  The notional amount does not represent  exposure
to credit loss. The Company monitors its positions and the credit ratings of its
counterparties.  Management believes the risk of incurring a credit related loss
is remote, and that if incurred, such losses would be immaterial.



                                       30
<PAGE>

         The effect of these swaps (none of which are leveraged) was to decrease
the  Company's  interest  expense by $0.4 million and $0.9 million for the three
and nine months ended  September 30, 2000,  respectively.  Following is selected
information on the Company's portfolio of interest rate swaps at June 30, 2000:

Interest Rate Swap Portfolio at September 30, 2000 (1) :
(Dollars in millions)
                                             Early             Fixed /
     Notional                             Termination         Floating
     Amount      Period Covered             Date (2)          Rate (3)
--------------------------------------------------------------------------------

      $ 50.0 March 2000 - March 2005        March 2001         8.25% / 7.3100%
      $ 50.0 March 2000 - March 2005        March 2001         8.25% / 7.3150%
      $ 54.0 March 2000 - March 2010        March 2003         8.70% / 7.6575%

Notes:
(1)  All swaps  outstanding  at  September  30, 2000 were  entered  into for the
     purpose of  managing  the  Company's  exposure  to  fluctuations  in market
     interest rates.
(2)  In each case,  the  counterparty  has the option to terminate  the interest
     rate swap on the Early Termination Date
(3)  In each case, the Company is the floating-rate payor. The floating rate was
     the rate in effect as of September 30, 2000.

         If the six month  LIBOR  rates on the  notional  amounts of  fixed-rate
long-term  debt at September  30, 2000 were to have been 10% higher than the six
month LIBOR rates actually used in the swap  agreements,  assuming no changes in
weighted average fixed-rate debt levels, interest expense for the three and nine
months  ended  September  30, 2000 would have  increased by  approximately  $0.3
million  and  $0.5  million,  respectively,  with a  corresponding  decrease  in
earnings before minority interest.

         Other.  At September  30, 2000 and  December 31, 1999,  the Company had
$40.0  million  and  $5.2  million  invested  in  cash  and  cash   equivalents,
respectively. All cash equivalent investments other than cash are highly liquid,
have original  maturities of less than three months,  and are considered to have
insignificant interest rate risk.

Commodity price risk

         The  Company  is  exposed  to  commodity  price  risk  through  its NGL
businesses acquired in the TNGL acquisition. In order to effectively manage this
risk, the Company may enter into swaps, forwards, commodity futures, options and
other derivative  commodity  instruments with similar  characteristics  that are
permitted  by contract or business  custom to be settled in cash or with another
financial  instrument.  The purpose of these risk  management  activities  is to
hedge  exposure to price risks  associated  with natural  gas, NGL  inventories,
commitments and certain anticipated  transactions.  The table below presents the
hypothetical  changes in fair values arising from immediate  selected  potential
changes  in  the  quoted  market  prices  of  derivative  commodity  instruments
outstanding  at December 31, 1999 and September 30, 2000.  Gain or loss on these
derivative commodity instruments would be offset by a corresponding gain or loss
on the hedged commodity positions, which are not included in the table. The fair
value of the  commodity  futures at December 31, 1999 and September 30, 2000 was
estimated at $0.5 million  payable and $ 3.5 million  receivable,  respectively,
based on quoted market prices of comparable  contracts and  approximate the gain
or loss that would have been  realized if the  contracts had been settled at the
balance  sheet date.  The change in fair value of the  commodity  futures  since
December 31, 1999 is primarily due to an increase in volumes  hedged,  change in
composition of commodities  hedged and higher natural gas prices.  The change in
fair value between  September 30, 2000 and November 1, 2000 is due to the change
in the composition of commodities hedged and settlement of November 2000 natural
gas future contracts.



