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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 Enterprise’s
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 didn’t 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 |
