Enterprise and Customers Amend Crude Oil Agreements; Enterprise Cancelling Midland to Echo 4 Pipeline
September 09 2020 - 6:00AM
Business Wire
Enterprise Products Partners L.P. (NYSE:EPD) today announced
that it and certain of its customers have amended agreements that
provide Enterprise the ability to use the partnership’s existing
pipelines to support its crude oil transportation agreements and to
cancel the 450,000 barrels per day Midland-to-ECHO 4 crude oil
pipeline project (“M2E4”). Generally, the amendments provide for
the reduction of near term volume commitments in exchange for
extending the term of the agreements.
The cancellation of M2E4 will reduce aggregate growth capital
expenditures for 2020, 2021 and 2022 by approximately $800 million.
Based on currently sanctioned projects, we expect growth capital
expenditures, net of contributions from joint venture partners, for
2020, 2021 and 2022 to be approximately $2.8 billion, $1.6 billion
and $900 million, respectively. These estimates do not include
capital investments associated with our proposed deep water
offshore crude oil terminal (“SPOT”), which remains subject to
governmental approvals. We do not expect to receive the approvals
for SPOT in 2020. As a result of the cancellation, Enterprise
expects to record an impairment charge of approximately $45 million
to its earnings for the third quarter of 2020.
“We are very proud of our commercial team for responding and
working with our customers to amend these long-term agreements,”
said A. J. “Jim” Teague, co-CEO of Enterprise’s general partner.
“This is another example of Enterprise working with customers for a
‘win/win’ solution that allows our customers and Enterprise to
better allocate capital during the challenging times of the current
economic cycle while retaining long-term, fee-based volumes and
revenues for our assets. The capital savings from the cancellation
of M2E4 will accelerate Enterprise toward being discretionary free
cash flow positive, which would give us the flexibility to reduce
debt and return additional capital to our partners, including
through buybacks.”
Enterprise Products Partners L.P. is one of the largest publicly
traded partnerships and a leading North American provider of
midstream energy services to producers and consumers of natural
gas, NGLs, crude oil, refined products and petrochemicals. Our
services include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and export and import terminals; crude oil gathering,
transportation, storage and export and import terminals;
petrochemical and refined products transportation, storage, export
and import terminals and related services; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets include approximately 50,000 miles of pipelines; 260 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 Bcf of natural gas storage capacity.
This press release includes “forward-looking statements” as
defined by the Securities and Exchange Commission. All statements,
other than statements of historical fact, included herein that
address activities, events, developments or transactions that
Enterprise and its general partner expect, believe or anticipate
will or may occur in the future are forward-looking statements.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially
from expectations, including required approvals by regulatory
agencies, the possibility that the anticipated benefits from such
activities, events, developments or transactions cannot be fully
realized, the possibility that costs or difficulties related
thereto will be greater than expected, the impact of competition,
and other risk factors included in Enterprise’s reports filed with
the Securities and Exchange Commission. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of their dates. Except as required by law, Enterprise
does not intend to update or revise its forward-looking statements,
whether as a result of new information, future events or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200909005234/en/
Randy Burkhalter, Investor Relations, (713) 381-6812 or (866)
230-0745 Rick Rainey, Media Relations (713) 381-3635
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