Enterprise Products Moves toward Self-Funding Capital Projects



Self-funding focus

Enterprise Products Partners is focused on achieving self-funding for the equity portion of its growth capital. The company reduced its distribution growth rate in 3Q17 to support this objective. The company expects to achieve the desired self-funding in 2019. It expects to spend $2.5 billion to $3.0 billion on capital projects in 2019.

“Our strong financial performance in 2017 provided us the financial flexibility to provide our partners with 4.5 percent distribution growth and 1.2 times distribution coverage for the year while self-funding approximately 55 percent of the equity portion of our $3.1 billion of investments in organic growth capital projects and acquisitions during the year,” said Jim Teague, chief executive officer of Enterprise Products Partners (EPD).

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Update on key projects

In 4Q17, Enterprise Products moved ahead with some key capital projects. It began limited service on its Midland-to-ECHO pipeline. The pipeline is expected to be in full service in 2Q18.

Commissioning continued on EPD’s PDH (propane dehydrogenation) facility in 4Q17. Enterprise Products has nearly $5.5 billion of growth projects under construction. These projects include:

  • completing the Midland-to-ECHO crude oil pipeline
  • an NGL (natural gas liquid) fractionator at Mont Belvieu
  • two natural gas processing plants at Orla
  • expansion of liquids, crude oil, and refined products storage facilities

In 2017, some of Enterprise Products’ key projects included the expansion of its ATEX ethane pipeline, the expansion of refined products and crude oil marine terminals, and the expansion of propylene pipeline infrastructure.

Let’s see what analysts recommend for Enterprise Products Partners stock in the next part of this series.


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