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Enterprise Products planning another $435M project in Mont Belvieu

October 20, 2021

Enterprise Products Partners LP (NYSE: EPD) is considering a $425 million addition to its massive petrochemical and manufacturing complex in Mont Belvieu, northeast of Houston.

The Houston-based midstream giant wants to add a propane-propylene splitter unit to the Chambers County complex, according to documents published by the Texas comptroller’s office.

The splitter unit would purify up to 45,000 barrels per day of refinery-grade propylene into polymer-grade propylene. The higher-purity grade is necessary for production of polypropylene, one of the most-used plastics. 

Enterprise’s Mont Belvieu manufacturing complex is already home to six propane/propylene splitter units, according to its website. It already owns the land where the new unit would be built, according to the documents filed with the comptroller.

Construction for the splitter unit is slated to begin in the second quarter of 2022, with commercial operations starting up by June 30, 2024.

Enterprise applied for state property tax incentives under Chapter 313, which allows school districts — in this case, Barbers Hill Independent School District — to limit the taxable value of certain kinds of industrial projects within their borders.

The company is seeking a limited valuation of $80 million for the proposed splitter unit and believes it could save $25.5 million in taxes over the life of the agreement.

An Enterprise spokesperson acknowledged the application for Chapter 313 tax abatement but did not confirm or clarify the company’s plans for another propane-propylene splitter before press time.

A much bigger propylene production project, Enterprise’s second propane dehydrogenation unit, is already under construction in Mont Belvieu.

The $1.23 billion unit known as PDH 2 is expected to start up and produce polymer-grade propylene in the second quarter of 2023, Enterprise said in an August presentation to investors. Its nameplate capacity of PGP production will be 1.65 billion pounds per year.

Once PDH 2 begins operating, Enterprise will have the capacity to produce 11 billion pounds of propylene per year, according to its most recent annual report. As far back as 2019, company executives have hinted they are considering a PDH 3 as well.

The fourth-largest public company in Houston, Enterprise produced $9.45 billion in revenue during the second quarter, up slightly from $9.155 billion during the first three months of 2021.

The company’s third quarter earnings call with investors is scheduled for 9 a.m. on Nov. 2.

By Emily Burleson, Houston Business Journal