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Enterprise Products Partners cuts capex, says oil pipeline volumes steady

June 18/2020

MOSCOW (MRC) -- Enterprise Products Partners LP has recently slashed its capital expenditures for 2020 by about USD1 billion as oil demand plummeted due to the coronavirus pandemic, but the midstream company said volumes across its oil pipelines have not yet declined, reported Reuters.

Oil demand has crashed about 30% globally as the coronavirus pandemic has restricted travel and sent crude prices briefly into negative territory last week as storage across the world fills rapidly.

Enterprise said it expects crude oil production out of the Permian basin, the largest US shale play located in Texas and New Mexico, to drop in coming months and said gathering and processing volumes are likely to decline.

About 1.5 million barrels per day (bpd) of crude in Enterprises pipelines in the Permian Basin are covered under long-term contracts, said Jim Teague, co-chief executive officer at Enterprise, on a first-quarter earnings call with analysts. Those take-or-pay agreements require customers to either supply oil or pay a specific amount to Enterprise.

Tanks have been converted to crude oil services. Our people have found places to store crude oil that two months ago, we didnt even know existed, he said.

Earlier this month Enterprise said it will give oil companies hunting for places to store crude the chance to ship barrels on its Seaway pipeline from the Gulf Coast to Cushing, Oklahoma, the main US storage hub.

The company said on Wednesday Seaway was virtually full.

Enterprise reported earnings-per-share of 61 cents. It reduced its guidance for total 2020 growth capital investments by approximately USD1 billion to a range of USD2.5 billion to USD3 billion and said six potential joint ventures are being negotiated, which could further reduce capex.

Regulators in Texas, the largest U.S. oil-producing state, are considering producer calls for cuts. Texas energy regulators will next week vote on the proposal to reduce state oil output.

As MRC reported earlier, Enterprise Products Partners and LyondellBasell Industries said in September 2019 they had executed long-term contracts to support construction of EPD's second propane dehydrogenation plant at the Mont Belvieu, Tex. complex. The decision to build the PDH 2 plant stems from recently executed long-term polymer grade propane (PGP) supply contracts between Enterprise and LyondellBasell Industries N.V.

Besides, we remind that Enterprise Products Partners' Mont Belvieu PDH in Texas restarted from planned maintenance in the first week of December, 2019. The PDH unit went offline for maintenance on November 13, 2019. That day, the company said in a filing with the Texas Commission on Environmental Quality that the RAC "B" turbine shut down, which resulted in flaring. The flaring was estimated to last 72 hours. The unit has a capacity of 750,000 mt/year.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

Enterprise Products Partners L.P. is an American midstream natural gas and crude oil pipeline company with headquarters in Houston, Texas. It acquired GulfTerra in September 2004. The company ranked No. 105 in the 2018 Fortune 500 list of the largest United States corporations by total revenue


mrcplast.com
Author:Margaret Volkova
Tags:PP, crude and gaz condensate, PP random copolymer, propylene, petrochemistry, Enterprise Products, LyondellBasell, Rossiya, USA.
Category:General News
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