Enterprise Products Partners shrugs off downturn with $1 billion profit
July 29, 2020
Houston pipeline operator Enterprise Products Partners made $1 billion in the second quarter despite an oil and natural gas industry downturn caused by the coronavirus pandemic.
It's the eighth-straight quarter in which Enterprise has made $1 billion or more, but it is still 15 percent less than the $1.2 billion profit in the second quarter of 2019. Revenue declined 31 percent to $5.8 billion from $8.3 billion in the same period last year. The company said its profitable propylene and octane businesses were hampered by decreased demand during the pandemic as well as difficulty getting raw materials.
The second quarter was one of the most challenging in the history of the U.S. energy industry as shutdowns related to the coronavirus pandemic slashed demand for crude and related products, sending oil prices to historic lows.
During the worst of the glut in April, Enterprise rented its unused storage capacity to producers seeking to store their oil until prices improved.
"Our storage and marketing activities provided a natural hedge that enabled us to largely offset the weakness in our natural gas gathering, processing and petrochemical businesses during the second quarter of 2020," co-CEO Jim Teaque said.
Looking ahead, the company expects to put into service its 11th natural gas liquids processing plant in Mont Belvieu and a new segment of the Wink to Webster Pipeline.
Founded in 1968, the company has not posted a loss since the third quarter of 2003 when a $22.5 million write down on the value of equipment resulted in a $3.3 million loss.