Enterprise Products Partners L.P.

SEC Filings

10-Q
TEPPCO PARTNERS LP filed this Form 10-Q on 11/14/1997
Entire Document
 
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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS

         RESULTS OF OPERATIONS - (CONTINUED)



         Refined products transportation revenues increased $1.7 million for the
quarter ended September 30, 1997, compared with the prior year quarter, as a
result of higher deliveries of natural gasoline and methyl tertiary butyl ether
("MTBE"), higher tariff rates on the Ark-La-Tex system and higher tariff rates
on barrels originating from the pipeline connection with Colonial Pipeline
Company's ("Colonial") pipeline at Beaumont, Texas. The increase in natural
gasoline deliveries was attributable to higher feedstock and blending demand in
the Midwest due to increased gasoline production in that region. The increase in
MTBE deliveries was due primarily to higher short-haul deliveries at the
Partnership's marine terminal near Beaumont, Texas. Additionally, approximately
$0.2 million of revenue was recognized on previously deferred deficit
transportation payments for MTBE deliveries in the Midwest. Deliveries of motor
fuel decreased, as compared to the third quarter of 1996, as a result of
increased refinery utilization rates in the Midwest, refinery production
problems along the upper Texas Gulf Coast and more favorable economics for Gulf
Coast produced gasoline to be transported to other regions of the United States
not supplied by the Partnership's pipeline system. The increase in tariff rates
on the Ark-La-Tex system was due to new tariff structures for volumes
transported on the expanded portion between Shreveport, Louisiana, and El
Dorado, Arkansas, which was placed in service on March 31, 1997.

         LPGs transportation revenues increased slightly during the 1997 third
quarter, compared with the prior year third quarter, as a result of higher
butane deliveries due primarily to a Northeast area refinery, which was shut
down throughout 1996, resuming operations during the second quarter of 1997, and
increased demand for propane in the Midwest. These increases were partially
offset by lower propane deliveries in the Northeast due to higher amounts of
Canadian imports in that market area. The decrease in the LPGs transportation
average tariff rate per barrel resulted from the lower percentage of long-haul
propane deliveries.

         For the nine months ended September 30, 1997, refined products
transportation revenues increased $6.1 million, compared with the corresponding
period in 1996, due to a 4% increase in volumes delivered and a 3% increase in
the refined products average tariff per barrel. The increase in refined products
transportation volumes was attributable to increased feedstock and blending
demand for natural gasoline in the Midwest, the full period impact in 1997 of
the pipeline connection at the Little Rock Air Force Base, which was completed
in June 1996, and increased MTBE deliveries at the marine terminal near
Beaumont, Texas. Additionally, higher revenues were generated from the
Ark-La-Tex system expansion and the pipeline connection with Colonial. These
increases were partially offset by lower motor fuel and distillate deliveries
due to higher refinery utilization rates in the Midwest during 1997.

         LPGs transportation revenues decreased $1.8 million during the nine
months ended September 30, 1997, compared with the same period in 1996, due to a
4% decrease in the LPGs average tariff per barrel, partially offset by a 1%
increase in LPGs volumes delivered. Long-haul propane deliveries were lower than
the prior year because of warmer winter weather in the Northeast during the
first quarter of 1997. Increased Canadian imports of propane in the Northeast
and butane in the Midwest market areas also resulted in decreased volumes
delivered in 1997. These decreases were partially offset by stronger demand for
butane and isobutane as a refinery feedstock due to the resumption during the
second quarter of 1997 of operations at a Northeast refinery that was shut down
throughout 1996. Increased propane demand along the upper Texas Gulf Coast
resulted in a 33% increase in short-haul propane deliveries. The 4% decrease in
the LPGs average tariff per barrel resulted from the higher percentage of
short-haul propane deliveries during 1997.

         Revenues generated from Mont Belvieu operations increased $1.0 million
during the quarter and nine months ended September 30, 1997, compared with the
corresponding periods in 1996, due primarily to higher terminaling fees on
butane received into the system, increased propane dehydration fees and higher
petrochemical demand for LPGs along the upper Texas Gulf Coast. The decrease in
the Mont Belvieu operations average tariff per barrel for the nine months ended
September 30, 1997, compared with the prior year, was due to a higher percentage
of contract deliveries in 1997, which generally carry lower tariffs.

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