Enterprise Says Main Area at Mont Belvieu Undamaged by Fire
Enterprise Products Partners LP’s Mont Belvieu plant near Houston was on fire after an explosion that a company spokesman said is believed to have occurred at a natural gas liquids pipeline.
“The main area of the complex, where the fractionators and splitters are, has not been damaged,” Rick Rainey, the spokesman, said in a telephone interview from Mont Belvieu. One person is unaccounted for, he said.
The complex 35 miles (56 kilometers) east of Houston is a pricing point for gas liquids including ethane, butane and propane. The facility fractionates, or separates, these components from mixtures of gas liquids gathered at drilling sites across North America, according to Enterprise’s website. Mont Belvieu has a capacity of 305,000 barrels a day.
“The pipeline has been blocked in at the storage facility, and personnel are on site to monitor and bring this under control,” he said. Firefighters were letting the fire burn itself out rather than trying to extinguish it.
Enterprise fell $1.15, or 2.6 percent, to $42.65 at 4:15 p.m. in composite trading on the New York Stock Exchange. The decline was the largest since Dec. 15. The shares fell as low as $42.42 after the fire.
The fire started in a pipe rack area after a pump failure, Chambers County Judge Jimmy Sylvia said in a telephone interview.
TJ Schultz, an analyst in Austin, Texas, with RBC Capital Markets, said it’s too soon to predict the explosion’s impact on Enterprise’s operations.
“It is basically the hub for natural gas liquids fractionation” at Enterprise, Schultz said.
LyondellBasell Industries NV has cut production at its La Porte and Channelview chemical plants in Texas after a disruption in supplies, David Harpole, a company spokesman, said in a telephone interview.
“We receive ethane and propane from Enterprise for La Porte and ethane for Channelview,” Harpole said. “We have reduced rates at both as we access options for alternative supplies.”
The plant supplies crude oil refineries with butane and isobutene, said Andy Lipow, president of Lipow Oil Associates LLC in Houston. In winter, refineries use butane to blend into gasoline, he said.
Enterprise announced in October that it was building a fifth fractionation “train” at the plant that could handle 75,000 barrels per day. The plant’s total capacity was expected to reach 380,000 barrels a day when the new train opened in early 2012. Enterprise was building a 127-mile pipeline from South Texas to the Mont Belvieu plant, with a capacity of 60,000 barrels per day.
Enterprise announced in November the addition of approximately 2 million barrels of new underground storage capacity for motor gasoline and distillates at Mont Belvieu.
In October, the company signed a contract to process natural gas and crude oil produced by Dallas-based Pioneer Natural Resources, Reliance Eagleford Upstream Holding LP and Newpel LLC.
The three companies are producing natural gas, crude oil and natural gas liquids from 300,000 acres in the Eagle Ford Shale in South Texas. Some processing was to be conducted at Mont Belvieu until Enterprise opened a fractionation plant in South Texas.
Chesapeake Energy also has an agreement to ship gas to the Mont Belvieu plant, the Oil & Gas Journal reported in December. Chesapeake is producing gas from 625,000 acres in the Eagle Ford Shale in South Texas.
Enterprise also owns a gasoline additive production facility in Mont Belvieu that produces isooctane, a motor gasoline octane enhancement additive used in reformulated motor gasoline blends to increase octane, and isobutylene.
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