John Randy Burkhalter - Enterprise Products Partners LP A. James Teague - Enterprise Products Partners LP Bryan F. Bulawa - Enterprise Products Partners LP Anthony C. Chovanec - Enterprise Products Partners LP Bradley Motal - Enterprise Products Partners LP Roger B. Herrscher - Enterprise Products Partners LP Brent B.

Secrest - Enterprise Products Partners LP Laurie H. Argo - Enterprise Products Partners LP.

Jean Ann Salisbury - Sanford C. Bernstein & Co. LLC Brandon Blossman - Tudor, Pickering, Holt & Co. Securities, Inc. TJ Schultz - RBC Capital Markets LLC Kristina Kazarian - Deutsche Bank Securities, Inc. Darren C. Horowitz - Raymond James & Associates, Inc. Matthew Phillips - Guggenheim Securities Theodore Durbin - Goldman Sachs & Co. Shneur Z.

Gershuni - UBS Securities LLC Brian Joshua Zarahn - Mizuho Securities USA, Inc. Jeremy B. Tonet - JPMorgan Securities LLC Faisel H. Khan - Citigroup Global Markets, Inc. Barrett Blaschke - MUFG Securities America, Inc. Christopher Paul Sighinolfi - Jefferies LLC John Edwards - Credit Suisse.

Good morning. My name is Nicole and I will be your conferencing operator today. At this time, I would like to welcome everyone to the Enterprise Products Partners Q1 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

It is now my pleasure to hand the conference over to Mr. Randy Burkhalter. Please go ahead, sir..

Thank you, Nicole. Good morning, everyone, and welcome to our first quarter call. Our speakers today will be Jim Teague, Chief Executive Officer of Enterprise and Director of Enterprise General Partner; and Bryan Bulawa, Chief Financial Officer. Other members of our senior management team are in attendance today for the call.

During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934 based on the beliefs of the company as well as assumptions made by and information readily available to Enterprise's management team.

Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.

Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call. And with that, I'll turn the call over to Jim..

full assurance and market choices. And with that, I'll turn it over to Bryan..

Thank you, Jim, and good morning, everyone. I will discuss a few income statement items for the first quarter; provide an update on our growth and sustained capital spending for 2017, and wrap up with an overview of our balance sheet metrics and capital raising activities for the quarter.

But before doing so, I'd like to reiterate comments I've made in the past regarding revenue and seasonality. The changes in revenue and operating costs and expenses are largely influenced by changes in commodity prices and are not typically an accurate depiction of the partnership's performance.

In contrast to the past few quarters, the first quarter of 2017 revenue was up 46% when compared to the same quarter of 2016 while associated costs and expenses were up 53%. We believe total gross operating margin is a better performance-based metric.

And as Jim mentioned, it increased 11% to $1.5 billion for the first quarter of 2017 when compared with the first quarter of 2016. Also it's important to be reminded that the fourth and first quarters are typically our seasonally stronger financial performance quarters.

Now moving along to income items for the quarter, net income attributable to limited partners for the first quarter of 2017 was $761 million or $0.36 per unit on a fully diluted basis compared to $661 million or $0.32 per unit on a fully diluted basis for the first quarter of 2016.

It was a relatively clean quarter with no material nonrecurring items. Total capital spending in the first quarter of 2017 was $460 million, including $48 million for sustaining capital expenditures.

For the full year of 2017 we expect organic growth capital expenditures to be approximately $2.5 billion to $2.75 billion and sustaining capital expenditures to come in right around $250 million.

This is slightly elevated from the levels provided during the Analyst Day given the number of new organic projects we've announced and were mentioned earlier in Jim's comments.

In addition, we recently closed the previously announced $189 million acquisition of the Midstream assets – Midstream business and assets of Azure Midstream Partners through a bankruptcy-directed auction process. At March 31, 2017, our total debt principal outstanding was $23.6 billion. The average life of our debt portfolio was 16 years.

And our effective average cost of debt was 4.6%. Adjusted EBITDA for the 12 months ended March 31, 2017 was $5.3 billion, and our consolidated leverage ratio continues to trend lower after peaking near 4.5 times in third quarter 2016.

For the first quarter of 2017 it was 4.27 times after adjusting debt for the 50% equity treatment ascribed by the rating agencies for the hybrid debt securities and we reduce it further for cash and cash equivalents.

