|ENTERPRISE PRODUCTS PARTNERS L P filed this Form 10-K on 02/28/2018|
Our results of operations and financial condition are subject to certain significant risks. Factors that can affect the demand for our products and services include domestic and international economic conditions, the market price and demand for energy, the cost to develop natural gas and crude oil reserves in the U.S., federal and state regulation, the cost and availability of capital to energy companies to invest in upstream exploration and production activities and the credit quality of our customers. For information regarding such risks, see Part I, Item 1A of this annual report. In addition, our business activities are subject to various federal, state and local laws and regulations governing a wide variety of topics, including commercial, operational, environmental, safety and other matters. For a discussion of the principal effects of such laws and regulations on our business activities, see “Regulatory Matters” within this Part I, Item 1 and 2 discussion.
For management’s discussion and analysis of our results of operations, liquidity and capital resources and capital spending program, see Part II, Item 7 of this annual report.
For detailed financial information regarding our business segments, see Note 10 of the Notes to Consolidated Financial Statements included under Part II, Item 8 of this annual report. Such financial information is incorporated by reference into this Part I, Item 1 and 2 discussion.
NGL Pipelines & Services Segment
Our NGL Pipelines & Services business segment includes natural gas processing plants and related NGL marketing activities; approximately 19,600 miles of NGL pipelines; NGL and related product storage facilities; and 14 NGL fractionators. This segment also includes our LPG and ethane export terminals and related operations.
Natural gas processing plants and related NGL marketing activities
At the core of our natural gas processing business are 27 processing plants located in Colorado, Louisiana, Mississippi, New Mexico, Texas and Wyoming. The results of operations from our natural gas processing plants are primarily dependent on the difference between the revenues we earn from extracting NGLs (in terms of cash processing fees and/or the value of any retained NGLs) and the cost of natural gas and other operating costs incurred in connection with such extraction activities.
In its raw form, natural gas produced at the wellhead (especially in association with crude oil) contains varying amounts of NGLs, such as ethane and propane. Natural gas streams containing NGLs are usually not acceptable for transportation in natural gas pipelines or for commercial use as a fuel; therefore, the raw (or unprocessed) natural gas streams must be transported to a natural gas processing plant to remove the NGLs and impurities. Once the natural gas is processed and NGLs and impurities are removed, the natural gas meets pipeline and commercial quality specifications. On an energy-equivalent basis, most NGLs generally have greater economic value as feedstock for petrochemical and motor gasoline production than as components of a natural gas stream.
Once mixed NGLs are extracted by a natural gas processing plant, they are typically transported to a centralized fractionation facility for separation into purity NGL products (ethane, propane, normal butane, isobutane and natural gasoline). Purity NGL products are used as feedstocks by the petrochemical industry, as feedstocks by refineries in the production of motor gasoline and as fuel by industrial and residential consumers, as follows: