Enterprise Expanding Houston Ship Channel Export Facility

Rhea-AI Summary

Enterprise Products Partners L.P. (NYSE: EPD) has announced a significant expansion project along the Houston Ship Channel to meet growing customer demand for natural gas liquids (NGL) export capacity. The company is increasing refrigeration capacity at its Enterprise Hydrocarbons Terminal (EHT), which will boost propane and butane export capabilities by approximately 300,000 barrels per day (BPD). This expansion, set to be operational by the end of 2026, will also enhance loading rates and create additional capacity for propylene exports.

Additionally, Enterprise is developing the Neches River Terminal (NRT) in Orange County, Texas. Phase 1 of NRT, expected to begin service in the second half of 2025, includes a new loading dock, an ethane refrigeration train with 120,000 BPD capacity, and a 900,000-barrel refrigerated tank. Phase 2, slated for the first half of 2026, will further increase ethane and propane loading capabilities.

Positive

• Expansion of EHT to increase propane and butane export capacity by 300,000 BPD
• Development of Neches River Terminal with phased capacity increases
• Increased loading rates for propane, butane, and propylene exports
• Strong customer demand for U.S. hydrocarbons and export capacity
• Growth capital for projects within existing forecasted expenditure ranges

Negative

• None.

Insights

Energy Infrastructure Analyst

Enterprise Products Partners' expansion of its Houston Ship Channel export facility is a significant development for the energy infrastructure sector. The addition of refrigeration capacity at the Enterprise Hydrocarbons Terminal (EHT) will increase propane and butane export capabilities by 300,000 barrels per day, a substantial boost to the company's liquefied petroleum gas (LPG) export capacity.

This expansion, coupled with the ongoing development of the Neches River Terminal (NRT), demonstrates Enterprise's strategic positioning to capitalize on the growing global demand for U.S. hydrocarbons. The phased approach at NRT, with its flexible product capacity, showcases the company's adaptability to market needs.

From an investor's perspective, these expansions are likely to strengthen Enterprise's market position in the midstream energy sector. The projects fit within the company's existing growth capital expenditure forecasts, suggesting prudent financial management. The increased export capabilities could potentially lead to higher throughput volumes and revenues, especially given the strong customer demand mentioned.

However, investors should consider potential risks such as:

• Global energy market volatility
• Regulatory changes affecting exports
• Competition from other export facilities

Overall, this expansion aligns with the broader trend of increasing U.S. hydrocarbon exports and positions Enterprise to potentially benefit from this growing market.

Financial Analyst

Enterprise Products Partners' expansion project represents a strategic investment in its export infrastructure. While specific financial figures for the expansion aren't provided, the company's statement that the growth capital fits within existing forecasted ranges for 2024-2026 is noteworthy. This suggests the expansion is well-planned and budgeted, potentially minimizing financial strain or the need for additional capital raising.

The increased export capacity could translate into higher revenue streams in the medium to long term. With an additional 300,000 barrels per day of propane and butane export capability at EHT, plus the phased capacity increases at NRT, Enterprise is positioning itself to capture a larger share of the growing U.S. hydrocarbon export market.

Investors should consider the following financial implications:

• Potential for increased revenue and cash flow once the expansions are operational
• Possible improvement in asset utilization rates
• Enhanced competitive position in the midstream sector

However, it's important to monitor the execution of these projects, as delays or cost overruns could impact the expected returns. Additionally, the long-term profitability will depend on global demand for LPG and ethane, as well as Enterprise's ability to secure long-term contracts for the new capacity.

Given Enterprise's track record and the apparent strong customer demand driving these expansions, this move appears to be a positive development for the company's long-term financial outlook.

HOUSTON--(BUSINESS WIRE)-- Enterprise Products Partners L.P. (NYSE: EPD) today announced that it is moving forward with a key expansion project along the Houston Ship Channel in response to continued strong customer demand for natural gas liquids export capacity. At the Enterprise Hydrocarbons Terminal (“EHT”), the company is adding refrigeration capacity that will increase propane and butane export capabilities by approximately 300,000 barrels per day (“BPD”). In addition to providing incremental capacity for liquefied petroleum gas (“LPG”), the expansion will increase instantaneous loading rates for propane and butane, while making additional capacity available for propylene exports. The expanded service is expected to begin by the end of 2026.

The need for increased LPG capacity at EHT is being driven by the success Enterprise has had in contracting the company’s flexible product capacity at its Neches River Terminal (“NRT”) being developed in Orange County, Texas, adjacent to the company’s Beaumont East refined products terminal. Phase 1 of the NRT buildout includes the addition of a new loading dock, an ethane refrigeration train with a nameplate capacity of 120,000 BPD, and a 900,000-barrel refrigerated tank that will accommodate loading rates up to 45,000 barrels per hour. Phase 1 is expected to begin service in the second half of 2025.

Phase 2 includes a second refrigeration train that will allow Enterprise to load up to 180,000 BPD of ethane, 360,000 BPD of propane, or a combination of the two. The second phase is expected to begin service in the first half of 2026.

Growth capital associated with the EHT and NRT projects fits within the company’s existing forecasted growth capital expenditure ranges for 2024-2026.

A.J. “Jim” Teague, co-chief executive officer for Enterprise’s general partner, said, “Enterprise has received significant interest in ethane and LPG exports systemwide. Additional interest in expanded capacity reflects continued demand for U.S. hydrocarbons and Enterprise’s ability to quickly and economically expand our footprint to meet those needs.”

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 300 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730925549/en/

Libby Strait, Investor Relations, (713) 381-4754 or (866) 230-0745, ecstrait@eprod.com

Rick Rainey, Media Relations, (713) 381-3635, rrainey@eprod.com

Source: Enterprise Products Partners L.P.

FAQ

What is Enterprise Products Partners' plan to expand its Houston Ship Channel export facility?

Enterprise Products Partners (EPD) is expanding its Enterprise Hydrocarbons Terminal (EHT) by adding refrigeration capacity to increase propane and butane export capabilities by approximately 300,000 barrels per day, with the expanded service expected to begin by the end of 2026.

How much will EPD's propane and butane export capacity increase with the new expansion?

The expansion at Enterprise Products Partners' (EPD) Enterprise Hydrocarbons Terminal will increase propane and butane export capabilities by approximately 300,000 barrels per day.

When is the expanded service at EPD's Houston Ship Channel facility expected to begin?

The expanded service at Enterprise Products Partners' (EPD) Houston Ship Channel facility is expected to begin by the end of 2026.

What are the details of EPD's Neches River Terminal development?

Enterprise Products Partners (EPD) is developing the Neches River Terminal in two phases. Phase 1 includes a new loading dock, an ethane refrigeration train with 120,000 BPD capacity, and a 900,000-barrel refrigerated tank, expected to begin service in the second half of 2025. Phase 2 will add a second refrigeration train, increasing capacity further, and is expected to begin service in the first half of 2026.