                                       31
<PAGE>

<TABLE>
<CAPTION>
(Millions of Dollars)                 No Change             10% Increase                   10% Decrease
                                      ---------             ------------                   ------------
   Impact of changes in quoted          Fair            Fair         Increase          Fair          Increase
        Market prices on:               Value          Value        (Decrease)         Value        (Decrease)
------------------------------------------------------------------------------------------------------------------

Commodity futures
<S>                                   <C>            <C>            <C>              <C>             <C>
       At December 31, 1999           $  (0.5)       $   1.2        $   1.7          $  (2.2)        $  (1.7)
       At September 30, 2000          $   3.5        $   4.0        $  (0.5)         $   3.1         $  (0.4)
       At November 1, 2000            $   2.2        $   4.2        $   2.0          $    .2         $  (2.0)
</TABLE>


PART II.    OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a)     Exhibits

*1.1    Underwriting  Agreement dated March 10, 2000, among Enterprise  Products
        Partners L.P.,  Enterprise  Products  Operating L.P.,  Chase  Securities
        Inc., Lehman Brothers Inc., Banc One Capital Markets,  Inc., FleetBoston
        Robertson  Stephens Inc., First Union  Securities,  Inc., Scotia Capital
        (USA) Inc. and SG Cowen Securities Corp.  (Exhibit 1.1 on Form 8-K filed
        March 10, 2000).

*3.1    Form of  Amended  and  Restated  Agreement  of  Limited  Partnership  of
        Enterprise Products Partners L.P. (Exhibit 3.1 to Registration Statement
        on Form S-1, File No. 333-52537, filed on May 13, 1998).

*3.2    Form of  Amended  and  Restated  Agreement  of  Limited  Partnership  of
        Enterprise   Products   Operating  L.P.  (Exhibit  3.2  to  Registration
        Statement on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

*3.3    LLC  Agreement of  Enterprise  Products GP (Exhibit 3.3 to  Registration
        Statement on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

*3.4    Second  Amended  and  Restated  Agreement  of  Limited   Partnership  of
        Enterprise Products Partners L.P. dated September 17, 1999. (The Company
        incorporates  by reference the above  document  included in the Schedule
        13D filed September 27, 1999 by Tejas Energy LLC ; filed as Exhibit 99.7
        on Form 8-K dated October 4, 1999).

*3.5    First  Amended and  Restated  Limited  Liability  Company  Agreement  of
        Enterprise  Products GP, LLC dated September 17, 1999.  (Exhibit 99.8 on
        Form 8-K/A-1 filed October 27, 1999).

3.6     Amendment  No. 1 to Second  Amended and  Restated  Agreement  of Limited
        Partnership of Enterprise Products Partners L.P. dated June 9, 2000.

*4.1    Form of Common Unit certificate  (Exhibit 4.1 to Registration  Statement
        on Form S-1/A, File No. 333-52537, filed on July 21, 1998).

*4.2    $200 million Credit Agreement among Enterprise  Products Operating L.P.,
        the Several Banks from Time to Time Parties Hereto, Den Norske Bank ASA,
        and Bank of Tokyo-Mitsubishi,  Ltd., Houston Agency as Co-Arrangers, The
        Bank of Nova Scotia,  as Co-Arranger and as Documentation  Agent and The
        Chase  Manhattan Bank as  Co-Arranger  and as Agent dated as of July 27,
        1998 as Amended and Restated as of September  30, 1998.  (Exhibit 4.2 on
        Form 10-K for year ended December 31, 1998, filed March 17, 1999).

*4.3    First  Amendment to $200 million  Credit  Agreement  dated July 28, 1999
        among Enterprise  Products Operating L.P. and the several banks thereto.
        (Exhibit 99.9 on Form 8-K/A-1 filed October 27, 1999).



