By Stephanie Kelly
NEW YORK (Reuters) -U.S. energy infrastructure group Enterprise Products Partners (NYSE:EPD) LP reported lower earnings for the second quarter due to a major year-on-year drop in the price of natural gas liquids, which affected margins, the company said on Tuesday.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2023 were $2.17 billion, versus $2.36 billion a year before.
Lower revenues on the company's EFS Midstream System, as well as lower volumes on its propylene and octane enhancement business, also affected earnings, it said.
That was partially offset by higher revenues from increased volumes on its natural gas liquids, natural gas and crude oil businesses, it said.
The company expects to see much tighter crude oil balances for the second half of 2023 and 2024, company executives said during a conference call on Tuesday to discuss the results. Enterprise sees natural gas liquids pricing and ethane pricing as constructive in the second half of 2023.
Enterprise also expects to see more interest in getting energy products to Houston, Texas, as pipelines to Corpus Christi, Texas, are full, executives said on the call.
During the quarter, the company saw operational records for natural gas pipeline volumes and natural gas liquids fractionation volumes.
It brought online new projects including the 400 million cubic feet per day expansion of its Haynesville Extension of the Acadian natural gas pipeline system, and its Poseidon cryogenic natural gas processing plant in the Midland Basin.
It also launched its twelfth natural gas liquids fractionator and its second propane dehydrogenation plant in Chambers County, Texas.
The company is on schedule to complete its Mentone II natural gas processing plant in the Delaware Basin in the fourth quarter, and the first phase of its Texas Western products pipeline system at the end of 2023.
Enterprise expects to receive licenses in the next few months to construct its Sea Port Oil Terminal project, the company said during the conference call.