With NGLs output in the Permian basin expected to rise by 700,000 b/d over 2023-25, Houston-based pipeline operator Enterprise Products plans to invest $3.1 billion in infrastructure projects to support its transportation, the company said Oct. 31.
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Register NowEnterprise has also started preparations to reconvert the Seminole Pipeline which currently transports crude oil, to carry NGLs by December 2023. The Seminole pipeline has capacity to transport 210,000 b/d of crude oil currently.
The infrastructure projects the company is investing in are a 550-mile Bahia pipeline, a gas fractionation unit and two gas processing plants -- all of which are expected to start service in 2025.
The Bahia pipeline will be able to transport 600,000 b/d of NGLs from the Delaware and Midland Basins to Enterprise's fractionation complex in Chambers County, Texas. It is projected to enter service in the first half of 2025. Enterprise chose this over partial looping of the Shin Oak pipeline, which would have added just 275,000 b/d.
"We looked at partial loops and didn't think that it would serve what we needed," co-CEO Jim Teague said in an earnings call Oct. 31.
"We felt like [Bahia] was the right size. I look at what someone like the Exxon CEO says about getting more efficient and getting better recoveries... I think we're just scratching the surface," Teague said on the call.
The company is converting Seminole because its needs "NGLs takeaway right now until Bahia gets in service," Teague said. The pipeline was converted from transporting NGLs to crude oil in 2019.
The fractionator 14 unit in Chambers County, Texas, will be able to fractionate 195,000 b/d of NGLs. Its associated deisobutanizer unit will be able to separate 100,000 b/d of butane, the company said. It is expected to be completed in the second half of 2025.
Enterprise has already started constructing the two announced natural gas processing plants -- the Orion plant in the Midland basin and Mentone 4 in the Delaware Basin. Both will have capacity to process 300 MMcf/d of natural gas and extract 40,000 b/d of NGLs and are expected to be in service in H2 2025. They will bring the company's processing capacities to 1.9 Bcf/d in the Midland and 2.5 Bcf/d in the Delaware basins by 2025. They build on two other 300 MMcf/d projects -- the Leonidas in Midland and the Mentone 3 -- which are due to be in service in the first quarter of 2024.
In the third quarter of 2023, the company brought into service the 150,000 b/d fractionator 12 unit in Chambers County, and the 300,000 MMcf/d Poseidon gas processing plant in the Midland basin. Earlier this month, it began operations at the 300 MMcf/d Mentone 2 unit in the Delaware basin.
Natural gas transportation volumes rose 5% year on year to a record 18.4 TBtu in Q3. Fee-based gas processing volumes also hit a record 5.9 Bcf/d, up from 5.2 Bcf/d in Q3 2022. Enterprise's NGLs pipeline volumes were 3.97 million b/d in Q3, up from 3.7 million b/d in the same quarter of 2022.
Oil volumes
Enterprise saw total crude oil transportation volumes reach a record 2.6 million b/d in Q3 compared to 2.2 million b/d in Q3 2022, company said on the earnings call.
Total crude oil marine terminal volumes increased to a record 988,000 b/d in Q3, compared to 824,000 b/d for the same quarter last year.
While year-on-year transport volumes were on the rise, Enterprise expanded its focus to crude quality specifications.
During Q2, the company implemented an initiative to monitor crude receipts "to ensure those receipts meet our specifications, which mirror the Platts Dated Brent specification," co-CEO Jim Teague said.
"Our focus on quality is extremely important to the entire producer community, in order to ensure that [US] Gulf Coast crude remains highly desirable in global markets," he added.
Crude quality has also improved on the Eagleford system, "not only making it easier to sell... but improving the price," Teague said.
Since adopting the initiative, the company noted that every WTI cargo loaded since May has met the Platts specification, accounting for over 100 cargoes of crude oil. Platts is a part of S&P Global Commodity Insights.
Enterprise reported a net income of $1.35 billion in Q3, down by 3% from the same quarter of 2022.