Enterprise Expresses Optimism for Future with Several Projects in the Pipeline

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Researched by Industrial Info Resources (Sugar Land, Texas)--Enterprise Products Partners LP (NYSE:EPD) (Houston, Texas) expressed optimism in the higher-oil-price environment seen recently and is underway with projects involving not only crude oil, but also natural gas and ethylene.

In the company's conference call, Chief Executive Officer Jim Teague said, "With higher crude oil prices, production of oil and gas in the U.S. is growing dramatically. Meanwhile, demand globally continues to exceed expectations. ... As indicated by record liquid pipeline volumes and record marine terminal volumes, the amount of this new production that's in our pipes, in our plants and moving across our docks is continually growing. Given our size, our reach and our business model, we have significant operating leverage across all our systems to handle growing production, serve new markets and handle the significant increases we're seeing in exports." Teague said the company has $5.5 billion in growth projects under construction.

Among the company's largest projects is the Midland-to-Sealy crude oil pipeline in Texas. The 416-mile pipeline will carry up to 450,000 barrels per day (BBL/d) of crude oil from the Permian Basin to allow it to reach Houston area. Construction on the $760 million project began in the first half of last year. Teague said, "In the fourth quarter, we began limited service on our Midland-Sealy Pipeline, moving one grade of crude from the Permian Basin to the Houston refining and export market. This pipeline is expected to be in full service in the second quarter, after we complete construction of the pump stations and storage facilities." For more information, see Industrial Info's project report.

Teague said, "In the Permian Basin, we're scheduled to bring online two natural gas processing plants at our Orla complex in the Delaware Basin this year, one in the second quarter and the other in the third quarter." Teague added that a third Orla plant is scheduled to be put into service in 2019. Each plant will process 300 million cubic feet per day of natural gas and 80,000 BBL/d of natural gas liquids (NGL). Optimized Process Designs LLC (Katy, Texas) is performing engineering, procurement and construction (EPC) on the projects, which have a combined total investment value (TIV) of $700 million. For more information, see Industrial Info's project reports on the first, second and third natural gas processing plants.

"As to Mont Bevieu [Texas] and petrochemicals, we'll soon be putting our ninth NGL fractionator in service ... Our IBDH [iso-butane dehydrogenation] is under construction, with completion expected in 2019." The construction of Enterprises' ninth fractionator at Mont Bevieu began in the first quarter of last year and is expected to be completed this summer. The project has an estimated TIV of $500 million and will add 85,000 BBL/d of fractionation capacity, bringing total plant capacity to 685,000 BBL/d to accommodate growing NGL volumes from the Eagle Ford Shale and Permian Basin. For more information, see Industrial Info's project report.

Construction on the company's $1 billion IBDH unit began earlier this year and is expected to be completed late next year. The facility will produce 425,000 metric tons per year of isobutylene. Optimized Process Designs is performing EPC work. For more information, see Industrial Info's project report.

Enterprise also is taking advantage of the buildout in ethylene production capacity along the U.S. Gulf Coast. Teague said, "By 2021, just the state of Texas will be the largest producer of ethylene from steam cracking in the world, and that's not counting what's happening across the border in Louisiana. That's in our backyard, and the resulting rapid growth in ethylene, combined with increased international demand from markets like Asia, creates an ideal scenario in which markets abroad can diversify their supply towards cost-advantaged U.S. feedstocks."

Accompanying Enterprises' performance results was the announcement that the company will form a 50:50 joint venture with Navigator Holdings Limited (NYSE:NVGS) (London, England) to construct an ethylene export facility along the U.S. Gulf Coast. The facility will have the capacity to export 1 million tons of ethylene per year, with storage for 30,000 tons of ethylene and the capability of loading 1,000 tons per hour. Enterprise says the facility is expected to be in service in the first quarter of 2020. The project already is supported by long-term contracts with customers, including ethylene producer Flint Hills Resources LP (Wichita, Kansas), a subsidiary of Koch Industries, and an unnamed Japanese trading company.

Enterprise's fourth-quarter 2017 net income was $797 million, compared with $670 million in fourth-quarter 2016. Full-year 2017 net income was $2.86 billion, compared with $2.55 billion in 2016.

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.