                                       32
<PAGE>

*4.4    $350 million Credit Agreement among Enterprise  Products Operating L.P.,
        BankBoston,  N.A.,  Societe  Generale,  Southwest Agency and First Union
        National Bank, as Co-Arrangers, The Chase Manhattan Bank, as Co-Arranger
        and as  Administrative  Agent,  The First  National Bank of Chicago,  as
        Co-Arranger  and as  Documentation  Agent,  The Bank of Nova Scotia,  as
        Co-Arranger  and Syndication  Agent,  and the Several Banks from Time to
        Time parties hereto with First Union Capital  Markets acting as Managing
        Agent and Chase Securities Inc. acting as Lead Arranger and Book Manager
        dated July 28, 1999  (Exhibit  99.10 on Form 8-K/A-1  filed  October 27,
        1999).

*4.5    Unitholder  Rights  Agreement  among Tejas Energy LLC,  Tejas  Midstream
        Enterprises, LLC, Enterprise Products Partners L.P., Enterprise Products
        Operating L.P., Enterprise Products Company, Enterprise Products GP, LLC
        and EPC  Partners  II, Inc.  dated  September  17,  1999.  (The  Company
        incorporates  by reference the above  document  included in the Schedule
        13D filed  September 27, 1999 by Tejas Energy LLC; filed as Exhibit 99.5
        on Form 8-K dated October 4, 1999).

*4.6    Form of Indenture dated as of March 15, 2000, among Enterprise  Products
        Operating  L.P.,  as  Issuer,  Enterprise  Products  Partners  L.P.,  as
        Guarantor,  and First Union National  Bank, as Trustee.  (Exhibit 4.1 on
        Form 8-K filed March 10, 2000).

*4.7    Form of  Global  Note  representing  all  8.25%  Senior  Notes Due 2005.
        (Exhibit 4.2 on Form 8-K filed March 10, 2000).

*4.8    Second  Amendment,  dated as of January 24, 2000, to $200 Million Credit
        Agreement  dated as of July 27,  1998,  as Amended  and  Restated  as of
        September 30, 1998,  among  Enterprise  Products  Operating L.P. and the
        several banks thereto. (Exhibit 4.3 on Form 8-K filed March 10, 2000).

*4.9    First  Amendment,  dated as of January 24, 2000, to $350 Million  Credit
        Agreement among Enterprise  Products Operating L.P.,  BankBoston,  N.A.,
        Societe  Generale,  Southwest  Agency and First Union  National Bank, as
        Co-Arrangers,   The  Chase   Manhattan   Bank,  as  Co-Arranger  and  as
        Administrative Agent, BankOne N.A., as Co- Arranger and as Documentation
        Agent, The Bank of Nova Scotia, as Co-Arranger and as Syndication Agent,
        and the  several  Banks from time to time  parties  thereto,  with First
        Union Capital Markets acting as Managing Agent and Chase Securities Inc.
        acting as Lead Arranger and Manager dated as of July 28, 1999.  (Exhibit
        4.4 on Form 8-K filed March 10, 2000).

*4.10   Second  Amendment,  dated as of March 7, 2000,  to $350  Million  Credit
        Agreement among Enterprise  Products Operating L.P.,  BankBoston,  N.A.,
        Societe  Generale,  Southwest  Agency and First Union  National Bank, as
        Co-Arrangers,   The  Chase   Manhattan   Bank,  as  Co-Arranger  and  as
        Administrative Agent, BankOne N.A., as Co- Arranger and as Documentation
        Agent, The Bank of Nova Scotia, as Co-Arranger and as Syndication Agent,
        and the  several  Banks from time to time  parties  thereto,  with First
        Union Capital Markets acting as Managing Agent and Chase Securities Inc.
        acting as Lead Arranger and Manager dated as of July 28, 1999.  (Exhibit
        4.5 on Form 8-K filed March 10, 2000).

*4.11   Guaranty  Agreement,  dated as of March 7, 2000, by Enterprise  Products
        Partners L.P. in favor of The Chase  Manhattan  Bank, as  Administrative
        Agent, with respect to the $350 Million Credit Agreement  referred to in
        Exhibits 4.4 and 4.5. (Exhibit 4.6 on Form 8-K filed March 10, 2000).

