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INTERVIEW: Enterprise expects more growth in petchems operations: co-CEO

Highlights

Company focused on growth in olefins operations

Push seen in trading, storage and transportation

Enterprise Products Partners expects to grow its petrochemical footprint in the coming years, capitalizing on what co-CEO Jim Teague calls a natural extension of the midstream titan's upstream operations.

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"We just feel like petrochemicals is a natural extension of our value chain," Teague said in an interview Dec. 16. "Look at this company. We want it to be here for the next 50 to 75 years. We've got to go beyond what we're doing right now."

Petrochemicals are not new to the company that runs about 50,000 miles of crude oil, natural gas, refined products, natural gas liquids and petrochemical pipelines as well as 260 million barrels of crude, refined products, NGL and petrochemical storage.

Enterprise built its first of seven propylene splitters in the 1970s, and over time built a polymer-grade propylene market hub that is the pricing point for Intercontinental Exchange and CME Group propylene futures contracts.

The company operates a propane dehydrogenation units at its Mont Belvieu, Texas, NGL hub to produce polymer-grade propylene and is building another slated to come online in 2023 with LyondellBasell as its anchor customer.

Enterprise in 2016 also started up the sole US propylene export terminal with 1.58 million mt/year of capacity, and in December 2019 started up a new isobutane dehydrogenation unit.

More recently, the company set its sights on ethylene as 11.68 million mt/year of new US ethylene capacity came online since 2017 with another 3.4 million mt/year slated to start up in the coming months.

Enterprise in January 2020 shipped out the first cargo from its 1 million mt/year ethylene export terminal along the Houston Ship Channel, the world's largest, that is connected to more than 272,000 mt of ethylene storage that in turn is connected to 80% of US Gulf Coast ethylene pipelines.

And in July 2021, the company acquired NOVA Chemicals' ethylene trading hub and storage business in Mont Belvieu – the largest, most liquid ethylene market in the US.

More ethylene growth seen

Teague said the company's experience with its propylene trading hub led to ethylene trading hub acquisition.

"If we can toll those, why not toll ethane to ethylene?" he asked.

"Toll" means applying Enterprise's midstream strategy to ethylene as well as propylene – charge fees to move and store it, but not necessarily produce it.

The company jumped into PDH units when the waves of new crackers that emerged from the US natural gas liquids production boom from 2010 on were largely fed by ethane rather than a mix of ethane and propane.

Ethane yields the most ethylene, which producers wanted to feed downstream units that make polyethylene, a resin used to make the world's most-used plastics. But the ethane push meant less propylene would be produced, and Enterprise, as well as Dow Chemical, built PDH units to feed that demand.

However, Teague said Enterprise is not interested in building a new ethane-fed cracker, or buying an existing one, given all the new crackers that have already come online, are under construction or planned.

But there is more to come, he and Chris D'Anna, Enterprise's senior vice president of petrochemicals, said.

The company sees opportunity in expanding propylene and ethylene export capacity and receiving propylene imports. Enterprise also wants to have pipeline connectivity for both olefins from the Mississippi River to Corpus Christi, Texas.

"We say float on us," Teague said.