Energy Transfer LP had second-quarter 2020 net income of $353 million, compared with $879 million in second-quarter 2019. The company said results were impacted by the COVID-19 related economic slow-down resulting in lower volumes and market prices among several of its core segments.
In response to current market conditions, Energy Transfer reduced its growth capital outlook by an additional $200 million and now expects to invest about $3.4 billion in 2020. In first-half 2020, the company spent about $1.8 billion on growth capital projects. It expects growth capital expenditures to be about $1.3 billion in 2021 and $500-700 million in 2022 and 2023. Energy Transfer expects about 80% of growth capital in 2020 to be spent on projects expected to be in-service in 2020 or early 2021.
Energy Transfer’s NGL and refined products segment is the focus of 70-75% of planned 2020 capital expenditures. Among the projects included are:
- 400,000-b/d Lone Star Express expansion, running 362 miles of 24-in. OD pipe between Wink, Tex., and the existing Lone Star Express 30-in. OD pipeline south of Fort Worth. Expected to enter service fourth-quarter 2020.
- Mariner East (ME) System. ME2, in service; ME2X, 16-in. OD nearing completion.
- Nederland LPG, Orbit export terminal. LPG export projects in Nederland, Tex., will bring total export capacity to 500,000 b/d by end-2020, further integrating its Mont Belvieu and Nederland assets, Energy Transfer said during its earnings conference call. Commissioning ships for the 180,000-b/d Orbit ethane export joint venture with Satellite Petrochemical will begin arriving in November 2020.
- Fractionation Plant VII, Mont Belvieu, 150,000 b/d, placed in service February 2020.
The planned addition of Frac VIII in first-quarter 2022 will bring Energy Transfer’s total Mont Belvieu fractionation capacity to more than 1-million b/d.
Energy Transfer reported record high transportation and fractionation volumes in its NGL transportation and services segment. It also achieved record high gathering and processing volumes in Midland basin near the end of second-quarter 2020. The company said it exited second-quarter 2020 with an upward trend in volumes on the majority of its oil, natural gas, and NGL assets.
NGL transportation volumes increased to 1.4 million b/d from 1.3 million b/d due to higher throughput volumes on Energy Transfer’s Mariner East pipeline system. Throughput on its Texas NGL pipeline system also increased, due to higher receipt of liquids production from both wholly-owned and third-party gas plants primarily in the Permian and North Texas regions. The company fractionated 836,000 b/d of NGL in second-quarter 2020 vs. 701,000 b/d in second-quarter 2019.
Energy Transfer said the sharp year-on-year decline in its refined products transportation volumes—to 377,000 b/d from 628,000 b/d—was due to closure of a third-party refinery during third-quarter 2019, which negatively impacted supply to its refined products transportation system, and less domestic demand for jet fuel and other refined products.
The company’s crude transportation volumes were also lower: 3.6-million b/d vs. 4.3 million b/d. It attributed the lower volumes to decreased demand on its Texas pipeline system and its Bakken pipeline.
A US appeals court on Aug. 5, 2020, ruled that Energy Transfer’s 570,000-b/d Dakota Access pipeline would not have to be shut down pending completion of another environmental impact statement (EIS). The company said in response to a question asked during its earnings conference call that it’s not certain whether the US Army Corp of Engineers has started the new EIS process.