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Enable to capitalize on producers' increased oil focus amid low gas prices

With the prevailing slump in gas prices, Enable Midstream Partners is looking to take advantage of producers pivoting to more oil-rich areas of their operational footprints, executives said Aug. 6.

Enable's crude oil and condensate gathered volumes in the Anadarko Basin for the second quarter increased year over year as rig activity in the area shifted to oilier parts of the basin and the SCOOP shale play, executives said during the partnership's second-quarter earnings call. "[W]hat we expect to see with this pullback in gas prices is producers continuing to target more oily areas across our footprint," said Rodney Sailor, the president, CEO and director of Enable's general partner.

One of the reasons for Enable's 2018 acquisition of Velocity Holdings LLC was "to pick up that valuable piece of the commodity stream," Sailor said. The second-quarter increase in gathered volumes was also partly attributed to benefits arising from the acquisition, which gave Enable the only integrated crude and condensate gathering and transportation system in the SCOOP and Merge plays.

Enable is also considering branching out into the water business to augment its gas and crude businesses in the Anadarko Basin area. "Water is a line of business that we have continued to look at and ... to look at it makes sense," Sailor said.

Enable is also developing the 170-mile Gulf Run natural gas pipeline project designed to deliver up to 2.75 Bcf/d of gas to Gulf Coast markets. The project is supported by a 1.1-Bcf/d firm transportation contract from the proposed Golden Pass LNG export project backed by Exxon Mobil Corp. and Qatar Petroleum.

Enable has yet to finalize the scope of the pipeline project as it is still in discussions with potential customers in continuing efforts to increase the pipeline's size. However, it does not plan to move the project's in-service date, which is planned for 2022.

Sailor had said the project's costs would increase only if Gulf Run expands beyond the needs of Golden Pass.

The partnership reported second-quarter adjusted EBITDA of $281.0 million, up from $245.0 million in the prior-year period. Enable also declared a quarterly cash distribution of 33.05 cents per unit, an increase of about 4% over the previous quarter's distribution. It is payable Aug. 27 to unit holders of record as of Aug. 20.