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Researched by Industrial Info Resources (Sugar Land, Texas)--Like other midstream companies with a strong focus on oil and natural gas liquids (NGL), Energy Transfer (NYSE:ET) (Houston, Texas) has witnessed a downturn since late March, as demand has cratered and producers have cut production because of low commodity prices. The company reported a net loss of $855 million for first-quarter 2020.
Energy Transfer is taking measures to brace itself for an uncertain future. Along with Monday's earnings report, the company said it would reduce 2020 growth capital expenditures (capex) by at least $400 million, to $3.6 billion, with another $300 million to $400 million under evaluation for potential reductions. The company's growth capex in the first quarter was approximately $1 billion.
In the company's earnings conference call with analysts, Chief Financial Officer Thomas Long said, "Approximately 70% of the growth capital spend in 2020 will be spent on projects that are 60% or more complete and are expected to be in service in 2020 or early 2021." He added, "Although we anticipate growing the business over the next several years and we are continually evaluating new opportunities given our asset footprint, we view it is unlikely we will add any major organic growth projects to our backlog for 2021."
Long gave an update on some of Energy Transfer's recent accomplishments as well as projects that are underway. Among its first-quarter milestones was the startup of a seventh NGL fractionator at its Lone Star complex in Mont Belvieu, Texas, bringing total plant capacity to more than 900,000 barrels per day (BBL/d). However, plans for an eighth fractionator have been delayed. Long said, "We are delaying the construction of Frac 8 based on our current supply and volume expectations, along with our customers' volume expectations. We now expect it to be in service in the first quarter of 2022." Construction on Frac 8 began last summer, with S&B Engineers and Constructors Limited (Houston) providing engineering, procurement and construction services. Like Frac 7, Frac 8 will have a production capacity of 150,000 BBL/d. For more information, see Industrial Info's project reports on Frac 7 and Frac 8.
Also placed into service in the just-passed quarter is the Panther 2 natural gas processing plant in the Texas Permian Basin, which has a processing capacity of 200 million cubic feet per day. Long said the plant is fully subscribed and brings Energy Transfer's processing capacity in the Permian to more than 2.7 billion cubic feet per day. For more information, see Industrial Info's project report.
The company also is progressing with pipeline projects. Long said, "We are in the final stages of construction on our 24-inch, 352-mile Lone Star Express expansion, which will add over 400,000 BBL/d of NGL pipeline capacity from the Permian Basin to the Lone Star Express 30-inch pipeline south of Fort Worth, Texas. We continue to expect the expansion to be in service in the fourth quarter of 2020." Construction began late last year with a number of different general contractors. Click here for a list of associated projects.
In the terminals sector, Energy Transfer is continuing an expansion of a liquefied petroleum gas (LPG) export terminal in Nederland, Texas. Long said, "Looking at our LPG expansion project at Nederland, we have recently found a very cost-effective way to modify this expansion, which will increase the capacity from 235,000 barrels per day to 300,000 barrels per day. LPG demand has remained strong, as has demand for this project, which will further integrate our Mont Belvieu assets with our Nederland assets to expand our LPG export capabilities." Long said the project the project remained on track for completion in fourth-quarter 2020. For more information, see Industrial Info's project report.
Also on track for a fourth-quarter completion is the company's Orbit ethane export terminal addition in Nederland, which is a joint venture project with China's Satellite Petrochemicals. For more information, see Industrial Info's project report.
Beyond Fractionator 8 in Mont Belvieu, Long didn't enumerate projects that would be delayed, but Industrial Info is tracking several Energy Transfer in the early stages or planning phases.
These include:
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Energy Transfer is taking measures to brace itself for an uncertain future. Along with Monday's earnings report, the company said it would reduce 2020 growth capital expenditures (capex) by at least $400 million, to $3.6 billion, with another $300 million to $400 million under evaluation for potential reductions. The company's growth capex in the first quarter was approximately $1 billion.
In the company's earnings conference call with analysts, Chief Financial Officer Thomas Long said, "Approximately 70% of the growth capital spend in 2020 will be spent on projects that are 60% or more complete and are expected to be in service in 2020 or early 2021." He added, "Although we anticipate growing the business over the next several years and we are continually evaluating new opportunities given our asset footprint, we view it is unlikely we will add any major organic growth projects to our backlog for 2021."
Long gave an update on some of Energy Transfer's recent accomplishments as well as projects that are underway. Among its first-quarter milestones was the startup of a seventh NGL fractionator at its Lone Star complex in Mont Belvieu, Texas, bringing total plant capacity to more than 900,000 barrels per day (BBL/d). However, plans for an eighth fractionator have been delayed. Long said, "We are delaying the construction of Frac 8 based on our current supply and volume expectations, along with our customers' volume expectations. We now expect it to be in service in the first quarter of 2022." Construction on Frac 8 began last summer, with S&B Engineers and Constructors Limited (Houston) providing engineering, procurement and construction services. Like Frac 7, Frac 8 will have a production capacity of 150,000 BBL/d. For more information, see Industrial Info's project reports on Frac 7 and Frac 8.
Also placed into service in the just-passed quarter is the Panther 2 natural gas processing plant in the Texas Permian Basin, which has a processing capacity of 200 million cubic feet per day. Long said the plant is fully subscribed and brings Energy Transfer's processing capacity in the Permian to more than 2.7 billion cubic feet per day. For more information, see Industrial Info's project report.
The company also is progressing with pipeline projects. Long said, "We are in the final stages of construction on our 24-inch, 352-mile Lone Star Express expansion, which will add over 400,000 BBL/d of NGL pipeline capacity from the Permian Basin to the Lone Star Express 30-inch pipeline south of Fort Worth, Texas. We continue to expect the expansion to be in service in the fourth quarter of 2020." Construction began late last year with a number of different general contractors. Click here for a list of associated projects.
In the terminals sector, Energy Transfer is continuing an expansion of a liquefied petroleum gas (LPG) export terminal in Nederland, Texas. Long said, "Looking at our LPG expansion project at Nederland, we have recently found a very cost-effective way to modify this expansion, which will increase the capacity from 235,000 barrels per day to 300,000 barrels per day. LPG demand has remained strong, as has demand for this project, which will further integrate our Mont Belvieu assets with our Nederland assets to expand our LPG export capabilities." Long said the project the project remained on track for completion in fourth-quarter 2020. For more information, see Industrial Info's project report.
Also on track for a fourth-quarter completion is the company's Orbit ethane export terminal addition in Nederland, which is a joint venture project with China's Satellite Petrochemicals. For more information, see Industrial Info's project report.
Beyond Fractionator 8 in Mont Belvieu, Long didn't enumerate projects that would be delayed, but Industrial Info is tracking several Energy Transfer in the early stages or planning phases.
These include:
- A grassroot crude oil pipeline from the Permian to Nederland; see project report
- A third natural gas processing train at the Panther facility; see project report
- A fourth natural gas processing train at the Arrowhead facility in West Texas; see project report
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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