4.12    Waiver Agreement,  dated as of August 25, 2000, regarding Section 6.5 of
        the $350 Million Credit  Agreement among Enterprise  Products  Operating
        L.P.,  BankBoston,  N.A.,  Societe Generale,  Southwest Agency and First
        Union  National  Bank, as  Co-Arrangers,  The Chase  Manhattan  Bank, as
        Co-Arranger and as Administrative  Agent,  BankOne N.A., as Co- Arranger
        and as Documentation  Agent, The Bank of Nova Scotia, as Co-Arranger and
        as  Syndication  Agent,  and the several Banks from time to time parties
        thereto,  with First Union Capital  Markets acting as Managing Agent and
        Chase  Securities  Inc.  acting as Lead Arranger and Manager dated as of
        July 28, 1999.

*10.1   Articles  of  Merger  of  Enterprise  Products  Company,   HSC  Pipeline
        Partnership,  L.P., Chunchula Pipeline Company,  LLC, Propylene Pipeline
        Partnership,  L.P., Cajun Pipeline Company,  LLC and Enterprise Products
        Texas  Operating L.P.  dated June 1, 1998 (Exhibit 10.1 to  Registration
        Statement on Form S-1/A, File No: 333-52537, filed on July 8, 1998).



                                       33
<PAGE>

*10.2   Form  of EPCO  Agreement  between  Enterprise  Products  Partners  L.P.,
        Enterprise  Products  Operating  L.P.,  Enterprise  Products GP, LLC and
        Enterprise  Products Company (Exhibit 10.2 to Registration  Statement on
        Form S-1/A, File No. 333-52537, filed on July 21, 1998).

*10.3   Transportation  Contract between Enterprise  Products Operating L.P. and
        Enterprise  Transportation  Company  dated June 1, 1998 (Exhibit 10.3 to
        Registration Statement on Form S-1/A, File No. 333-52537,  filed on July
        8, 1998).

*10.4   Venture Participation  Agreement between Sun Company, Inc. (R&M), Liquid
        Energy  Corporation  and Enterprise  Products  Company dated May 1, 1992
        (Exhibit 10.4 to Registration Statement on Form S-1, File No. 333-52537,
        filed on May 13, 1998).

*10.5   Partnership  Agreement  between  Sun  BEF,  Inc.,  Liquid  Energy  Fuels
        Corporation and Enterprise  Products  Company dated May 1, 1992 (Exhibit
        10.5 to Registration Statement on Form S-1, File No. 333-52537, filed on
        May 13, 1998).

*10.6   Amended  and  Restated   MTBE   Off-Take   Agreement   between   Belvieu
        Environmental  Fuels and Sun Company,  Inc.  (R&M) dated August 16, 1995
        (Exhibit 10.6 to Registration Statement on Form S-1, File No. 333-52537,
        filed on May 13, 1998).

*10.7   Articles of Partnership of Mont Belvieu  Associates  dated July 17, 1985
        (Exhibit 10.7 to Registration Statement on Form S-1, File No. 333-52537,
        filed on May 13, 1998).

*10.8   First  Amendment to Articles of Partnership  of Mont Belvieu  Associates
        dated July 15, 1996 (Exhibit 10.8 to Registration Statement on Form S-1,
        File No. 333-52537, filed on May 13, 1998). *10.9 Propylene Facility and
        Pipeline Agreement between Enterprise Petrochemical Company and Hercules
        Incorporated  dated  December  13, 1978  (Exhibit  10.9 to  Registration
        Statement on Form S-1, File No. 333-52537, dated May 13, 1998).