Further, when we adjust debt for elevated working capital levels associated with short-term continuing opportunities across commodities and contracted growth projects under construction, our adjusted leverage ratio was just under 4.2 and 4 times, respectively.

For the first quarter of 2017 we retained $238 million of distributable cash flow and raised $449 million in net equity proceeds from our distribution reinvestment program, our employee unit purchase program, and the aftermarket or ATM program.

To that end we had record unaffiliated unitholder participation in our distribution reinvestment program that was paid in February, which raised $90 million in equity proceeds.

Finally, our consolidated liquidity was approximately $4.1 billion at March 31, 2017, which included available borrowing capacity under our credit facilities and unrestricted cash. With that, I'll turn the call back over to Randy..

Thank you, Bryan. Nicole, we're ready to take questions from our participants, but before we do that, let me remind everyone that we'd like to limit the questions to one question plus one follow-up please, to give more people time to ask questions. Go ahead, Nicole..

Certainly. It is now time for the question-and-answer session. Your first question comes from the line of Jean Ann Salisbury with Bernstein..

Hi. Good morning. I just wanted to see if you could give a little more color on how to think about the competitive positioning of your oil, gas, and NGL pipelines in the Permian. You've mentioned before that your crude acreage dedication could be a primary feeder to your oil pipeline.

Would those be the same customers on your other pipelines? Or is it just a totally different set that you're pitching?.

I think it's a mix. Some of the customers will be the same, but there will be others that will be different..

Okay.

So the acreage dedications support the crude pipeline, but not necessarily the other pipeline?.

That's correct. They would be individual, per pipeline..

Okay. Thanks. And separately, I get a lot of questions about whether processing capacity could be a bottleneck in the Permian. I think you've said before that you don't expect that due to the no permitting and quick build time for the plant, but I just wanted to get your latest view on that..

I'm sorry, I missed your question.

You said what now?.

Whether processing capacity could be a bottleneck in the Permian?.

Not if we have anything to do with it..

That's correct..

All right. Thank you..

Your next question comes from the line of Brandon Blossman with Tudor, Tuckering (sic) [Pickering], Holt & Co..

Good morning, everyone..

Good morning, Brandon..

Let's see. I'll circle back on the NGL pipeline.

What, just broadly from a macro perspective, what are you guys seeing in terms of takeaway capacity over the next five years for NGLs out of the Permian? And are you thinking – how do you think about market share gains relative to your competitors over that five-year period for NGL takeaway in the Basin?.

Brandon, this is Tony. When we made our announcement on our NGL pipeline we said it was expandable, and as we see the numbers at current drilling rates, that we think there's a good chance that over the time period that you discussed that we will be expanding it. That's how we see it..

Okay. Fair enough. Related topic, the Texas interstate system – natural gas system – saw a downtick year-over-year.

What's, and probably for Tony, what's the trajectory there from your expectations going forward?.

Hi, this is Brad. I think that from a trajectory perspective we – kind of seen the bottom and I suspect that we'll start to see some upside on a go-forward basis as we maximize the use of the pipes out of the Permian going east and south and then with the pick-up of the Eagle Ford we should see some revenue growth there as well..

Okay. That's my two. I'll circle back. Thanks, guys..

Your next question comes from the line of TJ Schultz with RBC Capital Markets..

Great. Thanks. Good morning. I guess just first, if you can give any update on Centennial, just discussions with customers on needs for diversification and how much that may ultimately play into the dynamic, I guess just to find a second market for NGLs..

Well, the Centennial project is a slow play right now. These projects require a multitude of players to be involved. They have fast phases and slow phases and we're in slow phase. We've suspended work in the field.

We're pressing on with our negotiations with shippers, Northeast producers that want additional access to the Gulf Coast market for their propane. And we're calling on other people to see if they would be interested to be shippers. And when there's sufficient volume, demand, there'll be a project.

I think we're a long way from talking about abandonment but until there's a volume at acceptable levels to justify a project, it won't go forward. But the good news I think in that is that because of the acceptable range of volumes that would justify the high end of that is very realistic; it should be just a matter of timing.

But until it's there, until the demand's there, there's no project. In a nutshell, TJ, we're not going to chase it. If people want it, we'll do it, but we're not going to chase it..

Okay, that makes sense. I guess second would just be on the Eagle Ford and Haynesville, you spent some time there. So you see leases turning over; you just bought the Azure assets.

