Enterprise Products Partners LP late Monday launched a big expansion of its oil export facilities on the Texas coast, which it is linking to continued Permian Basin growth.
The Houston partnership also has begun service on the third train at its Orla cryogenic natural gas processing plant in West Texas, increasing capacity at the Reeves County facility in the Permian to 900 MMcf/d and pushing liquids production to 140,000 b/d-plus. Throughout the Permian, Enterprise said it now is able to process 1.3 Bcf of gas and produce 200,000 b/d of natural gas liquids (NGL).
“The three trains at Orla that have been brought online over the past year reflect Enterprise’s agility and commitment to providing timely and efficient solutions for facilitating production growth in the prolific Permian Basin,” said general partner CEO A.J. “Jim” Teague. “And we are not through yet expanding our processing capabilities in the Permian.”
Enterprise increased its 2019 capital spending following strong first quarter results.
“The Mentone cryogenic natural gas processing facility in Loving County, TX, which will have the capacity to process 300 MMcf/d of natural gas and extract in excess of 40,000 b/d of NGLs, is on schedule for completion in the first quarter of 2020, and we are actively negotiating contracts with customers to underwrite additional capacity,” Teague said.
Orla and Mentone link customers to the company’s integrated pipeline network, including the recently completed Shin Oak pipeline and the Texas Intrastate natural gas system. In addition, the nation’s No. 1 NGL complex in Mont Belvieu near Houston, which it owns, has 300,000 b/d of fractionation capacity under construction that is set for completion in 2020.
Enterprise, already controlling an extensive system of oil and NGL export facilities and docks on the Houston Ship Channel (HSC), also late Monday announced three additional expansion projects to increase capacity to load liquefied petroleum gas (LPG), polymer grade propylene (PGP) and crude from the Enterprise Hydrocarbon Terminal (EHT).
The partnership now has nameplate LPG loading capacity of 660,000 b/d from the Enterprise Hydrocarbon Terminal, and it has a project underway to add 175,000 b/d of LPG loading capacity, which is set for completion later this year.
“The additional projects…will increase incremental LPG loading capacity by another 260,000 b/d and are expected to be in service in the third quarter of 2020,” management said. “When completed, the projects will give EHT nameplate capacity to load up to almost 1.1 million b/d of LPG, or approximately 33 million b/month.”
In response to “record demand” for PGP by international markets, Enterprise also is adding refrigeration facilities at its HSC terminal to load up to an incremental 67,200 b/d, or around 2 million b/d of refrigerated PGP. With the expansion, Enterprise said it could increase flexibility by offering customers the capability to co-load fully refrigerated PGP and LPG onto the same vessel. Completion is expected in late 2020.
In addition, Enterprise is building an eighth dock at its HSC terminal with the capability to load 840,000 b/d of oil, increasing nameplate export capacity at the terminal to 2.75 million b/d, or nearly 83 million b/month. Expected to begin service in late 2020, the new dock would be able to accommodate a Suezmax vessel, the largest ship class that can navigate the HSC. The announced project follows initial plans issued last year to build a terminal able to accommodate very large crude carriers, or VLCCs.
“In total these expansions will enable us to load an incremental 1.3 million b/d of LPG, polymer grade propylene and crude oil,” Teague said. “These projects utilize the latest technology to modify and expand existing facilities and represent a very efficient use of capital with attractive returns.
“A key driver and catalyst to make these additional investments in our Houston Ship Channel complex is clarity and certainty” provided by recent legislation signed into law by Texas Gov. Greg Abbott “that ensures two-way traffic along the Houston Ship Channel.”
Enterprise estimated that by 2025, U.S. crude exports would increase to 8 million b/d from 3 million b/d. It also expects the domestic LPG export market to double to 2.8 million b/d from 1.4 million b/d.
“Much of this growth is being driven by increasing production from the Permian Basin of Texas,” management noted.
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