Enterprise Products' Growth Projects Keep Coming

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Researched by Industrial Info Resources (Sugar Land, Texas)--Like other midstream companies, Enterprise Products Partners LP (NYSE:EPD) (Houston, Texas) is reaping the profits to be made from the growing production of oil, natural gas and natural gas liquids (NGL) in the U.S. and plowing some of its gains into growth projects. Although the company's quarterly net earnings were down from $1.3 billion in third-quarter 2018, it still reported a $1 billion profit in the just-passed third quarter. Enterprise spent $1 billion in growth capital projects in the third quarter and expects growth capital expenditures next year to be $3 billion to $4 billion. Industrial Info is tracking more than $15 billion in active Enterprise projects.

In the company's recent earnings conference call, Chief Executive Officer Jim Teague talked about some of Enterprise's projects. "We recently sanctioned two expansions of our Midland-to-ECHO [crude oil] pipeline system, M2E3 and M2E4. We announced M2E3 in July and M2E4 in October. Our M2E3 expansion will add 450,000 barrels a day (BBL/d) of capacity. This pipeline is expected to be completed in the third quarter of 2020." The M2E4 expansion ties into Enterprise's Eagle Ford crude oil pipeline and will provide up to 450,000 BBL/d of incremental capacity and will be expandable to 540,000 BBL/d.

The company's M2E2 line has been converted from NGL to crude oil service, and Teague said the third and fourth buildouts of the Midland-to-ECHO system could allow this pipeline to return to NGL service. Teague said, "In doing so, M2E4 would only add a small amount of capacity to our Midland-to-ECHO system." Construction on M2E3 is expected to kick off early next year, followed by M2E4 that summer. The projects have a combined total investment value (TIV) of $1.5 billion. For more information, see Industrial Info's project reports on M2E3 and M2E4.

The third major project announced in the quarter was the construction of Enterprise's second propane dehydrogenation (PDH) unit at its complex in Mont Belvieu, Texas. Teague said Enterprise had selected S&B Engineers and Constructors Limited (Houston) to perform engineering, procurement and construction (EPC). Teague said Enterprise had a history with S&B dating back to 1995, and the company had led construction on nine of Enterprises NGL fractionators plus several other assets at Mont Belvieu. Construction on the unit is set to kick off this quarter and be completed in the first half of 2023. The unit will have a production capacity of 1.65 billion pounds per year of propylene, utilizing 35,000 BBL/d of propane, which will be provided by LyondellBasell Industries NV (NYSE:LYB) (Houston). The facility will increase Enterprise's propylene production capacity at Mont Belvieu to 3.3 billion pounds per year. For more information, see Industrial Info's project report.

Also at Mont Belvieu, Enterprise is nearing completion on construction of an isobutane dehydrogenation unit. The facility will have a production capacity of 425,000 metric tons per year of isobutylene. Construction began in early 2018, with Optimized Process Designs LLC (Katy, Texas) providing EPC services. The $1 billion project is expected to be completed by the end of this year. For more information, see Industrial Info's project report.

Teague said several other Enterprise projects were on track to be completed in the next 18 months, including a tenth and 11th NGL fractionator at Mont Belvieu. Construction of Fractionator 10 kicked off last year, followed by Fractionator 11 early this year. Each fractionator will add 150,000 BBL/d of fractionation capacity, bringing the total fractionation capacity at Mont Belvieu to 1.1 million BBL/d. The fractionators are expected to be completed in the first and third quarters of next year. For more information, see Industrial Info's project reports on Fractionator 10 and Fractionator 11. Enterprise recently kicked off construction on a 12th fractionator, which is expected to be completed in early 2021. For more information, see Industrial Info's project report.

Among the other projects listed by Teague that will be completed in the coming 18 months is the construction of a natural gas processing plant in Mentone, Texas. The cryogenic facility will be able to process 300 million cubic feet per day of natural gas and 40,000 BBL/d of NGL from the Delaware Basin. Construction began earlier this year and is expected to be completed in early 2020. For more information, see Industrial Info's project report.

Enterprise also is at work on a cryogenic natural gas processing plant near Carthage, Texas, in the east of the state, near the Louisiana border. The facility will be able to process 200 million cubic feet per day of natural gas and 28,000 BBL/d of NGL. Construction is expected to wrap up soon. For more information, see Industrial Info's project report.

Since its last conference call, Enterprise has added $3.6 billion in projects to its backlog.

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 https://www.industrialinfo.com.