*10.10  Restated  Operating   Agreement  for  the  Mont  Belvieu   Fractionation
        Facilities  Chambers County,  Texas between Enterprise Products Company,
        Texaco  Producing  Inc.,  El  Paso  Hydrocarbons  Company  and  Champlin
        Petroleum  Company  dated July 17, 1985 (Exhibit  10.10 to  Registration
        Statement on Form S-1/A, File No. 333-52537, filed on July 8, 1998).

*10.11  Ratification and Joinder Agreement  relating to Mont Belvieu  Associates
        Facilities between Enterprise  Products Company,  Texaco Producing Inc.,
        El Paso  Hydrocarbons  Company,  Champlin  Petroleum  Company  and  Mont
        Belvieu  Associates  dated July 17, 1985 (Exhibit 10.11 to  Registration
        Statement on Form S-1/A, File No. 333-52537, filed on July 8, 1998).

*10.12  Amendment to Propylene  Facility and Pipeline  Sales  Agreement  between
        HIMONT  U.S.A.,  Inc. and Enterprise  Products  Company dated January 1,
        1993 (Exhibit 10.12 to  Registration  Statement on Form S-1/A,  File No.
        333-52537, filed on July 8, 1998).

*10.13  Amendment to Propylene  Facility and Pipeline  Agreement  between HIMONT
        U.S.A.,  Inc. and  Enterprise  Products  Company  dated  January 1, 1995
        (Exhibit  10.13  to  Registration  Statement  on Form  S-1/A,  File  No.
        333-52537, filed on July 8, 1998).

*10.14  Fourth  Amendment to Conveyance of Gas  Processing  Rights between Tejas
        Natural Gas Liquids,  LLC and Shell Oil  Company,  Shell  Exploration  &
        Production  Company,  Shell Offshore Inc.,  Shell Deepwater  Development
        Inc.,  Shell Land & Energy  Company  and Shell  Frontier  Oil & Gas Inc.
        dated August 1, 1999.  (Exhibit 10.14 to Form 10-Q filed on November 15,
        1999).



                                       34
<PAGE>

*10.15  Purchase  and  Sale  Agreement  by and  between  Coral  Energy,  LLC and
        Enterprise  Products  Operating  L.P.  dated as of  September  22,  2000
        (Exhibit 10.1 to Form 8-K filed on September 26, 2000).

*12.1   Computation  of ratio of  earnings  to fixed  charges for the year ended
        December 31, 1999. (Exhibit 12.1 on Form 8-K filed March 10, 2000).

*25.1   Statement of Eligibility and Qualification under the Trust Indenture Act
        of 1939 on Form T-1 of First Union National Bank.  (Exhibit 25.1 on Form
        8-K filed March 10, 2000).

*99.1   Contribution   Agreement  between  Tejas  Energy  LLC,  Tejas  Midstream
        Enterprises, LLC, Enterprise Products Partners L.P., Enterprise Products
        Operating L.P., Enterprise Products Company, Enterprise Products GP, LLC
        and EPC  Partners  II, Inc.  dated  September  17,  1999.  (The  Company
        incorporates  by reference the above  document  included in the Schedule
        13D filed  September 27, 1999 by Tejas Energy LLC; filed as Exhibit 99.4
        on Form 8-K dated October 4, 1999).

*99.2   Registration  Rights  Agreement  between Tejas Energy LLC and Enterprise
        Products   Partners  L.P.  dated   September  17,  1999.   (The  Company
        incorporates  by reference the above  document  included in the Schedule
        13D filed September 27, 1999 by Tejas Energy LLC ; filed as Exhibit 99.6
        on Form 8-K dated October 4, 1999).

