Crestwood lowers 2016 capex

OREANDA-NEWS. February 25, 2016. Crestwood Equity Partners will scale back capital expenditures to \\$50-70mn in 2016, down from \\$151mn in 2015, as it seeks to curb losses due to lower NGL volumes.

Crestwood executives told analysts on today's call that 2016 throughput will continue to fall due to lower commodity prices. The Houston-based partnership saw a net loss of \\$1.4bn during the fourth quarter of 2015, a substantially greater loss than the \\$30.7mn loss reported during the same quarter of 2014, due to lower production volumes and throughput in the southwest Marcellus and Barnett shales.

"During 2016, gathering and processing volumes should be down 15-20pc," Crestwood senior vice president and chief financial officer Robert Halpin said. "On a lot of the assets, you would expect quarter-over-quarter periodic decline throughout the year."

Volumes on its other segments should be fairly steady, they said. Volumes in Crestwood's 41 Bcf Marcellus natural gas storage cavern and its COLT crude storage in the Bakken shale should remain steady to 5pc higher in 2016. The NGL marketing, supply and logistics segment will likely remain unchanged relative to 2015 levels.

The partnership suffered from lower commodity prices in the fourth quarter.

"Our trucking business was very challenged due to a lack of cold weather demand for propane in the Northeast, and due to narrow butane spreads for blending stock for motor gasoline," said chief executive officer Robert Phillips. The trucking business is expected to remain steady this year due to new NGL supply contracts to move Marcellus-Utica and Canadian propane and butane volumes into the northeast US markets.