I guess, are there other assets in those particular Basins that you think make sense potentially from an M&A perspective or is Azure kind of a one-off and the message is just that more that there's open capacity right now in your system that you'll participate in with minimal CapEx?.

I think Azure was a unique situation that fit us like a glove. And I think that the Eagle Ford, we'd like to see production come back more, Tony thinks it will, we've got plenty of capacity to handle it without doing a heck of a lot in the Permian.

We found that it's more economical to build than to get caught up in the frenzy of paying high premiums for existing assets..

Okay. Great. Thanks, guys..

Your next question comes from the line of Kristina Kazarian with Deutsche Bank..

Good morning, guys..

Good morning..

Jim, you started off talking about the multi-year period of petchem demand growth that we're going into. And I know you guys announced a handful of new projects in the quarter.

But maybe could you talk high level about like what the next set of major infrastructure needs or projects EPD is kind of focused on to meet these needs? And I guess most importantly, how big could this opportunity be?.

Well, with PDH and iBDH it's pretty big already, Kristina. But from an ethylene perspective, I think what RB and his group's putting together is kind of sticking your toe in the water to see where we can go with ethylene logistics.

I think putting together a storage system that the entire Gulf Coast can use; putting together a distribution system is a first step. Now we, RB has worked tirelessly on ethylene export. But the question there is how long is this market, how long is it with ethylene for how long. And we'll keep working that and see where it goes.

But right now, we just kind of like what we're doing. Just a minute, I'm getting a note. And then Tony's reminding me that he thinks that there's a second wave of crackers that will be built in the U.S.

He doesn't think we're through building crackers, which will be supportive of us putting together kind of an ethylene hub and distribution center and will be supportive of our ethylene delivery infrastructure..

Perfect. So I guess my follow-up will be maybe just timeframe on those latter two points. So, timeframe to developing a lot of the infrastructure needed to handling the end products on the ethylene side. And maybe timeframe to Tony's second wave of crackers that maybe, might be coming..

This is Tony. So relative to the second wave, we're watching the announcements, quasi-announcements like everyone else. So let's think in the early 2020s. That's what we expect. And then relative to hub activities, RB will take it..

Yeah. We're currently developing the pipeline, transportation and the storage. If the ethylene terminal goes, if the demand is there, it will go. But a lot of the crackers focus a lot on their feedstock supply and their derivative capacity.

And what we have found is there's a little bit of a gap there on the ethylene side of the business that we're trying to fill their needs..

Perfect, guys. Hope you win all of them. Thanks, guys..

Your next question comes from the line of Darren Horowitz with Raymond James..

Good morning, guys. Jim, maybe a question for you or Tony. I'd like your thoughts on the expectations that propane balances possibly could meaningfully tighten this winter. And what you think about the impact on market dynamics and pricing, specifically if we don't have enough U.S.

supply to meet LPG exports running at 850,000 barrels or 900,000 barrels a day without drawing down inventories, how do you guys think about capitalizing on what could be a very profitable arbitrage of securing propane near-term, storing it at Belvieu, selling it forward, especially if we're heading into a scenario where Mont Belvieu propane could sell at a premium to like Northwest Europe?.

Hey, Darren. I wondered where you were..

I did too, Jim..

And you didn't start out with saying nice quarter.

Have you been hanging out with our NGL marketing guys?.

As much as I can..

Now, you're speaking of contango obviously. And we did quite a lot of contango last year, Tuck (24:37). We haven't done – frankly we haven't had the opportunity to do as much, I don't think the first quarter as we did last year. But it is in our playbook.

And the beauty of our system is when you have things like we've had the last couple of years, invariably it creates other opportunities that aren't otherwise there, contango being one of them. And we've got a system that can capitalize on that big time.

Brent, Tuck (25:07), anything?.

Well, I think you're dead-on. This is Brent talking. The market has not told propane that it needs to be stored yet, and so you're starting to see some stuff happen. You're starting to see just from the industry talk cancellations happen this month and, yeah, for the month of May. But ultimately I think you're spot-on.

The market will tell propane that it needs to be stored so that they can get geared up for this winter..

Hey, Jim. By the way, good quarter. That's all I had. Thank you very much..

Your next question comes from the line of Matthew Phillips with Guggenheim Partners..

Good morning, guys. So, continuing on the petchem theme, Tony alluded to it before, but Exxon recently announced the possibility of a new cracker down near Corpus Christi. You all have a frac in Nueces County. I mean do you – that part of Texas is fairly light in NGL infrastructure.

