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Liquids Volumes Growing at Enterprise Products Partners

Demand for natural gas liquids transport/export capacity continues to grow, according to Enterprise Products Partners LP, which saw its third quarter results aided by increased ethane transport volumes.

Continued interest in shipping ethane from Mont Belvieu, TX, to petrochemical facilities in Texas and Louisiana has Enterprise  offering expansion capacity on its Aegis pipeline. A liquefied petroleum gas (LPG) export capacity expansion is under way, and an ethane export terminal is slated for completion in mid-2016.

Enterprise is holding a binding open season for a proposed expansion of the Aegis pipeline. The 270-mile Aegis system transports purity ethane from Enterprise's Mont Belvieu liquids storage complex to Texas and Louisiana.

The initial 60-mile segment from Mont Belvieu to Beaumont, TX, began service in September 2014, followed by the 48-mile portion from Beaumont to Lake Charles, LA, last September. The remainder of the Aegis pipeline, which will extend to the Mississippi River corridor area, is on schedule for completion by the end of 2015, Enterprise said.

The incremental capacity being offered reflects the continued "strong interest" in the Aegis pipeline and marks the second supplemental open season to expand the system, the partnership said. The expansion, which is to be achieved by the addition of pumps and related infrastructure, is expected to come online in stages through 2019, depending on the level of customer commitments.

Enterprise reported that during the third quarter gross operating margin from the Aegis as well as the Appalachia-to-Texas Express ethane pipeline increased by $8 million from the year-ago quarter due to a combined 42,000 b/d increase in transportation volumes.

During a third quarter earnings conference call Thursday, Jim Teague, COO of Enterprise's general partner, said more than 300,000 b/d of Aegis capacity has been contracted and the company is in talks with four companies about the remaining 100,000 b/d of capacity. Responding to a question, Teague said the customers Enterprise is in talks with are considering constructing ethylene production capacity.

The Aegis open season runs through Nov. 30. For information, contact John Kotara, (713) 381-8376, or jkotara@eprod.com.

During the conference call, Teague said that in December Enterprise will be bringing online its 11,000 bbl per hour LPG export expansion, increasing its total LPG export capability to 27,500 bbl per hour. "This capacity is fully contracted and we continue to add customers out past 2020," Teague said. "Our customers know that we have the export quality LPG and they know our record for delivery, which speaks to our ability to keep adding commitments in the out years as space frees up.

"Work is also continuing on our ethane export terminal, which will be up and running by midyear next year. We have the majority of this capacity contracted and we expect to execute another contract next week. With customers in Asia, Europe and South America, this demand pool project plays an important role in creating new global demand for U.S. ethane. Our folks are working with another Asian company and I would expect us to see us sold out by spring [see Daily GPIAug. 4, 2014]."

Enterprise net income for the third quarter was $658 million (32 cents/unit) compared to $699 million (37 cents/unit) for the third quarter of 2014. Third quarter 2015 results include non-cash asset impairment charges of $27 million (1 cent/unit) and net losses from asset sales of $12 million (1 cent/unit).

"Enterprise reported a 13% increase in liquid transportation volumes to a record 5.9 million b/d, which led to solid third quarter 2015 results," said Michael A. Creel, CEO of Enterprise's general partner.

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