EPD Plans LPG Plant on Gulf Coast - Analyst Blog


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Midstream energy service provider, Enterprise Products Partners L.P. ( EPD ) plans to build a new liquefied petroleum gas (LPG) export terminal on the Gulf Coast to accommodate the growing demand for propane and butane from international customers.

The terminal, scheduled to be commissioned in the fourth quarter of 2015, will be designed to handle very large gas carriers. The initial loading capacity for export grade propane or butane is anticipated to be about 11,000 barrels per hour, or about 6 million to 6.5 million barrels per month.

Recently, Enterprise announced expansion plans for its LPG export terminal located on the Houston Ship Channel by additional 1.5 million barrels (MMBbls), or three cargoes per month. Upon completion of this expansion and the new terminal, the partnership will have aggregate capacity to load about 15 million to 16 million barrels per month of low-ethane propane or butane at its LPG marine terminals.

Enterprise will be able to provide exceptional operational flexibility and reliability to its customers upon completion of its second export marine terminal. Separate, dedicated pipelines will supply LPG from the partnership's large fractionation and storage complex in Mont Belvieu, Texas, to each of these terminals.

In 2012, U.S. propane output from shale gas rose, but due to a dearth of export infrastructure the majority of the yield was circulated in the domestic market, depressing U.S. prices well below international levels.

During 2013, LPG exports increased as companies began setting up export infrastructure. In Sep 2013, Royal Dutch Shell plc ( RDS.A ) announced its selection of a site in Louisiana for a natural gas-to-liquids facility. The new facilities are supported by over 25 customers and related long-term contracts, some of which extend to 2024.

Enterprise carries a Zacks Rank #4 (Sell). However, Zacks Ranked #1 (Strong Buy) stocks - China Petroleum & Chemical Corp. ( SNP ) and Stone Energy Corp. ( SGY ) - could be good buying options for the short term.

ENTERPRISE PROD (EPD): Free Stock Analysis Report

ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report

STONE ENERGY CP (SGY): Free Stock Analysis Report

CHINA PETRO&CHM (SNP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: EPD , RDS.A , SGY , SNP

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