EPP profits up 18% in third-quarter 2022, Permian expansions continue

Enterprise Products Partners (EPP) LP’s profits rose 18% to $1.4 billion in third-quarter 2022 from $1.2 billion during the same period a year earlier. Revenues jumped more than 40% to $15.5 billion from $10.8 billion in third-quarter 2022. The company also posted a $1.4 billion profit in second-quarter 2022 and saw revenues surge nearly 70% year-on-year.

EPP’s pipelines transported a company-record 11.2 million b/d equivalent of NGL, crude oil, and other products in third-quarter 2022. It’s natural gas lines also operated at record pace, moving 17.5 trillion btu/day

The company’s natural gas processing and NGL marketing businesses reported a gross operating margin of $485 million for third-quarter 2022, an 84% increase from a year earlier. Higher NGL prices during the quarter also helped improve earnings.

EPP’s crude oil pipelines and services gross operating margin was eased $8 million year-on-year, to $415 million. Its natural gas pipelines and services gross operating margin rose 25% to $278 million. Gross operating margin for the petrochemical and refined products services segment was $353 million for third-quarter 2022 compared with $411 million for third-quarter 2021.

“These results were primarily driven by contributions from the partnership’s Midland basin natural gas gathering and processing business (acquired in February 2022) and higher gross operating margin from our natural gas processing, octane enhancement, and natural gas pipeline businesses,” co-chief executive officer Jim Teague said. 

Enterprise in February closed the deal to acquire Navitas Midstream Partners LLC from an affiliate of Warburg Pincus LLC for $3.25 billion in a debt-free transaction. Navitas Midstream’s assets included about 1,750 miles of pipelines and more than 1 bcfd of cryogenic natural gas processing capacity, expected to grow to more than 1.3 bcfd in first-half 2023. The deal included as many as 10,000 remaining drilling locations on dedicated acreage and no exposure to federal lands (OGJ Online, Jan. 10, 2022).

EPP plans to commission its 300-MMcfd Plant 6 in Midland basin during second-quarter 2023 and its second 300-MMcfd Mentone plant in Delaware basin during fourth-quarter 2023. Enterprise will add a third 300-MMcfd cryogenic plant at Mentone in Loving County, Tex., by end first-quarter 2024. The project will allow EPP to extract an incremental 40,000 b/d of NGL. Upon completion, Enterprise will have a total nameplate Delaware basin natural gas processing capacity of 2.2 bcfd and more than 300,000 b/d of NGL extraction.

In Midland basin, Enterprise is expanding its Navitas acquisition by adding a seventh natural gas processing plant in Midland County, Tex. Plant 7, which is supported by long-term acreage dedication agreements, will have a nameplate capacity of 300 MMcfd and will be able to extract more than 40,000 b/d of NGL. Following its end first-quarter 2024 completion, EPP will have a total of 1.6 bcfd of processing capacity and more than 220,000 b/d of NGL extraction in Midland basin.

Enterprise plans to expand its 600,000-b/d Shin Oak NGL pipeline system via looping and modification of existing pump stations. Initial expansion would add as much as 275,000 b/d by first-half 2025.