CSI Compressco Sees Robust Demand in 2019

CSI Compressco LP said demand remains strong for new-build, high-horsepower compression equipment as customers build natural gas infrastructure in key producing areas.

The contract-compression partnership is managed by CSI Compressco GP Inc., an indirect, wholly-owned subsidiary of TETRA Technologies Inc.

The partnership reported a net loss of US$3.7 million for the fourth quarter of 2018 compared to a loss of US$7.9 million in the third quarter and a loss of US$10.7 million in the fourth quarter of 2017. Revenues were US$138 million, versus US$115 million for the third quarter and US$83 million for the final period of 2017.

CSI Compressco added 92,822 hp (69 MW) to its compression fleet last year, bringing it to 1,135,477 hp (847 MW), and it plans to deploy 99,000 more (74 MW) this year. Fleet utilization increased slightly in the fourth quarter to 86.6%. Usage of high-horsepower equipment (greater than 1000 hp or 0.75 MW) was 95%, which the company said was essentially full utilization.

The firm received US$18 million in equipment orders in the fourth quarter vs US$188 million for all of 2018. President Owen Serjeant said, “Most of these orders were from Permian Basin midstream companies investing to address takeaway constraints and building gas processing plants.”

The new equipment sales backlog was US$105.2 million at the end of 2018. “We do not expect new equipment orders in 2019 to match the 2018 levels,” Serjeant said. “Orders placed after the first quarter of 2019 will likely be delivered in 2020 due to lead times of the key components for our equipment.”