Which Segment Drives Enterprise Products Partners’ Performance?

Enterprise Products Partners (EPD) carries out its operations through the following four reportable segments:

• NGL Pipelines & Services
• Crude Oil Pipelines & Services
• Natural Gas Pipelines & Services
• Petrochemical & Refined Products Services

EPD’s Offshore Pipelines & Services segment primarily included its offshore business, which EPD sold in July 2015.

NGL Pipelines & Services is EPD’s largest segment. It contributed 54.0% of EPD’s EBITDA (earnings before interest, tax, depreciation, and amortization) in 3Q16. EBITDA for the segment rose just 1.0% year-over-year in 3Q16.

The segment processes natural gas and fractionates as well as markets NGLs (natural gas liquids). The segment transports and stores NGLs and related products. It also operates NGL export and import terminals. The above graph shows the segmental contribution to EPD’s quarterly EBITDA since the start of 2014.

EPD’s Crude Oil Pipelines & Services segment contributed 19.0% of EPD’s EBITDA in 3Q16, which was the same as 3Q15.

EPD’s Natural Gas Pipelines & Services segment’s 3Q16 EBITDA fell 7.0% year-over-year due to lower volumes. It also fell due to fees contributed by reduced producer drilling activity in the Eagle Ford and Barnett Shales. The segment contributed 14.0% to EBITDA in 3Q16. The segment gathers, stores, processes, and distributes natural gas.

EBITDA for EPD’s Petrochemical & Refined Products Services segment fell 10.0% in 3Q16. The fall was primarily driven by lower sales margins and volumes for the segment’s octane enhancement and high-purity isobutylene business.

The segment owns propylene fractionation, butane isomerization, octane enhancement, and high-purity isobutylene facilities. It also has refined products pipelines and terminals and offers marine transportation services. The segment contributed 13.0% to EPD’s EBITDA in 3Q16.