Enterprise Products Partners L.P.
) announced that it intends to oppose the unfavorable verdict by
a Dallas jury over not including
Energy Transfer Partners, L.P.
) in the Keystone XL pipeline project.
The duo originally came together over a proposed pipeline project
that was cancelled in Aug 2011 due to lack of customer support.
Prior to that, in Apr 2011, both Enterprise and Energy Transfer
signed a non-binding letter of intent disclaiming any partnership
or joint venture between them. Subsequently, Enterprise Products
excluded Energy Transfer from a subsequent Keystone XL pipeline
project that was to transport crude oil from Oklahoma to the Gulf
The jury however viewed things differently and awarded Energy
Transfer $319 million in actual damages. This legal position has
been contested by Enterprise Products which emphasizes on the
absence of any mutual formal commitment.
Enterprise Products Partners is engaged in providing a wide range
of midstream energy services to the producers and consumers of
natural gas, natural gas liquids (NGL) and crude oil. The
partnership's assets include 51,000 miles of onshore and offshore
pipelines, approximately 200 million barrels of storage capacity
for NGLs, refined products and crude oil, and 14 billion cubic
feet of natural gas storage capacity.
We continue to view Enterprise Products Partners as a core
holding in the master limited partnership portfolio, given its
string of organic growth projects, potential acquisitions, strong
balance sheet and solid liquidity position. The partnership is
one of the largest fully integrated midstream service providers
with a positive long-term outlook thanks to its significant
geographic and business diversity.
With its diverse set of NGL, natural gas, crude oil and refined
products midstream infrastructure assets, the partnership
possesses fundamental strengths that will continue to support
However, Enterprise remains vulnerable to macro conditions and
unstable oil and gas prices, which in turn could hurt margins in
NGL, natural gas and other businesses.
Enterprise currently carries a short-term Zacks Rank #3 (Hold).
Better-ranked stocks in the same sector include
Willbros Group Inc.
Patterson-UTI Energy Inc.
). Both these stocks hold a Zacks Rank #1 (Strong Buy).
ENTERPRISE PROD (EPD): Free Stock Analysis
ENERGY TRAN PTR (ETP): Free Stock Analysis
PATTERSON-UTI (PTEN): Free Stock Analysis
WILLBROS GROUP (WG): Free Stock Analysis
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