Both enterprising and productive, Enterprise Products Partners is a leading player in the North American natural gas, natural gas liquids (NGL), and crude oil industries, with a range of processing, transportation, and storage services. Operations include natural gas processing, NGL fractionation, petrochemical services, and crude oil transportation, including 51,300 miles of pipelines, 14 billion cu. ft. of natural gas storage, and 225 million barrels of NGL, refined products, and crude oil storage capacity. It also has about 22 NGL fractionators, and some 131 barges and 63 tow boats. The hub of Enterprise Products Partners' business is Houston's Mont Belvieu refinery complex.
Enterprise provides midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. It has five reportable segments: NGL Pipelines and Services; Onshore Natural Gas Pipelines and Services; Onshore Crude Oil Pipelines and Services; Offshore Pipelines and Services; and Petrochemical and Refined Products Services.
Its services include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation and storage; LPG import and export terminals; crude oil gathering and transportation, storage and terminals; and offshore production platforms; petrochemical and refined products transportation and services. The company also has a marine transportation business that operates primarily on in inland and Intracoastal Waterway systems in the US and in the Gulf of Mexico.
The NGL Pipelines and Services segment (40% of Enterprise's 2014 sales) includes natural gas processing plants and related NGL marketing activities, 19,300 miles of NGL pipelines, NGL and related product storage facilities, and 15 NGL fractionators. It also includes the company's NGL import and LPG export terminal operations. NGL marketing activities use a fleet of 740 railcars, most of which are leased from third parties.
The Onshore Natural Gas Pipelines and Services business segment (43% of 2014 sales) is engaged in gathering and transportation of natural gas in Colorado, Louisiana, New Mexico, Texas and Wyoming.
The Offshore Pipelines and Services business segment serves some of the most active drilling and development regions, including deepwater production fields in the northern Gulf of Mexico offshore Texas, Louisiana, Mississippi, and Alabama.
Sales and Marketing
NGL is sold to industrial and commercial customers and distribute through local gas distribution companies and other customers of natural gas purchased from producers, regional natural gas processing plants and the open market. Refined products terminal customers are typically billed a fee per unit of volume loaded.
Royal Dutch Shell is the company’s largest non-affiliated customer, accounting for 8.5% of Enterprise's revenues in 2014.
In 2014 Enterprise's net revenues edged up by about 0.5% in 2014.
Higher prices lifted revenues from natural gas and refined products partially offset by lower refined products sales volumes. Revenues from the marketing of crude oil decreased due to lower prices, partially offset by volumes. NGL sales declined due to lower prices, and lower sales volumes (caused by unscheduled plant maintenance outages). Midstream services revenues increased due to the ongoing expansion of its operations. (Recently completed assets such as the ATEX pipeline and the Rocky Mountain expansion of our Mid-America Pipeline System as well as certain assets in the Eagle Ford Shale and at their Mont Belvieu complex contributed $400 million of this increase). Revenues from Oiltanking also contributed to the slight increase in net revenues.
In 2014 net income increased by 9% due to higher net sales and a lower provision for income taxes due to changes in accruals for state tax obligations under the Revised Texas Franchise Tax.
Enterprise's cash from operating activities increased by 8% in 2014.
Enterprise's strategy is focused on building and managing an integrated network of midstream energy assets (including salt domes, and fractionation and natural gas processing plants) to take advantage of growing US market demand for natural gas, NGLs, crude oil and refined products.
The company’s business strategies are to capitalize on expected increases in the production of natural gas, NGLs and crude oil from development activities in various US production basins. Part of this strategy involves expansion through growth capital projects. It plans to continue to expand its assets through the construction of new facilities and to capitalize on expected increases in natural gas, NGL and crude oil production resulting from development activities in the Rocky Mountains, Mid-Continent, Northeast and US Gulf Coast regions, including the Niobrara, Barnett, Eagle Ford, Permian, Haynesville, Marcellus and Utica Shale plays and deepwater Gulf of Mexico production fields.
