Enterprise Products Partners L.P. (NYSE:EPD) Q2 2019 Earnings Conference Call Transcript

Jul 31, 2019 • 10:00 am ET

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Enterprise Products Partners L.P. (NYSE:EPD) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Certainly. [Operator Instructions] Your first question comes from the line of Shneur Gershuni from UBS. Your line is open.

Analyst
Shneur Z. Gershuni

Hi, good morning everyone. Maybe I -- maybe we can start off with a big picture question here. There has been a lot of volatility in NGL prices over the past couple of months. I was wondering if there are multiple opportunities for enterprise to benefit from the situation via storage and frac later. In that context, can we also talk about due to propane export expansions that you're bringing online, does that close the international spreads or there are going to be more opportunities there? And if we can even talk about ethane as well also, given how low ethane is, are there opportunities to -- to take advantage of that? Or are there things that you're new tooling [Phonetic] and thinking about that weren't discussed at the Analyst Day.

Executive
A. J. Teague

Justin, you want to take that.

Executive
Justin Kleiderer

Yes, I mean, let's start with the export arm. I mean, I think with our expansions that we've announced the one coming on this year and the expansions announced between us and the rest of the folks in the market over the next 12 months, I mean, I do expect that that arb will start normalizing again. I think if it doesn't, that just supports further expansions that Jim's alluded to in the form of projects along the channel. I do think that NGL price dynamics today are supporting a lot of the various optimization opportunities that we have within our system, when it comes to storage and -- and regional arbs. So I think on a holistic basis that this NGL price environment benefits us and our assets in many different ways.

Executive
Brent B. Secrest

I'll just -- this is Brent. I'll just add that. question about storage, I think regardless of the hydrocarbon storage by the water matters. You're about to see things in different markets where storage does matter. So I think we'll have opportunities from crude oil and petrochemicals and NGLs to capitalize on that.

Executive
W. Randall Fowler

Yeah. And, Shneur, this is Randy. One thing I would also add, just if you go back and look over time, it seemed like anytime we've seen processing margins get abnormally weak, if you would, there is a natural hedge out there with contango opportunities and we're sort of seeing that again this time too.

Analyst
Shneur Z. Gershuni

All right. That makes great sense. Thank you, guys. And just one follow-up question. With the projects that you just recently announced, how much will you be expanding capacity from Midland-to-ECHO and are there any thoughts in bringing in a partner into the VLCC loader facility or do you want to own that 100%?

Executive
A. J. Teague

Right. It depends on how many contracts we get as to whether I want to own it 100%. But as we, I guess we had always entertained joint venture partners. We got to get this thing permitted first and that's off a good year plus.

Executive
Brent B. Secrest

Yeah, I'd say we'd probably