27.1    Financial Data Schedule

* Asterisk indicates exhibits incorporated by reference as indicated;  all other
exhibits are filed herewith

         (b) Reports on Form 8-K

         On September 25, 2000, the Company filed a Form 8-K announcing  that it
has executed a definitive  agreement  to purchase  Acadian Gas, LLC  ("Acadian")
from Coral Energy,  LLC, an affiliate of Shell Oil Company,  for $226 million in
cash,  inclusive  of working  capital.  The  acquisition  of Acadian  integrates
natural gas pipeline  systems in South  Louisiana  with the Company's Gulf Coast
natural gas  processing  and NGL  fractionation,  pipeline  and storage  system.
Acadian's  assets are comprised of the 438-mile  Acadian,  577-mile  Cypress and
27-mile  Evangeline  natural gas pipeline systems,  which together have over one
billion  cubic feet  ("Bcf") per day of  capacity.  These  natural gas  pipeline
systems are wholly-owned by Acadian with the exception of the Evangeline  system
in which  Acadian  holds an  approximate  49.5%  economic  interest.  The system
includes a leased natural gas storage facility at Napoleonville,  Louisiana with
3.4 Bcf of  capacity.  Completion  of this  transaction  is  subject  to certain
conditions,  including  regulatory  approvals.  The  purchase  is expected to be
completed in the fourth quarter of 2000.


                                       35
<PAGE>

                                   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.

                                            Enterprise Products Operating L.P.
                                            (A Delaware Limited Partnership)

                                            By:   Enterprise Products GP, LLC
                                                  as General Partner

Date:   November 13, 2000                         /s/  Michael J. Knesek
                                                  -----------------------------
                                                  Vice President, Controller and
                                                  Principal Accounting Officer
<PAGE>
                       ENTERPRISE PRODUCTS OPERATING L.P.

August 15, 2000


The Chase Manhattan Bank
270 Park Avenue, Floor 21
New York, New York 10017

Attn: Mr.  Steve Wood

Re:   Requested Waiver - Enterprise Products Operating L.P. ("Company") Credit
      Agreement dated as of July 28, 1999, as amended ("Credit Agreement")

Dear Steve:

         This  letter  ("Waiver  Letter")  is to seek a waiver  from  The  Chase
Manhattan Bank, as  Administrative  Agent ("Agent") under the Credit  Agreement,
and the Required Banks  thereunder as set forth herein.  All  capitalized  terms
used herein as definitions,  but not defined  herein,  are defined in the Credit
Agreement.

         As has been disclosed to you,  Enterprise Products Partners L.P. ("LP")
intends to  initiate a buy-back  program  (the  "Program")  whereby  LP,  over a
two-year time period,  would buy back up to 1,000,000  publically held Units, as
set forth in our letter of August 14,  2000 to Bill  Manias at Chase  Securities
Inc. on this  subject.  Under Section 7.5 of the Credit  Agreement,  the Company
would be  prohibited  from making  Restricted  Payments  consisting of up-stream
dividends  to LP to fund  the  Program,  and the LP  would  be  prohibited  from
conducting the Program under Section 8.1(n)(c) of the Credit Agreement.

         By signing  below,  the Agent and the Required  Banks  hereby  evidence
their  consent to a one- time waiver (i) under said Section 7.5 in order for the
Company to make  Restricted  Payments  consisting  of up-stream  dividends to LP
necessary to fund the Program and (ii) under said Section 8.1(n)(c) in order for
the LP to conduct the Program, which dividends and Program would be permitted as
long as no Default or Event of Default has occurred and is continuing  under the
Credit Agreement either before or occasioned by any such Restricted  Payment. In
addition,  the  waiver  evidenced  by this  letter  is a  one-time  event and is
permitted only through August 25, 2002. Henceforth,  the Company shall not be in
Default under the Credit Agreement,  including without  limitation  Sections 7.5
and  8.1(n)(c)  of the  Credit  Agreement,  solely by  reason of any  Restricted
Payment  consisting  of up-stream  dividends to LP prior to August 26, 2002 made
consistent  with  this  Waiver  Letter  or by the LP's  conducting  the  Program
consistent with this Waiver Letter.


<PAGE>



         Kindly  indicate  the  aforementioned  consent to waiver by signing and
returning a copy of this letter to the attention to the undersigned.

                                    Sincerely,




                                    ENTERPRISE PRODUCTS OPERATING L.P.