To raise cash to fund expansion and pay down debt, in 2015 the company sold its offshore Gulf of Mexico pipelines and services business to Genesis Energy for $1.5 billion.
In 2015 Enterprise announced plans to build a new rude oil and condensate pipeline from Midland to Houston, Texas and a natural gas processing facility in the Delaware Basin through a 50/50 joint venture with an affiliate of Occidental Petroleum Corporation.
In 2014 it announced plans to construct a new cryogenic natural gas processing plant in Eddy County, New Mexico and associated natural gas and NGL pipeline infrastructure to facilitate growing production of NGL-rich natural gas in the Delaware Basin (a prolific production area in West Texas and southern New Mexico). In addition it also announced plans to build a ninth NGL fractionator at its Mont Belvieu complex.
In 2014 the company teamed up with Plains All American Pipeline to jointly begin building a new condensate gathering system into their Three Rivers terminal and doubling the mainline capacity on their Eagle Ford Joint Venture Pipeline from Three Rivers to Corpus Christi, Texas.
That year Enterprise also completed construction of the first segment of the Aegis pipeline between Mont Belvieu and Beaumont, Texas. Supplying petrochemical customers, this 60-mile segment of 20-inch diameter pipeline is part of the 270-mile Aegis ethane pipeline that will create a 500-mile header system from Corpus Christi to the Mississippi River in Louisiana.
In 2014 the company developed two refined products export facilities to meet the growing demand for additional refined products export capability on the US Gulf Coast. The Beaumont marine terminal will initially handle Panamax size vessels. Subsequently, its expanded marine terminal on the Houston Ship Channel will handle up to Aframax class vessels.
Mergers and Acquisitions
Growing its Eagle Ford assets, in 2015 the company a bought a pipeline and processing company in Texas from Pioneer Natural Resources and Reliance Industries for $2.15 billion.
Growing its portfolio, in 2014 the company acquired the general partner and related incentive distribution rights, 15,899,802 common units and 38,899,802 subordinated units in Oiltanking Partners L.P. held by Oiltanking Holding Americas, Inc. for $4.41 billion. Oiltanking Partners is a major storage provider of crude oil, liquid chemicals, and gas product
The company is investing heavily in serving shale plays, especially the Eagle Ford in South Texas, and is building midstream facilities to serve the surge in natural gas production. In 2012 it opened a fifth NGL fractionator at its Mont Belvieu facility to process Eagle Ford hydrocarbons, and a fifth in 2012.
That year Enterprise joined Enbridge Energy Partners and Anadarko Petroleum in advancing development of the Texas Express Pipeline by the companies' joint venture. The 20-inch diameter pipeline will extend about 580 miles, from Skellytown, Texas, to the Mont Belvieu NGL fractionation complex. The pipeline also provides access to other producers in several regions: West Texas, the Rocky Mountains, southern Oklahoma, and the Mid-continent area.
In 2010, in a move to increase its footprint in the lucrative Haynesville/Bossier Shale play, Enterprise acquired two natural gas gathering and treating systems in northwest Louisiana and East Texas from M2 Midstream LLC for $1.2 billion.
In a major expansion move, in 2009 the company acquired rival TEPPCO Partners L.P. in a $26 billion all-stock deal, which boosted its pipelines and oil, refined products, and NGL storage capacity. The TEPPCO Partners purchase made the company the largest publicly traded energy partnership in the US. The expanded company's assets include 60 liquid storage terminals, 25 natural gas storage facilities, 17 fractionation facilities, and six offshore hub platforms.
That year the company acquired Enterprise GP Holdings, which controlled the general partner of Enterprise. The $8 billion deal was aimed at reducing long-term capital costs and simplifying the business structure of Enterprise Products Partners.
The family of Chairman Dan Duncan controls a 35% stake in Enterprise.