"The expansion of our Norco plant will allow us to fractionate an additional 20,000 - 25,000 barrels per day of NGLs," said O.S. "Dub" Andras, president and chief executive officer of Enterprise. "We have also enhanced our product distribution capability downstream of the facility and are currently increasing its storage capacity. By expanding the Norco plant, we will increase our earnings from fee-based businesses and capitalize on an organic growth opportunity. Additionally, we have the ability to increase the capacity of the plant by an additional 20% at a nominal cost."
Fractionation is the process of separating mixed NGLs into the component products ethane, propane, normal butane, isobutane and natural gasoline. Recoveries of mixed NGLs by natural gas processing plants, which typically are located near the production areas, represent the most important source of volume for Enterprise's NGL fractionators.
Mixed NGLs delivered to the Norco fractionator are sourced from natural gas processing plants located at Yscloskey, Toca, and Venice, Louisiana, in which Enterprise has ownership interests of approximately 32%, 60%, and 13%, respectively. These plants recover NGLs from natural gas produced in numerous shelf and deep water production fields in the Gulf of Mexico, and are well positioned to capture new gas and NGL production from future deep water discoveries.
Enterprise recently shut down its fractionator at Toca, Louisiana, which had been fractionating a portion of the NGL production from the Yscloskey plant and executed long-term agreements with the Yscloskey plant owners to fractionate these mixed NGLs at Norco. Also, under the terms of a long-term agreement with Venice Energy Services Company ("VESCO") that was executed last year, Enterprise will fractionate certain mixed NGLs produced at the Venice gas processing plant at Norco. Additional volumes of NGLs from a refinery recently acquired by Valero have also been placed under contract to be fractionated at Norco. The expansion provides Norco with the capacity to fractionate these NGLs, as well as other mixed NGLs from opportunities currently under development.
Prior to the expansion, the Norco fractionator had an effective capacity to fractionate about 53,000 barrels of mixed NGLs per day due to the composition of mixed NGLs being delivered to the facility (high percentages of butanes and natural gasoline). After the expansion, Norco now has the capacity to fractionate 75,000 barrels per day of mixed NGL feed at this composition, and its capacity can be further expanded to 90,000 barrels per day at a nominal cost.
"The expansion project was completed on schedule and on budget, and mixed NGLs were introduced to the plant on October 27, 2003. The start-up went smoothly and plant throughput has averaged approximately 70,000 barrels per day to date during the month of November," said Andrus.
Enterprise Products Partners L.P. is the second largest publicly traded, midstream energy partnership with an enterprise value of approximately $7.0 billion. Enterprise is a leading North American provider of midstream energy services to producers and consumers of natural gas and NGLs. The Company's services include natural gas transportation, processing and storage and NGL fractionation (or separation), transportation, storage and import/export terminaling.
This press release contains various forward-looking statements and information that is based on Enterprise's beliefs and those of its general partner, as well as assumptions made by and information currently available to Enterprise. When used in this press release, words such as "anticipate," "project," "expect," "plan," "goal," "forecast," "intend," "could," "believe," "may," and similar expressions and statements regarding the plans and objectives of Enterprise for future operations, are intended to identify forward-looking statements.
Although Enterprise and its general partner believe that such expectations reflected in such forward-looking statements are reasonable, neither Enterprise nor its general partner can give assurances that such expectations will prove to be correct. Such statements are subject to a variety of risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, Enterprise's actual results may vary materially from those Enterprise anticipated, estimated, projected or expected. Among the key risk factors that may have a direct bearing on Enterprise's results of operations and financial condition are:
-- fluctuations in oil, natural gas and NGL prices and production due to weather and other natural and economic forces;
-- a reduction in demand for the Company's products by the petrochemical, refining or heating industries;
-- a decline in the volumes of NGLs delivered by the Company's facilities;
-- the failure of the Company's credit risk management efforts to adequately protect it against customer non-payment;
-- the failure to successfully integrate new acquisitions; and
-- terrorist attacks aimed at the Company's facilities.
The Company has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.