                           By:      Enterprise Products GP, LLC, General Partner

                                    By:    /s/ Richard H. Bachmann
                                           ----------------------------------
                                    Name:  Richard H. Bachmann
                                    Title: Executive Vice President &
                                           Chief Legal Officer


         Agreed to and Accepted as of the 25th day of August, 2000.

                                    BANKS AND AGENTS:
                                    ----------------


                                    THE CHASE MANHATTAN BANK, as
                                    Administrative Agent and as a Bank


                                    By:    /s/ Steven Wood
                                           ----------------------------------
                                    Name:  Steven Wood
                                    Title: Vice President



                                     BANK  ONE, NA (formerly known as The First
                                     National Bank of Chicago), as Documentation
                                     Agent and as a Bank

                                     By:    /s/ Dianne L. Russell
                                            ---------------------------------
                                     Name:  Dianne L. Russell
                                     Title: Vice President



                                     THE BANK OF NOVA SCOTIA, as Syndication
                                     Agent and as a Bank

                                     By:    /s/ F.C.H. Ashby
                                            ---------------------------------
                                     Name:  F.C.H. Ashby
                                     Title: Sr. Mgr. Loan Operations



                                      FIRST UNION NATIONAL BANK

                                      By:    /s/ Russell Clingman
                                             --------------------------------
                                      Name:  Russell Clingman
                                      Title: Vice President



                                      SOCIETE GENERALE, SOUTHWEST AGENCY

                                      By:    /s/ Paul E. Cornell
                                             --------------------------------
                                      Name:  Paul E. Cornell
                                      Title: Managing Director



                                       FLEET NATIONAL BANK.

                                       By:    /s/ Christopher Holmgre
                                              -------------------------------
                                       Name:  Christopher Holmgren
                                       Title: Director



                                       THE FUJI BANK, LIMITED, NEW YORK BRANCH

                                       By:    /s/ Nate Elllis
                                              -------------------------------
                                       Name:  Nate Ellis
                                       Title: Senior Vice President & Manager



                                       BANK OF TOKYO-MITSUBISHI, LTD.,
                                       HOUSTON AGENCY

                                       By:    /s/ Michael G. Meis
                                              -------------------------------
                                       Name:  Michael G. Meiss
                                       Title:  Vice President



                                       TORONTO DOMINION (TEXAS), INC.

                                       By:    /s/  Alva J. Jones
                                              -------------------------------
                                       Name:  Alva J. Jones
                                       Title: Vice President



                                       CREDIT AGRICOLE INDOSUEZ

                                       By:    /s/ Patrick Cocquerel
                                              -------------------------------
                                       Name:  Patick Cocquerel
                                       Title: FVP, Managing Director

                                       By:    /s/ Douglas A. Whiddon
                                              -------------------------------
                                       Name:  Douglas A. Whiddon
                                       Title: Senior Relationship Manager



                                       DG BANK DEUTSCHE GENOSSEN
                                       SCHAFTBANK AG, CAYMAN ISLAND BRANCH

                                       By:    /s/ Craig Anderson
                                              -------------------------------
                                       Name:  Craig Anderson
                                       Title: Vice President


                                       By:    /s/ Lynne McCarthy
                                              -------------------------------
                                       Name:  Lynne McCarthy
                                       Title: Vice President



                                       CREDIT LYONNAIS NEW YORK BRANCH

                                       By:     /s/ illegible signature
                                               -------------------------------
                                       Name:
                                       Title:



                                       FORTIS CAPITAL CORP.

                                        By:    /s/ Darrell W. Holley
                                               ------------------------------
                                        Name:  Darrell W. Holley
                                        Title: Managing Director



                                        HIBERNIA NATIONAL BANK

                                        By:    /s/ Trudy W. Nelson
                                               ------------------------------
                                        Name:  Trudy W. Nelson
                                        Title: Vice President