Enterprise Products Partners L.P.

SEC Filings

ENTERPRISE PRODUCTS PARTNERS L P filed this Form S-1/A on 07/21/1998
Entire Document
  The following table describes the volumes of isobutane produced and the
utilization at the Company's Mont Belvieu facility during the past five years:

                                                        YEAR ENDED DECEMBER 31,
                                                        1993  1994  1995  1996  1997
                                                        ----  ----  ----  ----  ----
<S>                                                     <C>   <C>   <C>   <C>   <C>
Average daily toll processing volume (a)...............  45    45    57    59    62
Average daily production volume (a)....................  66    66    67    71    67
Tolling volume as a percentage of total production.....  66%   68%   86%   84%   92%
Average capacity utilization...........................  57%   57%   58%   61%   57%
Average daily merchant volume (a)(b)...................  39    42    44    52    53

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(a)  Thousands of barrels per day.
(b)  Average daily merchant volume includes merchant processing volume and
     sales of isobutane purchased in the spot market.
 Mixed Butane Fractionation
  The Company also uses its DIB units to fractionate mixed butane produced
from the Company's NGL fractionation and isomerization facilities and from
imports and other outside sources into isobutane and normal butane. The
operating flexibility provided by its multiple DIBs enables the Company to
take advantage of fluctuations in demand and prices for the different types of
butane. The Company also has DIB capacity available for toll processing of
mixed butane streams for third parties.
  Imports are the Company's most significant outside source of mixed butane.
The Company leases and operates an NGL import/export facility on the Houston
ship channel, one of only two commercial facilities on the Gulf Coast capable
of receiving and unloading world-scale NGL tankers. This facility, which is
connected to the Mont Belvieu facility via a pipeline which is part of the
Company's Houston ship channel system, enables the Company to import large
quantities of mixed butane for processing in its DIBs. During 1997, imports,
primarily from Algeria, Mexico and Venezuela, accounted for 81% of the
Company's supply of mixed butane from outside sources. The Company believes
that, because of new projects in Africa and South America and the lack of
storage capacity in the Middle East, NGL import volumes will remain consistent
over the near term.
  MTBE is produced by reacting methanol with isobutylene, which is derived
from isobutane. MTBE was originally used as an octane enhancer in motor
gasoline, partly in response to the lead phase-down program begun in the mid-
1970s. Following implementation of the Clean Air Act Amendments of 1990, MTBE
became a widely-used oxygenate to enhance the clean burning properties of
motor gasoline. Although oxygen requirements can be obtained by using various
oxygenates such as ethanol, ethyl tertiary butyl ether (ETBE) and tertiary
amyl methyl ether (TAME), MTBE has gained the broadest acceptance due to its
ready availability and history of acceptance by refiners. Additionally, motor
gasoline containing MTBE can be transported through pipelines, which is a
significant competitive advantage over alcohol blends.
  Substantially all of the MTBE produced in the United States is used in the
production of oxygenated motor gasoline that is required to be used in carbon
monoxide and ozone non-attainment areas pursuant to the Clean Air Act
Amendments of 1990 and the California oxygenated motor gasoline program.
Demand for MTBE is primarily affected by the demand for motor gasoline in
these areas. Motor gasoline usage in turn is affected by many factors,
including the price of motor gasoline (which is dependent upon crude oil
prices) and general economic conditions. Historically, the spot price for MTBE
has been at a modest premium to gasoline blend values. Future MTBE demand is
highly dependent on environmental regulation, federal legislation and the
actions of individual states. See "Risk Factors--Risks Inherent in the
Company's Business--The Profitability of the Company's Operations Will Depend
Upon the Demand and Prices for the Company's Products--MTBE" for a discussion
of legislation proposed in California to ban MTBE as a gasoline additive,
legislation proposed