Energy Transfer to Bolster NGL Capacity as Demand Builds

Researched by Industrial Info Resources (Sugar Land, Texas)--Energy Transfer LP (NYSE:ET) (Dallas, Texas) enjoyed higher transport volumes in most of its businesses in the second quarter, but took a small hit to earnings due to lower natural gas and natural gas liquids (NGL) prices. Regardless, the U.S. midstream company is planning to add capacity across many of its systems, in anticipation of continued demand. Industrial Info is tracking more than $21.6 billion worth of active and proposed projects from Energy Transfer, more than $17 billion of which is currently slated to begin construction within the next two years.

Click on the image at right for a graph detailing Energy Transfer's active and proposed projects, by industry sector.

The company notched up a series of record highs in the second quarter, despite the overall weakness in prices: NGL fractionation volumes increased 5% from the same period last year to 989,000 barrels per day (BBL/d); NGL transportation volumes increased 13% to 2.16 million BBL/d; midstream-gathered volumes increased 8% to 19.85 billion British thermal units per day; and intrastate natural gas transportation volumes increased 3% to 1.52 billion British thermal units per day. The strength in NGL volumes were attributed, in part, to Energy Transfer's Nederland and Marcus Hook terminals in Texas and Pennsylvania, respectively, where total NGL exports reached a record in the second quarter.

Energy Transfer is seeking permits to expand its ethane export capacity at Marcus Hook, including a 70,000-BBL/d ethane refrigeration train and a pair of ethane storage tanks, each of which has a 600,000-barrel capacity. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can learn more from a detailed report on the ethane expansion project, and read detailed plant profiles for Nederland and Marcus Hook.

"Year to date, we have loaded more than 30 million barrels of ethane out of Nederland, and we are exporting record volumes of ethane out of Marcus Hook," said Tom Long, the chief financial officer of Energy Transfer, in a quarterly earnings-related conference call. "In total, we continue to export more NGLs than any other company and maintain approximately 20% market share of worldwide NGL exports, as well as nearly 40% of U.S. [exports]."

Energy Transfer's capital expenditures (capex) on growth projects totaled $387 million in the second quarter, while maintenance spending totaled $216 million. The company expects full-year 2023 growth capex to total about $2 billion, which the company expects to spend primarily in its midstream, NGL and refined products, interstate and crude segments.

At its 900,000-BBL/d NGL fractionation complex in Mont Belvieu, Texas, Energy Transfer is putting the finishing touches on its $350 million Train No. 8, which is expected to process another 150,000 BBL/d from feedstock drawn from the Permian Basin and the Woodford and Eagle Ford shale plays. The company expects it to be in service sometime in September. Subscribers can learn more from a detailed project report.

Sometime this month, Energy Transfer executives expect to apply for new export authorization for the company's liquefied natural gas (LNG) terminal in Lake Charles, Louisiana. Energy Transfer is planning to appeal a recent decision by the U.S. Department of Energy (DOE) that denied a deadline extension to begin LNG shipments from the facility. The DOE granted Lake Charles LNG an extension in 2020 that gave it until 2025 to start exporting; the company is hoping to extend the deadline to 2028. The Federal Energy Regulatory Commission (FERC) granted its approval for the 2028 extension in May 2022.

Subscribers can read more about the Lake Charles project in a detailed project report and plant profile, and in Industrial Info's May 4, 2023, article - Energy Transfer to Appeal DOE Decision Regarding LNG Export Extension.

Energy Transfer's stronger transportation volumes for the second quarter were attributed to its Gulf Run system in western Louisiana being placed into service in December 2022, as well as more capacity sold and higher utilization on its longstanding systems due to increased demand, including its Trunkline System along the Gulf Coast. Long-term customer volume commitments that were added to Gulf Run during the second quarter are being delivered to the new system via Trunkline, for which the company is seeking 1 billion cubic feet of capacity additions via compressor-station expansions and modifications.

These capacity additions also are necessary to expand liquefaction capabilities at the Lake Charles LNG terminal. Among the natural gas compressor stations Energy Transfer hopes to expand are the:

• Station 48 in Longville, Louisiana; see project report
• Station 57 near Pollock, Louisiana; see project report
• station in Epps, Louisiana; see project report
• Station D in Shaw, Mississippi; see project report

Energy Transfer's net income totaled $911 million for the second quarter, a 31.3% decrease from the same period last year. Revenues stood at $18.32 billion, a 29.4% decrease.

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a list of detailed reports for active and proposed projects from Energy Transfer.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).