Enterprise Products Oil Pipeline Volumes Drop Amid Winter Storms
NEW YORK (Reuters) — Enterprise Products Partners LP on Monday said volumes across its pipelines dropped by 13% in the first quarter as producers and refiners were hit by winter storms, causing damage to facilities and disrupting shipments.
Overall pipeline volumes dropped 13% to 6 million bpd while total crude oil pipeline transportation volumes fell to 1.9 million bpd in the first quarter from 2.4 million bpd a year earlier.
Still, the company had a net benefit of about $250 million in the first quarter from the storms, helped by sales of natural gas to electricity generators, natural gas utilities and industrial customers.
A deep freeze that swept parts of the United States in February knocked out a third of U.S. oil refining capacity and sent prices for natural gas and electricity to record levels.
"Today, Texas and Louisiana Gulf Coast petrochemical plants and refineries have completed repairs and have increased rates with both industries realizing some of the best margins we have ever seen," co-Chief Executive Officer Jim Teague said during the quarterly earnings call with analysts.
U.S. crude production growth has slowed significantly over the past year as investors pressure companies to focus on boosting returns rather than growing volumes.
Nearly half of all oil pipelines from the Permian basin, the biggest U.S. oilfield, were expected to be empty by the end of the year, analysts and executives have said.
Higher oil prices and improved outlook for global demand are, however, starting to prompt an increase in activity, Enterprise executives said.
The company expects about 1.8 million bpd of incremental crude output over a three-year period, with the majority of growth coming in 2022 and 2023 and dominated by the Permian basin of Texas and New Mexico.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) jumped to $2.25 billion in the first quarter from about $1.98 billion a year earlier.
Shares of the company fell about 0.2% in morning trading.
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