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Released May 11, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Winter Storm Uri came crashing through Texas in February, leaving millions of people without power and shutting down several industrial facilities. However, some companies turned a profit from the high natural gas prices that the state saw during this time, among them midstream operator Energy Transfer LP (NYSE:ET) (Dallas, Texas).
In the company's recent earnings conference call, Chief Financial Officer Tom Long said, "In the days leading up to the storm, we injected additional natural gas into our pipelines as line pack prior to the storm that not only served as additional storage, but also allowed us to place natural gas volumes as close to our customers as possible. And we brought in specialized equipment that was strategically allocated across our systems to help prevent freezing, including hot starts for engines, steam trucks, steam generators, and methanol injection units."
Energy Transfer has about 63 billion cubic feet of working natural gas storage in Texas, and withdrawals from these facilities reached a peak rate of approximately 1.7 billion cubic feet per day (Bcf/d) during the storm. The company also brought natural gas in from other states for delivery to its customers.
According to the U.S. Energy Information Administration, February natural gas withdrawals in the U.S. averaged 104.8 Bcf/d, an 8.1-Bcf/d (7%) decrease from January withdrawals, and the largest monthly decline on record.
The preparation paid off. Energy Transfer reported first-quarter 2021 net income of $3.29 billion, an increase of $4.14 billion compared to the same period the previous year. Much of the increase was due to the higher natural gas withdrawals made during the storm.
It wasn't all rosy for the company, however. Energy Transfer's natural gas liquids (NGL) and refined products segment suffered from a $37 million impact related to lower producer volumes from West Texas on its Texas NGL pipelines and reduced throughput on its fractionators in Mont Belvieu, Texas. The company's average fractionated volumes were 726,000 barrels per day (BBL/d) in the just-passed quarter, compared with 804,000 BBL/d in the prior-year quarter.
The company benefitted from its recently completed ethane export terminal addition in Nederland, Texas, a joint venture with China's Satellite Petrochemical (Jiaxing). Long said, "On our 180,000-BBL/d ethane export joint venture with Satellite Petrochemical, we have now loaded three VLECs (very large ethane carriers) under this joint venture, each with over 900,000 barrels of ethane, and we have loaded three additional ships with ethane out of our Nederland terminal, bringing our total ethane loaded out of this facility to nearly 3.5 million barrels through April." If you subscribe to Industrial Info's Global Market Intelligence (GMI) Terminals database, click here to see project report.
Long said the company's NGL export capacity stands at slightly more than 1 million BBL/d, and the company is in a strong position to take advantage of growing demand for NGLs from the U.S. in other countries.
After the COVID-19 pandemic began affecting midstream companies last year, Energy Transfer reduced its planned 2020 capital expenditures (capex) from $4 billion to $3.4 billion. The reductions have been substantial for 2021. At the start of the year, the company forecast growth capex of $1.45 billion. However, in the conference call, Long announced the company is boosting this to $1.6 billion, primarily due to some smaller growth projects in its midstream segment, and the acceleration of some planned 2022 spending into this year. For 2022 and 2023, Energy Transfer expects spending of approximately $500 million to $700 million per year.
Among the company's projects delayed due to the market conditions brought about the pandemic is the construction of an eighth fractionator at its Mont Belvieu facility. The company began construction on the 150,000-BBL/d fractionator in the summer of 2019, but last year announced the delay of completion until market conditions improve. If you are a subscriber to Industrial Info's Global Market Intelligence (GMI) Production database, click here to view project report.
Among the problems facing the company is the potential shutdown of its Dakota Access crude oil pipeline in North Dakota. The pipeline has been operating for four years and has faced strong opposition from Native American groups regarding its path under Lake Oahe, which provides drinking water to the area. A previous environmental review of the project was declared null by the courts, and a new review is underway. The U.S. Army Corps of Engineers expects to complete another environmental impact statement by March 2022. If you are a subscriber to Industrial Info's Global Market Intelligence Pipeline Asset database, click here to view pipeline profile.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
In the company's recent earnings conference call, Chief Financial Officer Tom Long said, "In the days leading up to the storm, we injected additional natural gas into our pipelines as line pack prior to the storm that not only served as additional storage, but also allowed us to place natural gas volumes as close to our customers as possible. And we brought in specialized equipment that was strategically allocated across our systems to help prevent freezing, including hot starts for engines, steam trucks, steam generators, and methanol injection units."
Energy Transfer has about 63 billion cubic feet of working natural gas storage in Texas, and withdrawals from these facilities reached a peak rate of approximately 1.7 billion cubic feet per day (Bcf/d) during the storm. The company also brought natural gas in from other states for delivery to its customers.
According to the U.S. Energy Information Administration, February natural gas withdrawals in the U.S. averaged 104.8 Bcf/d, an 8.1-Bcf/d (7%) decrease from January withdrawals, and the largest monthly decline on record.
The preparation paid off. Energy Transfer reported first-quarter 2021 net income of $3.29 billion, an increase of $4.14 billion compared to the same period the previous year. Much of the increase was due to the higher natural gas withdrawals made during the storm.
It wasn't all rosy for the company, however. Energy Transfer's natural gas liquids (NGL) and refined products segment suffered from a $37 million impact related to lower producer volumes from West Texas on its Texas NGL pipelines and reduced throughput on its fractionators in Mont Belvieu, Texas. The company's average fractionated volumes were 726,000 barrels per day (BBL/d) in the just-passed quarter, compared with 804,000 BBL/d in the prior-year quarter.
The company benefitted from its recently completed ethane export terminal addition in Nederland, Texas, a joint venture with China's Satellite Petrochemical (Jiaxing). Long said, "On our 180,000-BBL/d ethane export joint venture with Satellite Petrochemical, we have now loaded three VLECs (very large ethane carriers) under this joint venture, each with over 900,000 barrels of ethane, and we have loaded three additional ships with ethane out of our Nederland terminal, bringing our total ethane loaded out of this facility to nearly 3.5 million barrels through April." If you subscribe to Industrial Info's Global Market Intelligence (GMI) Terminals database, click here to see project report.
Long said the company's NGL export capacity stands at slightly more than 1 million BBL/d, and the company is in a strong position to take advantage of growing demand for NGLs from the U.S. in other countries.
After the COVID-19 pandemic began affecting midstream companies last year, Energy Transfer reduced its planned 2020 capital expenditures (capex) from $4 billion to $3.4 billion. The reductions have been substantial for 2021. At the start of the year, the company forecast growth capex of $1.45 billion. However, in the conference call, Long announced the company is boosting this to $1.6 billion, primarily due to some smaller growth projects in its midstream segment, and the acceleration of some planned 2022 spending into this year. For 2022 and 2023, Energy Transfer expects spending of approximately $500 million to $700 million per year.
Among the company's projects delayed due to the market conditions brought about the pandemic is the construction of an eighth fractionator at its Mont Belvieu facility. The company began construction on the 150,000-BBL/d fractionator in the summer of 2019, but last year announced the delay of completion until market conditions improve. If you are a subscriber to Industrial Info's Global Market Intelligence (GMI) Production database, click here to view project report.
Among the problems facing the company is the potential shutdown of its Dakota Access crude oil pipeline in North Dakota. The pipeline has been operating for four years and has faced strong opposition from Native American groups regarding its path under Lake Oahe, which provides drinking water to the area. A previous environmental review of the project was declared null by the courts, and a new review is underway. The U.S. Army Corps of Engineers expects to complete another environmental impact statement by March 2022. If you are a subscriber to Industrial Info's Global Market Intelligence Pipeline Asset database, click here to view pipeline profile.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
