Enterprise buoyed by gas price hike
Winter storm’s impact added to pipeline firm’s profits in first quarter
The Houston pipeline operator Enterprise Products Partners said Monday that it earned more than $1 billion in the first quarter, lifted by natural gas sales when prices skyrocketed during the winter storm in February.
Enterprise attributed about $250 million of the $1.34 billion in first quarter profits to the sale of natural gas during the brutally cold weather that led to shortages and widespread power outages, a spokesperson said. Profits were down slightly from $1.35 billion a year earlier, but revenues jumped 22 percent to $9.2 billion in the first quarter from $7.5 billion from the same period in 2020.
The storm had both positive and negative effects on Enterprise’s earnings and operations. The company said weatherizing its pipelines paid off as it sold natural gas to utilities, industrial customers and electricity generators when demand and prices were at their highest. The company said it bought additional natural gas during the storm, which it also sold at high prices.
Enterprise, however, experienced outages at most of its Tex
as processing plants and fractionator facilities, which separate its processed natural gas into components such as ethane and propane. Most facilities were running again within a day, although some were out for a few days, a spokesperson said.
The company did not provide an estimate of the costs of the outages.
First quarter profits were lowered by an approximately $66 million charge related to the company’s Val Verde Gas Gathering Co. in New Mexico, which processes coal bed methane into a gas that can be transported through the pipelines. Val Verde was put up for sale at the end of the first quarter, with a sale pending but no closing date set, according to a spokesperson for the company.
Coming out of the pandemic, Enterprise said it has a positive outlook as global demand continues to improve for crude oil, natural gas liquids, primary petrochemicals and refined products. Enterprise is a major exporter of these products.
“Diesel demand actually exceeds pre-COVID-19 norms in much of the world and gasoline demand is picking up, already exceeding 2019 levels in some countries,” A. J. “Jim” Teague, Director and Co-CEO at Enterprise, said during a call with analysts.