HOUSTON--()--Enterprise Products Partners L.P. (NYSE:EPD) today announced that it has executed long-term, fee-based agreements that effectively “sell out” the partnership’s 1.65 billion pounds per year propane dehydrogenation (“PDH”) facility that is scheduled to begin operations in the third quarter of 2015. In anticipation of a continuing decrease in supplies of propylene, Enterprise is having ongoing discussions with additional customers that could lead to the development of additional PDH capacity.
“We had very strong customer demand for the remaining capacity in our PDH unit”
In June 2012, Enterprise announced that it was proceeding with its plans to build a PDH facility that would consume up to 35,000 barrels per day (“BPD”) of propane to produce approximately 1.65 billion pounds per year (approximately 750,000 metric tons per year or 25,000 BPD) of polymer grade propylene (“PGP”). This facility will be integrated with the partnership’s existing propylene fractionation facilities that have a capacity of 5.3 billion pounds per year (approximately 2.4 million metric tons or 80,000 BPD), which will provide operational reliability and flexibility for both the PDH unit and the fractionation facilities. The PDH facility will also be integrated with Enterprise’s PGP storage facilities, 102-mile distribution pipeline system and export terminal.
“We had very strong customer demand for the remaining capacity in our PDH unit,” said A.J. “Jim” Teague, executive vice president and chief operating officer of Enterprise’s general partner. “This demand is being driven by the combination of a 38 percent decrease in propylene supplies since 2006 due to additional ethane consumption by U.S. petrochemical companies and the growing supplies of domestic propane from the U.S. shale plays. We are continuing our discussions with several customers that could lead to a second PDH unit or additional propylene manufacturing capacity.”
The weighted average term of our fee-based PDH contracts is over 15 years. These agreements are executed with customers that have, or are affiliated with parents that have investment grade debt ratings. Customers plan to consume the material with respect to three different derivative sectors further diversifying Enterprise’s customer base.
Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. The partnership’s assets include approximately 50,700 miles of onshore and offshore pipelines; 190 million barrels of storage capacity for NGLs, petrochemicals, refined products and crude oil; and 14 billion cubic feet of natural gas storage capacity. Services include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals; crude oil and refined products transportation, storage and terminals; offshore production platforms; petrochemical transportation and services; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems and in the Gulf of Mexico. For additional information, visit www.enterpriseproducts.com.
This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that Enterprise expects, believes or anticipates will or may occur in the future, including anticipated benefits and other aspects of such activities, events, developments or transactions, are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition and other risk factors included in the reports filed with the Securities and Exchange Commission by Enterprise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, Enterprise does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.