Enterprise Products Profit Rises on Winter Fuel Demand

Enterprise Products Partners LP (EPD), the biggest U.S. pipeline operator by market value, said first-quarter profit rose 6 percent as a frigid winter and surging energy supplies boosted demand for transporting fuel.

Net income climbed to $798.8 million, or 85 cents a share, in the first quarter, from $753.5 million, or 83 cents, a year earlier, the Houston-based company said in a statement today. Revenue climbed 13 percent to $12.9 billion, beating analysts’ estimates.

Record cold in the eastern U.S. helped drive demand for natural gas, propane and other heating supplies in the quarter. Midstream energy companies -- those that store, process and transport fuel -- also continued to see volumes rise from a renaissance in oil and gas drilling.

“Results should be strong across the midstream industry as weather was cold, pipes ran as full as they have in years, storage was withdrawn to all-time lows in many cases,” and propane prices surged, Bradley Olsen, a Tudor, Pickering, Holt & Co. analyst in Houston, said in an April 15 note to clients.

Kinder Morgan Energy Partners LP (KMP), the second-biggest pipeline company, reported rising revenue and cash flows on April 16, on the strength of higher gas volumes. Chief Executive Officer Richard Kinder told analysts on a conference call that supplies out of the Marcellus and Utica shale regions could reach “mind-boggling” levels, boosting pipelines that take a fee to transport the fuels.

Enterprise said earlier this month that it would seek to take further advantage of the boom, announcing plans for an export terminal in Texas to ship 240,000 barrels a day of ethane, a gas byproduct used to make plastics.

The company owns about 50,000 miles (80,450 kilometers) of on- and offshore pipelines, 14 billion cubic feet of gas storage capacity, processing plants and a marine transport business.

The results were announced before the start of regular trading on U.S. markets. Enterprise Products closed unchanged in New York yesterday at $73.13.

To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editors responsible for this story: Susan Warren at susanwarren@bloomberg.net Stephen Cunningham

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