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Which Segment Drove Enterprise Products Partners’ 2Q17 Earnings?

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NGL Pipelines and Services

Enterprise Products Partners’ (EPD) NGL Pipelines and Services segment reported a 6% YoY (year-over-year) increase in its 2Q17 operating income. NGL Pipelines and Services is the company’s largest segment—it contributes nearly 55% of its total operating income. The segment’s earnings growth was driven by natural gas processing and the related NGL (natural gas liquids) marketing business. Enterprise Products Partners’ NGL production rose in 2Q17 compared to 2Q16 due to its natural gas processing plants in the Rocky Mountains, Louisiana, and Mississippi. Earnings from NGL marketing activities increased due to higher sales margins.

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The segment’s NGL pipelines and storage business also contributed to the earnings growth in 2Q17. The growth was driven by higher NGL transportation volumes. Finally, the segment’s Mont Belvieu NGL and related product storage business contributed to an increase in earnings driven mainly by higher fees.

Crude Oil Pipelines and Services

Operating income from Enterprise Products Partners’ Crude Oil Pipelines and Services segment rose 33% YoY in 2Q17. The growth was driven by higher crude oil pipeline transportation volumes. The segment’s 2Q17 earnings were impacted positively by $15 million mark-to-market gains on certain financial instruments in 2Q17—compared to $47 million mark-to-market losses in 2Q16.

Earnings from the segment’s West Texas Pipeline and Eagle Ford Pipeline increased YoY in 2Q17 primarily due to an increase in volumes as a result of increased Permian Basin production.

Finally, the operating income from Seaway pipeline increased due to higher fees and volumes.

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Natural Gas Pipelines and Services

Enterprise Products Partners’ Natural Gas Pipelines and Services segment’s operating income rose 10% YoY in 2Q17. The growth was driven by higher natural gas transportation volumes and proceeds from a legal settlement for a 2012 incident.

Petrochemical and Refined Products Services

The company’s Petrochemical and Refined Products Services segment’s operating income rose 7% YoY in 2Q17 due to higher refined products and petrochemical marine terminal volumes and higher earnings from the segment’s octane enhancement, isobutylene, and propylene businesses.

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