May 8, 2023 [Reuters] – Enterprise Products Partners’ (EPD.N) first-quarter crude oil pipeline volumes edged slightly higher, the pipeline and storage company said on Tuesday, helped by production growth in the top U.S. shale basin.
Enterprise has remained bullish on oil production from the Permian Basin, spread across Texas and New Mexico, and is looking to build a crude oil export terminal on the Gulf Coast to help push some of those barrels into the foreign market.
The company’s Sea Port Oil Terminal (SPOT) project received a record of decision late last year, a major milestone in the process to obtain a license.
Enterprise said on Tuesday it expects the SPOT project to receive other permits and a license in the second half of 2023, Jim Teague, the company’s co-chief executive officer, told analysts on a conference call.
“Across our integrated system we continue to see crude oil, natural gas and NGL production growth from the Permian Basin,” Teague said in a statement, adding that domestic and international demand for U.S. energy and energy products remains resilient.
Enterprise sees growth opportunities from gathering and processing in the Permian broadly, the company said.
Total crude oil pipeline transportation volumes rose to 2.3 million barrels per day (bpd) in the three months to March 31, from 2.2 million bpd a year earlier, the company said.
Crude oil marine terminal volumes rose 5.7% to 841,000 bpd.
However, gross operating margin from its crude oil pipelines and services segment eased 4.3% to $397 million in the first quarter, partly due to expiration of minimum volume commitments on a key pipeline.
Overall net income rose 6.8% to $1.4 billion, or 63 cents per share.
The results are “a healthy start to 2023 earnings,” wrote Tudor Pickering Holt & Co analyst Colton Bean. He said they bode well for EPD’s unofficial target of $9.3 billion in full-year earnings before interest, taxes, depreciation and amortization.
Natural gas transportation volumes increased to a record 18.0 trillion British thermal units per day (TBtupd) in the first quarter compared with 16.4 TBtupd a year ago.
Enterprise, however, warned that lower natural gas prices were beginning to temper activity and growth in dry natural gas plays such as the Haynesville and Eagle Ford.
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