Enterprise Products to Invest More Than $3 Billion in Growth Projects in 2019

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Researched by Industrial Info Resources (Sugar Land, Texas)--As U.S. production of crude oil, natural gas and natural gas liquids (NGL) remains strong, midstream companies such as Enterprise Products Partners (NYSE:EPD) (Houston, Texas) are reaping the benefits. In the first quarter of 2019, Enterprise showed strong net income, which it is investing in an increasing number of growth projects. The company expects growth capital investment of between $3.4 billion and $3.8 billion in 2019.

In the company's first-quarter earnings conference call, Enterprise Chief Executive Officer Jim Teague spoke of the company's recently completed and underway projects. "As to capital projects on the supply side, our focus on the Permian continues," said Teague. Among the projects completed in the first quarter was the Shin Oak NGL pipeline, which Teague said was completed four months ahead of schedule. The $1 billion, 571-mile pipeline will carry 550,000 barrels per day (BBL/d) (expandable to 600,000 BBL/d) of NGLs from the Permian Basin to Enterprise's fractionation complex in Mont Belvieu, Texas. The pipeline was completed in February and is currently running at 250,000 BBL/d as it ramps up. For more information, see Industrial Info's project report.

At the Mont Belvieu complex, Enterprise is underway with construction of an iso-butane dehydrogenation (IBDH) unit, which Teague said would be completed by the end of the year. Construction began early last year. The unit will produce 425,000 metric tons per year of isobutylene. Optimized Process Designs LLC (Katy, Texas) is providing engineering, procurement and construction (EPC) on the project, which has an estimated total investment value (TIV) of $1 billion. For more information, see Industrial Info's project report.

The company also is increasing NGL fractionation capacity. Teague said, "We expect fractionation capacity to be tight again in the second half of '19. Anticipating further NGL supply growth, we are currently constructing two new fractionators at Mont Belvieu. We're also developing PDH [propane dehydrogenation] 2, and we feel confident that this project will be successfully commercialized."

Construction on Fractionation Train 10 at Mont Belvieu began in the third quarter of last year. The 150,000-BBL/d unit will increase the facility's total fractionation capacity to 905,000 BBL/d when it is completed in early 2020. Train 11, which is expected to be completed later in 2020, will increase fractionation capacity by an additional 150,000 BBL/d. S&B Engineers and Constructors Limited (Houston) is providing EPC for both trains. For more information, see Industrial Info's project reports on Train 10 and Train 11.

PDH 2 is in the late engineering stage, and construction on the $1.2 billion project is expected to start this year. The unit would double the Mont Belvieu facility's propylene production capacity to 3.3 billion pounds per year. Construction is expected to last a little more than three years. For more information, see Industrial Info's project report.

"On the natural gas/natural gas liquids side," said Teague, "we expect to complete the third processing train at Orla this quarter and Mentone I [both in Texas] in the first quarter of next year." Teague said when the facilities were completed, Enterprise would have about 1.6 billion cubic feet per day (Bcf/d) of natural gas processing capacity and 240,000 BBL/d of liquids production out of the Permian. Orla Train III will bring the plant's total capacity to 990 million cubic feet per day of natural gas and 120,000 BBL/d of NGL. The train in Mentone will process 300 million cubic feet per day and 40,000 BBL/d of NGL. Optimized Process Designs is providing EPC on the projects. For more information, see Industrial Info's project reports on the Orla and Mentone projects. More natural gas processing projects may be in store for Enterprise. Teague said, "We're in discussions with customers that could lead to our underwriting two more processing trains at Mentone."

Among Enterprise's projects in the planning stage is a new crude oil pipeline out of the Permian. Teague said, "Many of you have seen that we filed permits to construct another crude pipeline out of Midland. If successful, this would be our Midland-to-ECHO III Pipeline. ... We're receiving serious interest from customers." The pipeline would run approximately 500 miles to carry 400,000 to 450,000 BBL/d of additional takeaway capacity from the Permian Basin to the ECHO terminal in Houston. For more information, see Industrial Info's project report.

Enterprise reported first-quarter 2019 net income of $1.3 billion, compared with $901 million in the first quarter of 2018.

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.