Enterprise Accelerates Projects to Keep Up With Increased Permian Basin Output

Researched by Industrial Info Resources (Sugar Land, Texas)--Enterprise Products Partners (NYSE:EPD) (Houston, Texas) announced that it has accelerated a pipeline and fractionator project due to increasing volumes of production from the Permian Basin. Industrial Info is tracking $5.36 billion of projects involving Enterprise.

Among the projects being accelerated is the Midland-to-Sealy crude oil pipeline in Texas. The pipeline and associated compressor stations have an estimated total investment value (TIV) of $760 million. The 416-mile pipeline will transport 540,000 barrels per day (BBL/d) of crude and condensate from the Permian to Enterprise's Sealy Station. In a conference call regarding the company's performance, Chief Executive Officer Jim Teague spoke of the project. "Our Midland-to-Sealy crude pipeline is currently under construction with an expected in-service date late this year, ramping up to full capacity early next year." For more information, see Industrial Info's project report.

Also being accelerated is the company's ninth natural gas liquids (NGL) fractionator at its complex in Mont Belvieu, Texas, to help accommodate growing NGL production volumes from the Permian and Eagle Ford. The 85,000-BBL/d fractionation train will increase the facility's total capacity to 685,000 BBL/d. The unit is set to be up and running next year. The project has an estimated TIV of $500 million. For more information, see Industrial Info's project report.

"We now have a total of $8.4 billion of growth projects under construction scheduled to be completed this year through 2020," said Teague in a press release regarding the company's operating results.

Among the top projects currently under construction is a propane dehydrogenation (PDH) unit addition at the Mont Belvieu complex. The project began construction in 2014 and is expected to be completed late this summer. The unit will produce 1.65 billion pounds per year of propylene using 35,000 BBL/d of propane as feedstock. The project has a TIV of $900 million. Also topping the list in terms of project value is the $1 billion planned iso-butane dehydrogenation (IBDH) unit addition at Mont Belvieu.

In the conference call, Teague spoke of the two projects: "Our biggest demand project, our PDH, remains on target to be up and running in the third quarter. Permitting and engineering is moving along for our IBDH plant which is expected to be up in the second half of 2019. Both of these projects are similar, as the movement toward increased ethane cracking that brought us numerous feedstock opportunities is now giving us the opportunity to take growing LPG [liquefied petroleum gas] volumes, and turn them into higher value propylene and butylene."

For more information, see Industrial Info's project reports on the PDH unit and IBDH unit.

"As to supply projects in the Permian," said Teague, "we recently announced a major NGL pipeline, our Shin Oak Pipeline. The pipeline will have an initial capacity of 250,000 BBL/d, but it's expandable to 600,000 BBL/d. We expect that in service in the first half of 2019." The 571-mile pipeline will run from Enterprise's Hobbs NGL Fractionator and storage facility to its Mont Belvieu complex, carrying NGL from the Permian Basin. The project has an estimated TIV of $750 million. For more information, see Industrial Info's project report.

Enterprise reported first-quarter 2017 net income of $771 million, compared to $670 million in first-quarter 2016. For the full year 2017, the company expects organic growth capital expenditures of $2.5 billion to $2.75 billion and $250 million in sustaining capital expenditures.

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