I mean, do you see the room for more of a build-up there? Whether it's your own assets or acquiring third-party assets?.

If they build that monster, we're certainly going to be in there pitching a system to supply it. If you look at – we say it a lot, for NGLs we're tied to every ethylene plant in the United States. We're very proud of that. And we're not going to let an ethylene plant come online that we don't have some kind of access to..

Would it make more sense to extend Aegis that way? Or would you build a bespoke frac for a plant like that?.

Well, the reality is we – from Mont Belvieu down to South Texas we have a 16-inch pipeline in ethane service that's bidirectional. So we call Aegis from Mont Belvieu to the river. The reality is we've got an ethane header from Corpus to the Mississippi River. So we're positioned to do some.

But if they build what they say they're going to build, what is it, Tony, over 100,000 barrels, I think..

Over 100,000 barrels a day..

They're going to need an infrastructure. I bet we're talking to them out there..

To that point, I mean the fact that Exxon and SABIC would build a plant of that size, does that kind of throw some cold water on the idea that we're going to be tight ethane anytime in the next five, six, seven years?.

Personally, I'll let Tony weigh in, but as I look at all the associated gas and rich gas, I'm having a hard time thinking we're going to run out of ethane..

Yes. Our balances for ethane, and we published them at the analyst meeting, changed considerably over the last year. So we have a slide. We published it in our investor materials all the time as to how we see it, and it's – the situation is much better than it was before.

And out of the shales, ethane is plentiful and getting more plentiful all of the time..

You mean, much better from a supply perspective?.

Yes. Yes..

Okay..

That's correct..

Okay. Got it. Thank you..

Matt, I guess I want to add one other thing, Jim alluded to infrastructure. When we look at the second wave of crackers, they need services that, particularly around storage and transportation, that are offered in and out of Mont Belvieu.

So I personally don't believe that you're going to disconnect Mont Belvieu from anything that happens further south, just like you didn't disconnect it from what's happening in Louisiana..

Does it make sense for you to – would it dilute your turns to build a frac further south than I would at Mont Belvieu at this point?.

No..

Okay. Thank you..

Your next question comes from Ted Durbin with Goldman Sachs..

Thanks. Just coming back to the Permian and the gas takeaway question.

I guess can you quantify how much gas you're moving or can you move right now on the Texas intrastates? Is it because you've got a lot of capacity on that system but it's hard to know exactly how much can come up right now before you get your new gas line built?.

Brad?.

Yeah. We can move – we've got the two pipes, the 36-inch and the 30-inch. We can move over 1 Bcf a day away from the area as it sits today. What I can tell you is on a daily basis, we run fairly full already because we've seen the volume start to show up, so..

Okay. That's helpful. Thanks.

And then second question is when you think about, whether it's a Permian gas pipe or an NGL pipe, this mandate to use American steel, I think you mentioned that you always use American steel, but I'm just curious about your thoughts on the costs as they kind of come through the industry, how that might impact your ability to pass on if there are higher costs and earn the returns on capital that you want to earn?.

We're going to adjust the kind of deals we do based on what our costs are. The one thing is we – the fact that we've had a real initiative to build, Kevin (30:40), for the last eight, ten years that we were going to buy American. We've developed pretty good relationships with the mills and we think that gives us an advantage.

Kevin (30:52), you've got anything to add? I mean, yeah, more demand probably increases costs but American capitalism is pretty neat. It has a way of making it up..

Yeah. We've been successful so far. We haven't had the big, you know, price problems. And as you know, we've bought American on virtually all our major projects for some time..

Okay. I'll leave it at that. Thank you..

We've got an American flag in here in the conference room, you know..

Your next question comes from the line of Shneur Gershuni with UBS..

Hi. Good morning, guys. A lot of my questions have been asked and answered but maybe just a quick follow-up. I think Kristina asked earlier about potential project opportunities and so forth.

You know, excluding the gas pipeline that you're thinking about out of Waha, is there kind of a number that we're thinking about in terms of how big the backlog could potentially get to? Are we talking $1 billion to $2 billion more, are we talking something on the scale of $4 billion to $5 billion? I'm just wondering if you can sort of give us a frame of reference..

Well, I think our biggest problem is holding our people back. We never talk about our backlog. We don't publish that at all, we've got this many billions of dollars of backlog, but we seem to always – if we think we're going to spend a $1.5 billion two years from now, when we get there, it's usually a lot more..

