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Researched by Industrial Info Resources (Sugar Land, Texas)--Midstream owner and operator Enterprise Products Partners (NYSE:EPD) (Houston, Texas) is coming off a strong first quarter and remains resilient as uncertainty looms within the energy sector because of the COVID-19 pandemic and the precipitous drop in global oil demand and prices. The company posted net income of $1.4 billion in first-quarter 2020, compared with $1.3 billion in the prior-year quarter. While the company has reduced and/or deferred 2020 capital expenditures by $1.1 billion, it still expects growth capital spending of $2.5 billion to $3 billion this year. The company also is exploring joint-venture opportunities, which could further reduce capital expenditures.
In Wednesday's earnings conference call, Co-Chief Executive Officer Jim Teague discussed recent events and some of the measures being taken by the company. These include remote working and staffing half of Enterprise's pipeline control team at its backup location in San Antonio, Texas. Teague said, "We're operating our pipelines out of two locations to make sure that we always have an eye on our pipe and our plants. Many of our larger facilities went to seven-on, seven-off [work schedules] to allow for social distancing. ... I've been through many cycles in my life, but I've never seen anything like what we're going through now. Demand literally fell off a cliff in March. ... As demand cratered, our good buddies Russia and Saudi Arabia piled on by pumping an additional 4 million barrels a day (BBL/d) of crude oil into the market, and the result was what no one would have ever guessed: negative-priced crude oil."
Teague said the company was functioning well in the volatile environment. Its natural gas liquids (NGL) fractionators are full, and NGL pipelines overall have not seen a downturn. The company's Permian crude oil pipelines are fully contracted, and its Seaway crude oil pipeline, which runs from Cushing, Oklahoma, to the Texas Gulf Coast, is "virtually full."
But Teague said Enterprise's petrochemical business is challenged in the wake of a fall in demand for gasoline and subsequent cuts in refinery runs. "Once refinery runs improve, so will our petrochemicals," he said.
Enterprise says it has deferred or canceled 13 projects, including a planned crude oil pipeline, propane dehydrogenation (PDH) unit and isomerization unit.
Click on the image at right for a slide showing Enterprise's adjusted project activity.
Among the projects that continue to move forward are two NGL fractionators at the company's complex in Mont Belvieu, Texas. Fractionator 10 was completed in the first quarter and is ramping up capacity. Fractionator 11 was slightly delayed, but Enterprise is targeting a third-quarter in-service date. Each fractionator will add 150,000 BBL/d of capacity, bringing total capacity to 1.1 million BBL/d. S&B Engineers and Constructors Limited (Houston) is providing engineering, procurement and construction (EPC) for both units. For more information, see Industrial Info's project reports on Frac 10 and Frac 11.
Pipeline projects that remain on track include Enterprise's Midland-to-ECHO 3 crude oil pipeline, which is targeting an in-service date in third-quarter 2020. The 502-mile pipeline will transport 400,000-450,000 BBL/d from the company's terminal facility in Midland, Texas, to its Sealy storage facility near Houston. However, the related Midland-to-ECHO 4 pipeline has been slightly deferred to a forecast in-service date in the second half of 2021. The pipeline will transport 450,000 BBL/d. Construction was originally planned to kick off this summer. For more information, see Industrial Info's project reports on Midland-to-ECHO 3 and Midland-to-ECHO 4.
Among the largest of Enterprise's projects to be deferred is a second PDH unit in Mont Belvieu. The project had an originally planned in-service date of first-quarter 2023, but this has been pushed into the following quarter. The unit will double propylene production at the facility to 3.3 billion tons per year. Construction was originally planned to begin this summer, with S&B providing EPC. For more information, see Industrial Info's project report.
Projects that have been cancelled in the wake of the pandemic include the expansion of a butane isomerization unit at Mont Belvieu. The project would have expanded liquefied butane capacity by 35,000 BBL/d to a total of 155,000 BBL/d to be used as feedstock for methyl tert-butyl ether (MTBE) and alkylate production. For more information, see Industrial Info's 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.
In Wednesday's earnings conference call, Co-Chief Executive Officer Jim Teague discussed recent events and some of the measures being taken by the company. These include remote working and staffing half of Enterprise's pipeline control team at its backup location in San Antonio, Texas. Teague said, "We're operating our pipelines out of two locations to make sure that we always have an eye on our pipe and our plants. Many of our larger facilities went to seven-on, seven-off [work schedules] to allow for social distancing. ... I've been through many cycles in my life, but I've never seen anything like what we're going through now. Demand literally fell off a cliff in March. ... As demand cratered, our good buddies Russia and Saudi Arabia piled on by pumping an additional 4 million barrels a day (BBL/d) of crude oil into the market, and the result was what no one would have ever guessed: negative-priced crude oil."
Teague said the company was functioning well in the volatile environment. Its natural gas liquids (NGL) fractionators are full, and NGL pipelines overall have not seen a downturn. The company's Permian crude oil pipelines are fully contracted, and its Seaway crude oil pipeline, which runs from Cushing, Oklahoma, to the Texas Gulf Coast, is "virtually full."
But Teague said Enterprise's petrochemical business is challenged in the wake of a fall in demand for gasoline and subsequent cuts in refinery runs. "Once refinery runs improve, so will our petrochemicals," he said.
Enterprise says it has deferred or canceled 13 projects, including a planned crude oil pipeline, propane dehydrogenation (PDH) unit and isomerization unit.
Click on the image at right for a slide showing Enterprise's adjusted project activity.Among the projects that continue to move forward are two NGL fractionators at the company's complex in Mont Belvieu, Texas. Fractionator 10 was completed in the first quarter and is ramping up capacity. Fractionator 11 was slightly delayed, but Enterprise is targeting a third-quarter in-service date. Each fractionator will add 150,000 BBL/d of capacity, bringing total capacity to 1.1 million BBL/d. S&B Engineers and Constructors Limited (Houston) is providing engineering, procurement and construction (EPC) for both units. For more information, see Industrial Info's project reports on Frac 10 and Frac 11.
Pipeline projects that remain on track include Enterprise's Midland-to-ECHO 3 crude oil pipeline, which is targeting an in-service date in third-quarter 2020. The 502-mile pipeline will transport 400,000-450,000 BBL/d from the company's terminal facility in Midland, Texas, to its Sealy storage facility near Houston. However, the related Midland-to-ECHO 4 pipeline has been slightly deferred to a forecast in-service date in the second half of 2021. The pipeline will transport 450,000 BBL/d. Construction was originally planned to kick off this summer. For more information, see Industrial Info's project reports on Midland-to-ECHO 3 and Midland-to-ECHO 4.
Among the largest of Enterprise's projects to be deferred is a second PDH unit in Mont Belvieu. The project had an originally planned in-service date of first-quarter 2023, but this has been pushed into the following quarter. The unit will double propylene production at the facility to 3.3 billion tons per year. Construction was originally planned to begin this summer, with S&B providing EPC. For more information, see Industrial Info's project report.
Projects that have been cancelled in the wake of the pandemic include the expansion of a butane isomerization unit at Mont Belvieu. The project would have expanded liquefied butane capacity by 35,000 BBL/d to a total of 155,000 BBL/d to be used as feedstock for methyl tert-butyl ether (MTBE) and alkylate production. For more information, see Industrial Info's 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.
