As it looks to expand with investments in liquefied natural gas (LNG)- and liquids-focused infrastructure, Oklahoma City-based Enable Midstream Partners LP set an all-time high for natural gas volumes during the fourth quarter, management announced Tuesday.
Enable set a record-high for quarterly natural gas volumes, gathered and processed, in 4Q2018. Per-day natural gas gathered volumes grew for the 12th straight quarter, which management attributed to “strong rig activity” across the midstreamer’s footprint. Also during the quarter, Enable achieved a record high per-day total for crude oil and condensate gathered volumes.
As of Feb. 12, 54 rigs were drilling wells expected to connect to Enable’s gathering systems, including 40 in the Anadarko Basin, nine in the Ark-La-Tex Basin, two in the Arkoma Basin and three in the Williston Basin.
“Enable executed at a high level in 2018, with record natural gas and crude oil gathered volumes and natural gas processed volumes, which drove financial performance that outpaced 2017,” CEO Rod Sailor said. “We expanded our footprint by completing cost-effective, customer-focused expansion projects and strengthened our foundation for the long term with our acquisition of the Velocity system and announcement of the Gulf Run Pipeline project.”
Natural gas gathered volumes totaled 4.62 trillion Btu/d for the quarter, up 12% year/year driven by higher gathered volumes in the Anadarko and Ark-La-Tex basins. Natural gas processed volumes totaled 2.57 trillion Btu/d in 4Q2018, a 19% year/year increase.
Earlier this month ExxonMobil Corp. and Qatar Petroleum announced a final investment decision (FID) for the Golden Pass LNG terminal, with the export project emerging as a foundational shipper on the Gulf Run Pipeline.
After launching an open season last year for Gulf Run, a large diameter, 165-mile greenfield gas pipeline that would move supply from northern Louisiana to the Gulf Coast to supply more export projects, management said the pipeline has garnered interest from other shippers.
“We do not believe that the build will be a difficult build. We’ve already started site work…right now we’re very comfortable with the current structure as that stands,” Sailor said during a conference call Tuesday to discuss fourth quarter results. “We had a very successful open season, but it was a non-binding open season. It remains to be seen if that capacity will show up now that folks know that we have a foundation shipper and that we’re moving forward with the project.
“We continue see interest in it along that route for potential additional capacity.”
Added COO Craig Harris, “We continue to work with customers now that we have the foundation shipper and they’ve announced their FID. So it is a live project, and we’re working on it. We will re-engage and see what the interest is.”
Anticipating a “fairly lengthy” Federal Energy Regulatory Commission review process, management is targeting a late 2022 in-service date for Gulf Run and plans to disclose details of the project’s “ultimate size and capacity” later this year.
Enable reported quarterly revenues of $950 million, versus $806 million in 4Q2017. Revenues for the gathering and processing segment totaled $808 million, up from $657 million a year ago. Transportation and storage segment revenues totaled $325 million, versus $312 million a year ago.
Enable contracted or extended 600,000 Dth/d of transportation capacity in the fourth quarter, bringing its total for the year to more than 2 million Dth/d. This included the Enable Oklahoma Intrastate Transmission LLC system recontracting with its largest customer, Oklahoma Gas & Electric, for five years and roughly 336,000 Dth/d of firm service.
On the liquids side of its business, a deal last year to acquire oil and condensate gathering and transportation assets from Velocity Holdings LLC “fits in very well” with the recent activity observed in the Anadarko Basin, Sailor said.
For the last half of 2018 and heading into 2019, Enable has seen producer customers shift capital from the STACK (aka, the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties) to target more liquids-rich areas in the SCOOP (aka, the South Central Oklahoma Oil Province), the CEO said.
“That’s kind of the activity we’ve seen,” Sailor said. “We’ve been very pleased with well results across our footprint from our producer customers. I believe we will continue to see positive well results. But again, we’ve seen a lot of activity pick up in the SCOOP. That’s an area where we have significant infrastructure.” With the Velocity acquisition, Enable can now “also participate on the crude side as producers target the oilier areas in the SCOOP formation.”
Enable produced 136,740 b/d of natural gas liquids for the quarter, up 26% year/year. Crude oil and condensate gathered volumes totaled 76,590 b/d for 4Q2018, up 165% from the year-ago period, driven by the acquisition of Velocity’s gathering system in the Anadarko.
For the fourth quarter, Enable reported total net income of $175 million (38 cents/unit), up from $108 million (23 cents) in the year-ago quarter. For full-year 2018, Enable reported a net income of $523 million ($1.12), up from $437 million (92 cents) for full-year 2017.
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