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Winter Storms Hit Enterprise Products’ Q1

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Enterprise Products Partners pipelines were disrupted by winter storms in the first quarter of this year, reporting a 13% fall in volumes.

Gross operating margin from the partnership’s natural gas liquids (NGL) pipelines and storage business was $627m for the first quarter of 2021 compared to $653m for the first quarter of 2020. NGL pipeline transportation volumes were 3.3 million barrels per day (bpd) this quarter compared to 3.8 million bpd in the first quarter of last year.

  1. J. Teague, co-chief executive officer on Enterprise’s general partner, said that during the winter storms during mid-February most of its Texas assets went offline at some point. In addition, its Texas Intrastate natural gas pipeline, natural gas processing plants and storage facilities were impacted by rolling blackouts.

“The economic impact of lost revenues from these disruptions, higher power and natural gas costs, as well as losses on natural gas hedges, were mitigated by sales of natural gas to electricity generators, natural gas utilities and industrial customers to assist them in meeting their needs,” he explained.

Overall, pre-tax earnings rose to $2.25bn in the first quarter from about $1.98bn recorded in the same period of the previous year.

Teague said that in this quarter the company had seen stronger demand for crude oil, NGLs, primary petrochemicals and refined products as the United States and the rest of the world begin to “unevenly emerge from COVID-related lockdowns” and restart manufacturing facilities.

Higher commodity prices have been created by plants and refineries on the Texas and Louisiana gulf coast increasing utilization rates after completing repairs due to damage from the winter storms. These higher prices have supported an increase in producer drilling and completion activities, especially in the Permian Basin. “At the current level of activities, we are more confident in our most recent forecasts of US crude oil and NGL production,” continued Teague.

Teague also stated that the company continues to be on schedule to complete the expansion of its Acadian Gas system to Gillis, Louisiana to serve LNG markets, the expansion of its ethylene and propylene pipeline systems and the construction of the natural gasoline hydrotreater during the second half of 2021.

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