I mean, is there kind of like a capacity that you feel that you can handle on an annual basis? $4 billion to $5 billion is kind of your max capacity that your staff can handle? Or do you think that you can do something bigger than that?.

This is Bryan. We've had in the past, we've handled, quite handily, $4 billion to $5 billion without third-party acquisitions, and I think with our size and the access to capital markets to the extent there's opportunity there, we don't really see it as being a huge limiting factor.

Of course we'll always instill the discipline that we've demonstrated over the years with respect to our balance sheet and approach in DCF coverage..

Very helpful. And then just in terms of financing and equity needs and so forth, you've had a pretty decent quarter – or pretty good quarter actually – in terms of EBITDA and DCF and so forth. Does this take down your equity needs for this year? You've talked about being self-funding in 2018.

Has that timeframe moved at all either up or backwards, just given the changes to your CapEx forecast?.

Well, just on your latter notion with respect to yes, being self-funded is dependent upon a recovery, and of course we're on that. The wind's not quite fully at our back at this point, but we are continuing to spend and find the opportunities. So the more opportunities we find, the less likely we'll be fully self-funded.

But our equity needs, still as we look forward into 2018, remain light. And as far as this year, pretty much the last three quarters are a pretty good indication of the range of activity that we might have with respect to raising third-party equity..

Perfect. Thank you very much, guys. Really appreciate the color..

Your next question comes from the line of Brian Zarahn with Mizuho..

On the Chinook (34:42) project you secured customer contracts.

From a high level, how do you view producer willingness to sign contracts for existing projects, and potential future projects?.

If you look at that pipeline, the most reliable supply that you can have for a pipeline is that that comes out of your own plants, which should tell you something about our plans in the Delaware Permian from a processing perspective..

Understood. I guess maybe trying to extend throughout your other projects, how do you view the producer willingness to increase their contracted capacity? So for example, Midland-to-Sealy..

Yeah. Midland-to-Sealy, I think we're going to be fine. We originally said that pipeline was going to come on at 300,000 barrels a day. We have opted to take it up to its full 450,000 barrel a day capacity. We did that because we feel like 300,000 barrels we'll be at easily. And there's room to grow. We're talking to a lot of folks.

There's a lot of interest. I think a lot of the reason there's interest, it isn't just that they are signing up for a pipeline. They're signing up for a system that gets them to the water on the Houston Ship Channel, that gets them to a market that has 4.5 million barrels a day of refining capacity and gets them to a location that has tons of storage.

So what they're looking at I think is this is ideal for giving me the flow assurance that I want and the ability to market my crude to a variety of customers..

Along those lines on crude exports, we've seen significant growth this year.

And assuming the EIA data is correct, exceeding over 1 million barrels a day at times, how do you view the crude export opportunity given the current spread environment? And do you have enough capacity in the future to accommodate expected Permian production growth to load vessels?.

Go ahead, Bob (36:57)..

I feel like we have plenty of capacity to handle it. And I'll let Brent speak to our future potential for crude exports..

How much crude could we load today without spending a dime?.

Four million barrels a day..

Yeah. Four million barrels a day across all the terminals. And that can be increased for minimal dollar impact..

On the our (37:23) piece, for a while last year we had structural working for us, and so we were doing quite a few exports just based on structure, not based on Brent WTI spreads. But as structures come in, you're seeing these spreads widen. You're seeing it widen all the way down the curve.

Our belief, much like we said at the analyst meeting, is that these barrels have to clear on the water. There's only so much demand here domestically for this light sweet crude. It is the cheapest barrel that's going to be out there for the global market. And ultimately, this barrel it's not justified to be stored.

So where's the next move? It goes out by the water..

Thank you..

Your next question comes from the line of Jeremy Tonet with JPMorgan..

Good morning..

Hey, Jeremy..

Just wanted to touch on Waha Basis. You've talked about this a bit here, but just wondering if you could walk me through how to think about what stops that basis from widening out at this point? You've really seen it move.

And just what can you guys do to capitalize on that in the near term I guess?.

Brent?.

Waha Basis?.

Yes..

He's talking gas..

Oh, gas. Brad..

We've got a little bit left. I guess I'd say in the near term as far as this basis or pipeline capacity to take advantage of the basis. But for the most part we have sold that capacity on a firm basis away. So it's – a lot of the day-to-day business that we do is not basis-oriented between Waha and South Texas..

