EPP earnings off $100 million despite 17% jump in gas processing margin

May 24, 2021

Enterprise Products Partners LP (EPP) had net income of $1.3 billion for first-quarter 2021, compared with $1.4 billion for first-quarter 2020. Net income for first-quarter 2021 was reduced by non-cash, asset impairment charges of $66 million, including $43 million related to EPP’s coal bed natural gas gathering system and Val Verde treatment plant in San Juan basin that was held-for-sale at Mar. 31, 2021.

Gross operating margin from EPP’s NGL pipelines and services segment increased to $1.1 billion for first-quarter 2021 from $1 billion for first-quarter 2020. Gross operating margin from Enterprise’s natural gas processing business and related NGL marketing increased 17% to $294 million for first-quarter 2021 compared with $252 million a year ago. Gross operating margin for the natural gas pipelines and services segment for the first quarter increased to $535 million compared with $284 million for first-quarter 2020.

Total capital investments were $682 million in first-quarter 2021, which included $144 million of sustaining capital expenditures. Included in these were $81 million associated with the planned turnarounds of EPP’s propane dehydrogenation and octane enhancement plants.

The company’s expectation for growth capital investments for 2021 and 2022 are $1.6 billion and $800 million, respectively. These estimates do not include capital investments associated with Enterprise’s proposed deepwater Seaport Oil Terminal (SPOT), which remains subject to governmental approval. EPP expects sustaining capital expenditures of about $440 million for 2021.

The proposed terminal would consist of two co-located 36-in. OD, 40.8-nautical mile crude oil pipelines from a shoreline crossing in Brazoria County, Tex., to the SPOT deepwater port. The deepwater port would connect to two single-point mooring (SPM) buoys through pipeline laterals. The SPM buoy system would be in water depths of 115 ft and consist of a pipeline end manifold, catenary anchor leg mooring system, and other associated equipment.

SPOT’s application is currently under US Department of Transportation Maritime Administration review. The 2-million b/d project would be sited off the coast of Freeport, Tex., and has Enbridge Inc. as a partner and committed shippers.