Enterprise Announces Construction Of New Propylene Splitter And Expansion Of Propylene Gathering Pipelines
Houston - Enterprise Products Partners L.P. announced that its operating subsidiary is making additional investments to expand its integrated network of petrochemical assets in Mont Belvieu and southeast Texas. These investments include the construction of a new propylene fractionator at its Mont Belvieu complex that will increase Enterprise's propylene/propane fractionation capacity by one billion pounds per year, or approximately 15 thousand barrels per day ("MBPD"), and the expansion of two refinery grade propylene gathering pipelines that will add 50 MBPD of gathering capacity into Mont Belvieu. The total investment in the new propylene fractionator and pipeline expansions, which are expected to be operational by late 2007, is estimated at $205 million, with approximately $130 million of the total targeted for the new fractionator and associated storage and handling improvements. These investments are a part of our previously announced growth capital budget for 2006.
Enterprise currently operates three propylene fractionators at Mont Belvieu with a net capacity to produce 58 MBPD of polymer grade propylene. Polymer grade propylene is 99.5% pure propylene and is used in the production of plastic consumer products, pharmaceuticals, detergents and solvents. Demand for propylene has grown an average 5.7% per year since 1999 according to the industry trade association, Chemical Market Associates, Inc. ("CMAI"), and is projected to continue to grow at that rate through 2008 according to CMAI.
Enterprise recently completed the acquisition of a 66-mile, 8-inch pipeline that will transport propylene from the large crude oil refining facilities located along the upper Texas Gulf Coast in the Port Arthur/Groves area to Mont Belvieu. Enterprise has executed a 20-year transportation contract with Total Petrochemicals U.S.A., Inc. and will initially connect with their refinery and another refinery in this region. Enterprise also completed the extension of its refinery grade propylene gathering pipeline to interconnect with two crude oil refiners in the Texas City area.
"Enterprise's propylene fractionation and gathering activities have provided our partnership with a consistent stream of fee-based cash flow," said Robert G. Phillips, Enterprise's President and Chief Executive Officer. "The combination of our new propylene fractionator and the expansion of our propylene gathering capacity confirms our commitment to major refiners in southeast Texas to utilize our systems to meet their growing requirements for propylene in this vitally important region. The additional capacity will provide commercial and operating flexibility to both Enterprise and our customers at a time of significant growth in demand for propylene."
SOURCE: Enterprise Products Partners L.P.