EnLink Champions Oklahoma, Permian Basin Growth in 2017 Capital Spending Plans

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Researched by Industrial Info Resources (Sugar Land, Texas)--The EnLink midstream companies, which include EnLink Midstream Partners LP (NYSE:ENLK) (Dallas, Texas) and general partner EnLink Midstream LLC (NYSE:ENLC) (Dallas), recently detailed their strategic growth plan and outlook for 2017, which anticipates strong results from EnLink's heavy investments in central Oklahoma and Texas' Permian Basin. Industrial Info is tracking more than $865 million in active projects involving EnLink.

EnLink Midstream Partners' full-year 2017 net income is estimated to range from $80 million to $120 million, while EnLink Midstream LLC's is expected to range from $45 million to $105 million. EnLink's recent successes in Oklahoma's STACK shale play are driving much of the projected growth.

"In 2017, we continue to focus on executing our strategic growth plan," said Barry E. Davis, the chairman and chief executive officer of EnLink, in a press release. "Our assets are strategically positioned in top U.S. basins, where we're experiencing strong producer activity and, as a result, are further expanding our operational reach and service offerings to meet increasing demand. We expect the momentum of recent volume growth to continue throughout 2017 and beyond."

EnLink's total growth capital expenditures are projected to range from $590 million to $750 million, according to the press release, including $85 million to $105 million in contributions from joint venture partners and EnLink Midstream LLC. In particular, EnLink Midstream LLC's growth capital expenditures for its central Oklahoma assets are expected to be between $60 million and $70 million.

EnLink is at work on the $120 million Phase II and $120 million Phase III expansions at its Chisholm Cryogenic Natural Gas Processing Plant near Cashion, Oklahoma, each of which is expected to add 150 million standard cubic feet per day of processing capacity at the facility, bringing it to 400 million standard cubic feet per day. The second phase is expected to be operational in the second quarter, and the third phase is expected to be operational by the end of the year.

These expansions are expected to give EnLink about 1 billion standard cubic feet per day of processing capacity in central Oklahoma, preserving its status as one of the largest gas-processors in the STACK play. For more information, see Industrial Info's project reports on Phase II and Phase III.

The companies also have proposed a $120 million Phase IV expansion at Chisholm, which would add another 150 million standard cubic feet per day. For more information, see Industrial Info's project report.

EnLink also said that operating margins related to its assets in central Oklahoma and the Permian Basin are expected to more than offset projected margin declines in mature basins. As a result, central Oklahoma likely will replace northern Texas as the companies' largest regional contributor in 2017.

One of EnLink's largest proposed projects in the Permian is a $100 million Train 2 addition at the Riptide Cryogenic Natural Gas Processing Plant near Tarzan, Texas. As designed, the new train would double natural gas-processing capacity at the facility to 200 million standard cubic feet per day. EnLink noted that the related gas-processing system underwent an expansion last year that boosted capacity 30% to 40%, to support expected volume growth from drilling activity throughout 2017. The companies also said they have most of the infrastructure in place to expand Riptide. For more information, see Industrial Info's project report.

In Louisiana, construction of the $60 million Ascension Pipeline in southeast Louisiana, a joint venture with Marathon Petroleum Corporation (NYSE:MPC) (Findlay, Ohio), is under way and is expected to become operational during the second quarter. The project, which also involves a $40 million NGL pump station in Geismar, will run 30 miles from Enlink's Riverside NGL Fractionator in Geismar to Marathon's refinery in Garyville, Louisiana. For more information, see Industrial Info's project reports on the pipeline and pump station.

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