Midstream - Pipelines | Pipeline Cancel/Deferred
Enterprise Cancels Permian ECHO Pipeline 'M2E4' Expansion
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Enterprise Products Partners L.P. has decided to cancel the 450,000 barrels per day Midland-to-ECHO 4 crude oil pipeline project (M2E4).
The cancellation of M2E4 will reduce aggregate growth capital expenditures for 2020, 2021 and 2022 by approximately $800 million.
As a result of the cancellation, Enterprise expects to record an impairment charge of approximately $45 million to its earnings for the third quarter of 2020.
A. J. “Jim” Teague, co-CEO of Enterprise’s general partner, said: “We are very proud of our commercial team for responding and working with our customers to amend these long-term agreements. This is another example of Enterprise working with customers for a ‘win/win’ solution that allows our customers and Enterprise to better allocate capital during the challenging times of the current economic cycle while retaining long-term, fee-based volumes and revenues for our assets. The capital savings from the cancellation of M2E4 will accelerate Enterprise toward being discretionary free cash flow positive, which would give us the flexibility to reduce debt and return additional capital to our partners, including through buybacks.”
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CANCELLED - Midstream Project
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