Enterprise Products Partners L.P. (NYSE: EPD) (“Enterprise”)
today announced four new capital projects to support continuing
production growth in the Permian Basin. The partnership also
announced it has begun initial steps to return the Seminole
Pipeline, which has a capacity of 210,000 barrels per day (“BPD”)
of crude oil, to natural gas liquid (“NGL”) transportation service
in December 2023. The four projects include two natural gas
processing plants, the Bahia NGL pipeline, NGL fractionator 14 and
an associated deisobutanizer (“DIB”) at Enterprise’s Chambers
County, Texas complex. Each of these projects is expected to begin
service during 2025.
Enterprise believes crude oil, natural gas and NGL production in
the Permian Basin will continue to grow throughout the decade.
Consistent with certain industry forecasts and current production
trends, Enterprise’s fundamentals group forecasts crude oil
production in the Permian Basin is on track to increase by over
700,000 BPD in 2023 and to grow by approximately 1.5 million BPD
for the three-year period ending 2025. Post 2025, the company
expects crude oil production from the basin to increase by up to
another 15 percent, or greater than 1.0 million BPD, reaching in
excess of 7.5 million BPD by the end of 2030. Commensurate with
these levels of crude oil production, the partnership believes NGL
production from the basin is on track to increase more than 200,000
BPD in 2023, and grow by 700,000 BPD for the three-year period
ending 2025. From 2025 to 2030, Enterprise believes NGL production
from the Permian could grow by more than 500,000 BPD to nearly 4.0
million BPD by the end of 2030.
Enterprise has started construction on the Mentone 4 natural gas
plant serving the Delaware Basin. Mentone 4 will have the capacity
to process over 300 million cubic feet per day (“MMcf/d”) of
natural gas to extract more than 40,000 BPD of NGLs. This plant is
expected to begin service in the second half of 2025. Construction
of Mentone 2, which also has the capacity to process in excess of
300 MMcf/d of natural gas, was completed earlier this month and has
begun operations. The previously announced Mentone 3 natural gas
processing plant, which also has the capacity to process over 300
MMcf/d, is currently under construction and scheduled to begin
service in the first quarter of 2024. Upon the completion of
Mentone 3 and Mentone 4, Enterprise will have approximately 2.5
billion cubic feet per day (“Bcf/d”) of natural gas processing
capacity in the Delaware Basin capable of extracting more than
330,000 BPD of NGLs.
Enterprise has also commenced construction on the Orion natural
gas processing plant, the partnership’s eighth plant in the Midland
Basin. Orion will have the capacity to process over 300 MMcf/d of
natural gas to extract more than 40,000 BPD of NGLs. This plant is
expected to be in service in the second half of 2025. Construction
of the previously announced Leonidas natural gas processing plant,
which also has the capacity to process in excess of 300 MMcf/d of
natural gas, is proceeding on schedule and is expected to begin
service in the first quarter of 2024. These plants in the Delaware
and Midland basins are supported by long-term producer dedications
and minimum volume commitments. Upon the completion of the Leonidas
and Orion plants, Enterprise will have 1.9 Bcf/d of natural gas
processing capacity in the Midland Basin capable of extracting more
than 270,000 BPD of NGLs.
Based on expected NGL production growth, along with the NGL
production from the Rockies and San Juan Basin, the partial looping
of the Shin Oak Pipeline would not have provided sufficient
capacity and would have resulted in higher long-term energy and
operating costs. Instead, Enterprise will build the Bahia NGL
pipeline, a 550-mile pipeline with the capacity to transport up to
600,000 BPD of NGLs originating from the Delaware and Midland
basins to Enterprise’s fractionation complex in Chambers County.
The pipeline will consist of a 24-inch diameter segment from the
Delaware Basin where it will connect to a 30-inch diameter segment
from the Midland Basin to Chambers County. This pipeline, which is
currently expected to be wholly owned by Enterprise, is projected
to begin service in the first half of 2025.
To provide incremental NGL transportation service until
construction of the Bahia Pipeline is completed, Enterprise has
begun preparations to convert the Seminole Red Pipeline from crude
oil service back to NGL service in December 2023. This pipeline has
been in crude oil transportation service since the second quarter
of 2019 and was known as Enterprise’s Midland-to-ECHO 2 crude oil
pipeline. Prior to 2019, the Seminole Red Pipeline was in NGL
service.
The final Permian growth project is Enterprise’s NGL
fractionator 14 in Chambers County. This plant will have the
capacity to fractionate up to 195,000 BPD of NGLs and the new
associated DIB unit will have the capability to separate up to
100,000 BPD of butanes. Construction is scheduled to be completed
during the second half of 2025.
“U.S. producers and oilfield service companies continue to push
the frontiers of efficiency and profitability through even longer
laterals, advances in precision and cube drilling, and continually
improving drilling and completion techniques,” said A.J. “Jim”
Teague, co-chief executive officer of Enterprise’s general partner.
“In addition, several producers are actively researching and
testing technologies that they believe could increase their
recoveries by up to 50 percent over time. Even if only partially
successful, this is going to be a ‘game changer’ and will further
strengthen U.S. energy security and dominance. As a midstream
energy company, we are seeing the results of these efficiencies and
enhancements at the wellhead, both in terms of speed to production,
and higher production. The organic investments we are announcing
today are necessary to facilitate the next phase of Permian
production growth, and will also complement our expansions of
downstream pipelines and marine terminals to deliver energy
products to growing domestic and international markets. These
projects bring our total portfolio of facilities under construction
to $6.8 billion. These attractive investments are core to our NGL
franchise and provide further visibility to increasing cash flow
per unit, which will support future distribution growth and returns
of capital to investors.”
Enterprise Products Partners L.P. is one of the largest publicly
traded partnerships and a leading North American provider of
midstream energy services to producers and consumers of natural
gas, NGLs, crude oil, refined products and petrochemicals. Services
include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and marine terminals; crude oil gathering, transportation,
storage and marine terminals; petrochemical and refined products
production, transportation, storage, and marine terminals and
related services; and a marine transportation business that
operates on key U.S. inland and intracoastal waterway systems. The
partnership’s assets include more than 50,000 miles of pipelines;
over 260 million barrels of storage capacity for NGLs, crude oil,
refined products and petrochemicals; and 14 billion cubic feet of
natural gas storage capacity. Please visit
www.enterpriseproducts.com for more information.
This press release includes “forward-looking statements” as
defined by the Securities and Exchange Commission. All statements,
other than statements of historical fact, included herein that
address activities, events, developments or transactions that
Enterprise and its general partner expect, believe or anticipate
will or may occur in the future are forward-looking statements.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially
from expectations, including required approvals by regulatory
agencies, the possibility that the anticipated benefits from such
activities, events, developments or transactions cannot be fully
realized, the possibility that costs or difficulties related
thereto will be greater than expected, the impact of competition,
and other risk factors included in Enterprise’s reports filed with
the Securities and Exchange Commission. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of their dates. Except as required by law, Enterprise
does not intend to update or revise its forward-looking statements,
whether as a result of new information, future events or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20231031323619/en/
Randy Burkhalter, Investor Relations, (713) 381-6812 or (866)
230-0745 Rick Rainey, Media Relations (713) 381-3635
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