Enterprise Products’ (EPD) Mont Belvieu complex in Texas acts as a hub for the supply, fractionation, storage, and distribution of NGLs, crude oil, and petroleum products. With access to Oiltanking Partners’ (OILT) waterborne markets and storage position, EPD will be able to integrate its supply chain more efficiently.
Other MLPs that are building LPG or ethane export terminals include Targa Resources (NGLS). Exports will also benefit the upstream energy companies like Chesapeake Energy (CHK) and Range Resources (RRC). CHK and RRC are components of the S&P Oil and Gas Exploration and Production ETF (XOP).
Enterprise Products’ Mont Belvieu complex
Oiltanking Partners’ (OILT) Oiltanking marine terminal on the Houston Ship Channel is connected to EPD’s Mont Belvieu, Texas, complex and integral to the growth of EPD’s LPG export, octane enhancement, and propylene businesses.
EPD’s largest underground storage facility is located in Mont Belvieu, Texas. This facility consists of 35 underground storage caverns for petrochemical refiners in Gulf Coast, Texas. Caverns are used to store and redeliver NGLs and petrochemical products.
Since the oil and gas shale boom has happened in the U.S., along with innovative technologies like hydraulic fracturing, crude oil, natural gas, and NGL production have increased by leaps and bounds. This growth has increased demand for export facilities because domestic supply has been abundant. This abundance has benefited OILT, which has marine terminal infrastructure.
In its Mont Belvieu facility, EPD fractionates NGLs produced in the supply basins in the Eagle Ford Shale, Rocky Mountains, Mid-continent, Permian Basin, and San Juan Basin. In 2Q14, EPD added Fractionators VII and VIII, which added 179 Mbpd to the quarter’s fractionation volume, increasing overall volumes by 25%.
In May 2014, EPD began exports of diesel from its Beaumont refined products marine terminal. It also began exporting motor gasoline from that facility in August.
OILT has a terminal in Beaumont, which serves as a regional hub for refined petroleum products for refineries located in the Gulf Coast region.
Enterprise starts condensate exports
On June 23, 2014, the U.S. Commerce Department gave Pioneer Natural Resources (PXD) and Enterprise Products Partners (EPD) permission to export a type of ultra-light oil known as “condensate.” EPD started exporting refined products from its Beaumont Marine terminal in Texas.
But how much business does EPD bring in to OILT? To find out, check out the next part of this series.
To learn more, read the articles on our Energy & Power sector page. Learn what’s happening in the industry.