Enterprise Begins Initial Service on TW Products System
- The start of truck loading operations at the new Permian terminal in Gaines County, Texas, marks the beginning of the TW Products System's first phase.
- The system is designed to improve supply reliability and diversity for gasoline and diesel markets in the southwest United States.
- Retailers will have access to alternative sources of refined products, potentially leading to lower fuel prices for consumers in West Texas, New Mexico, Colorado, and Utah.
- The TW Products System is expected to be fully operational by the first half of 2024, with additional terminals in New Mexico and Colorado.
- Enterprise is repurposing segments of its Gulf Coast midstream network to supply the terminals, converting parts of its natural gas liquids pipeline systems for refined products transportation.
- None.
Insights
The initiation of truck loading operations at Enterprise Products Partners L.P.'s new Permian terminal signifies a strategic expansion within the energy midstream sector. With approximately 900,000 barrels of storage for gasoline and diesel and a truck loading capacity of 10,000 barrels per day, this development enhances the company's logistics capabilities, directly impacting the distribution efficiency of refined products. The significance of this project lies in its potential to stabilize supply chains and contribute to price competition in the southwest United States, a region that the company has identified as historically underserved.
By repurposing segments of its Gulf Coast midstream network for the Texas Western Products System, Enterprise is not only optimizing existing assets but also diversifying its service offerings. The conversion of natural gas liquids pipelines to accommodate refined products is a notable example of infrastructure flexibility, which could become a more common industry practice as companies seek to meet changing market demands. This strategic move could set a precedent for other midstream companies, potentially leading to a shift in how pipeline systems are utilized across the sector.
From a market perspective, Enterprise's expansion into the southwest refined products market is a calculated effort to capture demand in a region with fewer competitive pressures. The company's ability to provide alternative sources of refined products is expected to exert downward pressure on fuel prices, which could translate into increased market share and customer loyalty. The long-term implications for Enterprise include not only revenue growth from new operations but also the strengthening of its market position in the face of fluctuating oil and gas prices.
Understanding the broader impact, the TW Products System's completion could influence regional fuel supply dynamics, potentially benefiting local economies through lower consumer fuel prices. However, the extent of this impact will depend on various factors, including the pace of infrastructure completion, regulatory considerations and the responsiveness of the market to these new supply channels. Stakeholders, including investors and regional businesses, should monitor the progression of the remaining system components to gauge the full scope of Enterprise's strategic initiative.
Financially, the operational commencement of the new terminal is likely to be reflected in Enterprise's future earnings reports. The capital expenditure involved in repurposing pipeline systems and constructing new terminals is substantial and the return on investment will be closely scrutinized by investors. The company's ability to leverage its integrated network and deliver refined products efficiently could lead to margin improvements, particularly if the system operates at or near its projected capacity. However, it's important to consider the capital intensity of the energy sector and the time lag between investment and return.
Moreover, Enterprise's stock valuation may be influenced by the perceived success of this project. If the company can demonstrate a clear path to increased profitability through this expansion, investor confidence is likely to rise. Conversely, any delays or operational challenges could have a negative impact on the stock's performance. As such, the financial community will be paying close attention to the execution of the TW Products System's remaining phases and the company's ability to meet projected operational timelines.
Enterprise's Hobbs TW Products terminal is located in
“Once completed, the TW Products System will provide supply reliability and diversity to the historically underserved gasoline and diesel markets in the southwest United States,” said A.J. “Jim”
To supply the terminals, Enterprise is converting segments of its Chaparral and Mid-America natural gas liquids (“NGLs”) pipeline systems to accommodate refined products. Utilizing a batched delivery system will give the company the ability to continue transporting mixed NGLs and NGL purity products in addition to gasoline and diesel.
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
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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Randy Burkhalter, Investor Relations, (713) 381-6812 or (866) 230-0745
Rick Rainey, Media Relations (713) 381-3635
Source: Enterprise Products Partners L.P.
FAQ
What is the purpose of Enterprise Products Partners L.P.'s (EPD) Texas Western Products System?
When is the TW Products System expected to be fully operational?
How is Enterprise repurposing its Gulf Coast midstream network to supply the terminals?
What is the truck loading capacity at Enterprise's new Permian terminal in Gaines County, Texas?
How many barrels of storage does the facility at the new Permian terminal have for gasoline and diesel?
