Enterprise Products Partners says the energy industry will have a firmer foundation in 2017 as the gap between supply and demand narrows.
In its third quarter financial report Enterprises’ general partner CEO Jim Teague believes that the energy industry has ‘weathered the harshest part of this cycle’ as the company reported its adjusted EBITDA for the third quarter was $1,259 million compared to $1,310 million in the same period in 2015.
Its capital investments were $621 million in the third quarter and it currently has $5.6 billion of growth capital projects under construction that will begin commercial service between now and the end of 2018 including a crude oil pipeline and a natural gas processing plant.
Teague says: ‘While the industry may still experience bouts of commodity price weakness and volatility, we believe it has a firmer foundation going into 2017 as the gap between supply and demand has narrowed and should continue to do so.
‘We are seeing significant ‘green shots’ of producer activity as a result of the opportunity to hedge future sales of crude, NGLs and natural gas at economic levels.
‘In additional to the acceleration of investment in the Permian Basin, we are seeing activity attributable to new discoveries, deployment of new technology, including in well-established areas such as the Eagle Ford and Haynesville, and changes in ownership of acreage as some producers emerge from restructuring.’
He adds that during the third quarter, Enterprise transported more than five million barrels per day through out liquids pipelines and handled more than 1.2 million barrels per day at its marine terminals.
A construction project at Enterprise’s EFS Midstream assets added more than nine million barrels of additional storage capacity at the ECHO, EHT and Beaumont facilities since the third quarter 2015. The new tanks contributed a $13 million increase in gross operating margin in the 2016 third quarter compared to the same quarter in 2015.