Enterprise Products Nears Completion of Two Big Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Enterprise Products Partners LP (NYSE:EPD) (Houston, Texas) says it is nearing completion of two major capital projects. The company reported $1 billion in capital expenditures for third-quarter 2017, including $54 million for sustaining items. The company expects $2.9 billion to $3.1 for growth capital projects in full-year 2017, ranging from gas processing projects to midstream pipeline projects. Industrial Info is tracking more than $5 billion in active Enterprise Products Partners projects.

In a conference call, Enterprise Products Chief Executive Officer Jim Teague said, "We're excited that two of our largest projects are coming online," referring to the company's Midland-to-Sealy crude oil pipeline and its propane dehydrogenation (PDH) unit addition in Mont Belvieu, both in Texas. "We're bringing the initial phase of our Midland-to-Sealy pipe online as we speak," said Teague, cautioning that volumes and level of service on the pipeline would be limited until all of the tankage and pumps that support the pipeline are complete, which is expected in the second quarter of next year.

The $760 million Midland-to-Sealy project involves construction of 416 miles of 24-inch pipe to transport 450,000 barrels per day (BBL/d) of crude oil from the Permian Basin to Enterprise's station in Sealy, Texas. The project began construction earlier this year. For more information, see Industrial Info's project report.

"We're also in the process of bringing up our PDH plant," said Teague. "The plant is in the startup phase, and we anticipate we'll be at full rate before month end." The Mont Belvieu PDH project will produce 1.65 billion pounds per year of propylene, utilizing 35,000 BBL/d of propane as feedstock. The project kicked off in the first half of 2014, and construction was completed in the third quarter of this year. Optimized Process Design LLC (Katy, Texas) provided engineering, procurement and construction (EPC) on the project. For more information see Industrial Info's project report.

Teague spoke about the PDH project's ability to fill a market need: "The fundamentals that underwrote the investment remain strong, including strong NGL [natural gas liquids] supply growth and a heavy concentration toward ethane cracking by U.S. petrochemicals, which leaves the space short of propylene. Couple that with rising global demand for propylene and its derivatives, and we believe the long-term outlook for propylene is strong. These same fundamentals--abundant U.S. NGLs and growing global demand--also support our IBDH [iso-butane dehydrogenation] plant, which is expected to be up and running in early 2019."

The IBDH plant is being constructed in Mont Belvieu, adjacent to the PDH unit. The plant will produce 937 million pounds per year of isobutylene from the 30,000 BBL/d of iso-butane created. Construction kicked off in the second quarter of this year. Optimized Process Design also is providing EPC work on the project, which has an estimated total investment value of $1 billion. For more information, see Industrial Info's project report.

Enterprise's Shin Oak Pipeline project includes constructing 571 miles of 24-inch pipeline from one of the company's fractionation and storage facilities in the Permian Basin to its plant in Mont Belvieu. The pipeline will transport 250,000 BBL/d of NGL and is expandable up to 600,000 BBL/d should future growth require it. Construction is expected to kick off next summer. "Work is progressing nicely on our Shin Oak NGL Pipeline, where a substantial amount of the right-of-way has now been secured and long-lead-time equipment has been ordered, and completion is expected in the first half of 2019. The Permian Basin continues to show significant upside potential, and Shin Oak provides a critical link between the Permian and our natural gas liquids systems on the Gulf Coast," said Teague. For more information, see Industrial Info's project report.

Enterprise Products reported net income of $621 million for the third quarter of 2017, compared with $643 million in third-quarter 2016. The company reported a $35 million loss from the impact of Hurricane Harvey, which hit Texas in late August this year.

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