Houston pipeline operator Enterprise Products Partners is looking at ways to trim its multibillion dollar capital expenditure budget cuts as the ongoing oil price war takes its toll on the company’s customers.
In a Wednesday afternoon statement, Enterprise reported that the company is reviewing its 2020 capital expenditure budget due to the potential impacts of record low crude oil prices and expected lower demand from its customers.
“While substantially all of our major growth capital projects are supported by long-term, bilateral agreements, we are in discussions with our customers and evaluating opportunities to reduce or defer capital expenditures, as well as continuing to explore joint venture opportunities with strategic partners,” Enterprise Co-CEO Jim Teague said in a statement.
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Specializing in moving crude oil from shale plays to export terminals it owns along the Gulf Coast, Enterprise also owns pipelines, processing plants, storage facilities and export terminals for natural gas liquids such as ethane, propane and butane. The company set a $3 billion to $4 billion capital expenditure budget for expansion projects in 2020, as well as a $400 million budget for operations and maintenance.
A decision will be announced when Enterprise reports the company’s first quarter results on April 29.
Enterprise’s announcement comes as many exploration and production companies are cutting their drilling budgets in response to rapidly falling oil prices. A showdown between Russia and Saudi Arabia has created a global supply glut while the coronavirus outbreak has lowered global demand. West Texas Intermediate crude oil closed trading at $20.37 per barrel on Wednesday afternoon, a price not seen since Feb. 2002.