I think one of the things we can do to take advantage of it is, and others are trying is, they are given, present an opportunity to have more infrastructure out of there..

So does the basis just.....

Yes, this is – Jeremy, this is Tony. When you look at the forward markets on basis for the Waha area, the market's already telling you capacity is tight and going to get tighter. Infrastructure is required to solve this problem..

Great. Thanks. And then just one follow-up. You've talked about in the past, just wondered if you had any updated thoughts to share with regards to any potential in the future to adopt a dual C corp currency to kind of broaden investor access to Enterprise..

Yeah. Jeremy, that's something that we'll continue to evaluate it, but really no update..

Great. Thanks. That's it from me..

Your next question comes from the line of Faisel Khan with Citigroup..

Good morning, guys..

Good morning, Faisel..

I had two questions, but then you threw out this 4 million barrel-a-day crude oil export number. I just want to clarify that. Is that just crude oil? Or is that – you're talking about total liquids, where it's products and crude oil and condensate? I mean, my understanding is you have to have segregated tanks.

You've got to sort of – you can't just – they're not 100% interchangeable. I just want to make sure I understood your comment on the 4 million a day..

I would tell you the 4 million barrel a day does relate to all the commodities you referenced. But as far as you don't necessarily have to have completely segregated tanks if you have the ability to completely drain a tank to load a ship so it's a clean tank for the next product. And that is across the system in that regard.

It does not include refrigerated products in that number..

Right. But if you're already exporting sort of – the U.S.

exporting 5 million barrels a day of total liquids products, I mean, it's displacement, right? You can't just like – if the product was in there to be exported, then you would have the excess capacity for crude but you have to actually have both, right?.

His number doesn't have anything to do with LPG, if that's what you're asking about..

Sure. No, but for the products, right? We export, what, the extra two, three million barrels a day of product. So I'm just trying to figure out how much excess capacity you have to move crude.

I guess that's the – yeah, that's the more critical number as we grow production and keep product exports growing too, right?.

Faisal, this is Tony. From a fundamental standpoint, you're either going to export more crude or more refined product, not both, right? And the behavior of the refineries isn't that they're going to massively expand.

So if we look at that capacity and say what's the guess, if you will, as to whether or not it's going to export crude or refined products, because it won't be both, we think that crude oil exports are the one that are the game just because the refineries aren't adding all over the United States. We just don't see that..

Okay. Sure. No, okay. That's fair enough. And last question just on the Midland-to-Sealy pipeline, going back to your comments, so do you have the – I think at the Analyst Day you commented that you didn't have the 300,000 barrels a day of contracts in hand but that you were sort of very close to sort of inking those deals.

Has that been done yet?.

Yes, we – well, we have the 300,000 barrels a day filled of capacity and we actually think that we'll be at the 450,000 barrels a day capacity upon start-up..

Sure, I mean my question was on the contracts though.

Are the contracts at capacity?.

Yes..

What she's saying is we've got.....

We're up to 300,000 barrels a day..

Yeah..

Okay, okay. Got it. Okay, makes sense. Okay. That's it for me, guys. Thanks a lot..

Your next question comes from the line of Michael Bushi with TIAA (43:22)..

Hi. Good morning, gentlemen. Great quarter. I wanted to talk about the CapEx number that was up a little bit from the Analyst Day. Is that 2018 CapEx getting pulled forward or do you see new opportunities? And following up, do you expect if it is getting pulled forward from 2018 to replace that in 2018? Thanks..

Michael (43:48), this is Bryan. That is not pulling 2018 forward, that is just the addition of the projects that have been added that has moved the 2017 number up. So also clearly we didn't talk about 2018 but our 2018 number has also moved up..

Great, great..

Yeah..

That's very helpful. Thank you..

Your next question comes from the line of Barrett Blaschke with MUFG Securities..

Hey, guys.

Just wanted to follow-up on the commentary about a second round of cracker build-up, kind of timeline for that? And do you see it as all being Gulf Coast? Or do you see the East Coast finally trying to develop more of a local market around the volumes that are being produced up there?.

This is Tony. So we see the timeline as early 2020s. And as we look at the projects for now we see it as all being Gulf Coast..

So, no thoughts on – I guess that all tries to remain an export market as it builds out?.

Up in the Northeast?.

Yes..

Yes, sir. That's how we see it..

