Enterprise Products Partners L.P.

SEC Filings

ENTERPRISE PRODUCTS PARTNERS L P filed this Form 10-K on 02/28/2018
Entire Document

We sell our octane enhancement products at market-based prices.  We attempt to mitigate the price risk associated with these products by entering into commodity derivative instruments.  To the extent that we produce MTBE, it is sold exclusively into the export market.  We measure the utilization of our octane enhancement facility in terms of combined isooctane, isobutylene and MTBE production volumes, which averaged 23 MBPD, 19 MBPD and 15 MBPD for the years ended December 31, 2017, 2016 and 2015, respectively.  Octane enhancement production volumes for 2015 were adversely impacted by extended maintenance outages.

We also own and operate a facility located on the Houston Ship Channel that produces up to 4 MBPD of HPIB and includes an associated storage facility with 0.6 MMBbls of storage capacity.  The primary feedstock for this plant, an isobutane/isobutylene mix, is produced by our Mont Belvieu octane enhancement facility.  HPIB is used in the formulation of polyisobutylene, which is used in the manufacture of lubricants and rubber.  In general, we sell HPIB at market-based prices with a cost-based floor.  On a weighted-average basis, utilization rates for this facility were 75.9%, 58.4% and 54.8% for the years ended December 31, 2017, 2016 and 2015, respectively.

The results of operations from our octane enhancement and HPIB facilities are generally dependent on the level of production volumes and the difference, or spread, between the sales prices of the products (e.g., MTBE and isobutylene) and the associated feedstock purchase costs (e.g., methanol and high-purity isobutane) and other operating expenses.

Isobutane Dehydrogenation Unit
In January 2017, we announced plans to construct a new isobutane dehydrogenation (“iBDH”) unit at our Mont Belvieu complex that is expected to have the capability to produce 425,000 tons per year of isobutylene.  The project, which is underwritten by long-term contracts with investment-grade customers, is expected to be completed in the fourth quarter of 2019.  Isobutylene produced by the new plant will also provide additional feedstocks for our downstream octane enhancement and petrochemical facilities.

Historically, steam crackers and refineries have been the major source of propane and butane olefins for downstream use.  However, with the increased use of light-end feedstocks, specifically ethane, the need for on-purpose olefins production has increased.  Like our PDH facility, the iBDH plant will help meet market demand where traditional supplies have been reduced.  The new iBDH plant will increase our production of both high purity and low purity isobutylene, which are used as feedstock to manufacture lubricants, rubber products and alkylate for gasoline blendstock, as well as methyl tertiary butyl ether (“MTBE”) for export.

Refined products pipelines
We own and operate the TE Products Pipeline, which is a 3,317-mile pipeline system comprised of 2,992 miles of regulated interstate pipelines and 325 miles of unregulated intrastate Texas pipelines.  The system primarily transports refined products from the upper Texas Gulf Coast to Seymour, Indiana. From Seymour, segments of the TE Products Pipeline extend to Chicago, Illinois; Lima, Ohio; Selkirk, New York; and a location near Philadelphia, Pennsylvania.  East of Seymour, Indiana, the TE Products Pipeline is primarily dedicated to NGL transportation service.  The refined products transported by the TE Products Pipeline are produced by refineries and include motor gasoline and distillates.  The results of operations for this pipeline system are dependent upon the volume of products transported and the level of fees charged to shippers.  The tariffs charged for such services are either contractual or regulated by governmental agencies, including the FERC.

The maximum number of barrels per day that our TE Products Pipeline can transport depends on the operating balance achieved at a given point in time between various segments of the system (e.g., demand levels at each delivery point and the mix of products being transported).  As a result, we measure the utilization rate of this pipeline in terms of throughput.  Aggregate throughput volumes by product type for the TE Products Pipeline were as follows for the periods presented:

For the Year Ended December 31,
Refined products transportation (MBPD)
Petrochemical transportation (MBPD)
NGL transportation (MBPD)