Despite the effects of hurricanes Gustav and Ike in the Gulf of Mexico, Enterprise Products Partners LP turned in fourth quarter results that saw a 41% increase in net income from the prior-year period. And despite stormy financial markets, the partnership boasted that it has $1.6 billion of liquidity, including proceeds from a January equity offering.

Enterprise reported net income of $228 million, or 44 cents/unit, for the fourth quarter compared to net income of $162 million, or 30 cents/unit, for the fourth quarter of 2007. Net income for the fourth quarter of 2008 was reduced by approximately $36 million, or 8 cents/unit, due to the effects of Gustav and Ike, consisting of approximately $34 million for estimated lost business and $2 million for property damage repairs.

Revenue for the fourth quarter decreased to $3.6 billion from $5.3 billion in the same quarter of 2007 due primarily to lower commodity prices. Operating income was $353 million, a 31% increase over the $270 million of operating income realized in the fourth quarter of 2007.

“Enterprise had a solid fourth quarter and a record year despite the historic volatility in the energy and financial markets and the impact of two major hurricanes on our Gulf Coast operations,” said CEO Michael A. Creel.

For 2008 Enterprise posted record net income despite about $125 million in hurricane effects, including $77 million for estimated lost business and $48 million for property damage. For the year net income was $954 million, up from $534 million in 2007.

Creel noted that “since the beginning of the global credit crisis last September, we have proactively taken steps to significantly increase our liquidity and financial flexibility. During this time we have raised approximately $1.6 billion of debt and equity capital, demonstrating our ability to raise capital in difficult markets.”

This year Enterprise plans to begin operations at new facilities worth about $2.3 billion of capital investment. In the first quarter this includes the 1.1 Bcf/d Sherman Extension expansion of the partnership’s Texas Intrastate gas pipeline system and the 750 MMcf/d expansion of the Meeker gas processing plant. In the second half of the year Enterprise expects to begin operations on expansions to its Piceance Basin and Texas Intrastate gas pipeline systems (see Daily GPI, Oct. 24, 2008).

“We are cautious in our approach to 2009,” Creel said. “Our partnership begins the year with a healthy $1.6 billion of liquidity, including net proceeds from our January 2009 equity offering, and we have hedged approximately 67% of our expected equity NGL [natural gas liquids] production for the year. We are evaluating the development of several new energy infrastructure projects, the timing of which will be dependent on the needs, contractual commitments and creditworthiness of our customers as well as the availability and cost of capital. We also believe attractive acquisition opportunities may develop in 2009.”

Enterprise estimated that business lost due to the lingering effects of the hurricanes will amount to $15 million to $20 million in the first quarter of 2009 without consideration of recoveries from business interruption insurance, which will be reflected in income when received.

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