Okay. Thank you..

Thank you..

Your next question comes from the line of Chris Sighinolfi with Jefferies..

Hey. Good morning, Jim..

Good morning..

Appreciate the comments about the many attributes of the Ship Channel; I was intrigued by the conversation earlier on the call about export capacity. So I just wanted to try and clarify, that 4 million barrel a day number that you quoted, I'm just trying to reference that relative to let's say what the 1Q volume was.

So if I just think crude and refined products somewhere in the neighborhood of 1 million barrels a day, is that the right sort of starting reference point to think about your headroom without meaningful capital spend?.

Yes. That's probably in the ballpark. Yes..

Okay. Okay. And then second just – or as a quick follow-up, the number that you quoted for crude export last night, or I guess this morning, 475 – 475,000 barrels a day, was just slightly different than the number that I saw in the release in April.

So I was just wondering if it was just a difference in definition? Or if I misinterpreted something? Or any help in clarifying that would be helpful..

Yes. This is Randy. The press release that we put out in March was reflecting gross barrels. And then what we referred to in the press release, that's more our economic barrels, or net, our netted.....

Okay. Okay. Perfect, perfect. And a final just follow-up on exports, Jim, your comments in the release, you had talked about Morgan's Point ramping to sort of 125,000 barrel a day level by sort of the end of the year.

Just curious, I know your slide presentation had sort of indicated around that range as an average for 2017, but you had mentioned in those presentation slides the opportunity of shippers to sort of flex around, customer elections might change.

I'm just curious if I'm reading just way too much into your comment and nothing's changed? Or if there were any maybe changes in the election?.

I think you're probably reading a little much into it..

Okay. I'm at risk of doing that at times so that's fair. All right. Thanks a lot, guys. Appreciate it..

Nicole, this is Randy. I think we have time for one more question..

Okay. And your final question comes from the line of John Edwards with Credit Suisse..

Good morning, guys. Thanks for taking my question. Just on the second wave of steam crackers in terms of size, I guess this first wave was around 700,000 barrels, give or take, of incremental ethane demand. So maybe, Tony, you can tell us what's – how big you see that second wave in terms of ethane demand..

John, this is Jim and I'll turn over to Tony. You know, there's a basic assumption that is the gas to crude spread. So if you're assuming second wave, you're assuming a wide gas to crude spread, which frankly we do, but that can – you have crude fall relative to gas so that's a different ballgame, but we think it won't.

So, Tony?.

Right. Yes, so we have been on the bandwagon that the U.S. has ample natural gas for a considerable time. But relative to the question, the projects that we are monitoring today have, call it, between 250,000 to 300,000 barrels of incremental demand.

Those are the handful that we're monitoring today as I'm going to call them prospects, okay?.

Okay..

And that would include Exxon, SABIC, Tony?.

Yes, sir, it would..

Okay.

Now does that include Shell's cracker in the northeast or no?.

Those are the existing wave. Those are being built. They're under construction. This is the second wave..

Okay. All right. Fair enough. And then just I guess for my second question, Jim, you made the comment better to build than buy in the Permian. So, you know, I just thought maybe you could give us a little more insight into the Permian opportunity.

I mean obviously you've talked about some of these with the – your Midland-to-Sealy pipelines are, you think, is going to hit 450,000 barrels per day by the third quarter, obviously very bullish there.

So any other comments you can make around opportunities that you're seeing in the Permian and how Enterprise can take advantage?.

We're building a truck line upstream of Midland.

What is that, Laurie, how long is that pipe that you're building up, the Loving County?.

From Loving County into Midland about 170 miles, 150 miles, 130 miles..

All right. So we are building upstream of Midland. We're being very disciplined. And I'm – I mean, heck, I don't know, we're pretty sold on the place. We're pretty proud of our position. I really don't know how to answer the question other than we continue to build out there in both crude gas and NGLs..

Okay. Fair enough. Thank you..

Thank you. Nicole, if you would give our participants the replay information, and then after that you can go ahead and end the call. Thank you..

Certainly. And we thank you for your participation today. Please note there will be a replay available of today's conference call beginning at 1:00 Eastern Standard time. You may dial 1-800-585-8367 to access the encore replay and use today's conference ID number of 49822180. Again, that's 1-800-585-8367 and use the conference ID number of 49822180.

This recording will be available until midnight on May 9, 2017. Thank you. You may now disconnect..