Enterprise Products Partners L.P.
) saw fluctuating investor reaction to its latest announcement
relating to the start-up of the eighth natural gas liquids (NGL)
fractionator at its Mont Belvieu complex, Texas. While the stock
price moved down 1.6% to touch $61.10 on the day of the
announcement, it surprised with a 0.5% and 1.25% rise in the next
two trading sessions to reach $62.15 per share on Thursday.
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The addition of the new unit, which has a capability to
fractionate about 85,000 barrels per day (bpd) of NGL, has
enhanced the fractionation capacity at Enterprise's Mont Belvieu
facility to around 655,000 bpd. The facility's capacity was
400,000 bpd three years ago. The partnership's eighth NGL
fractionator is the second unit commissioned by Enterprise at
Mont Belvieu in the last two months. Both these units were
completed ahead of schedule and within budget.
The construction of fractionators seven and eight by Enterprise
was part of a joint venture with
Western Gas Partners LP
), an affiliate of
Anadarko Petroleum Corporation
). Enterprise, the operator of the two units, holds a 75%
interest. The remaining 25% interest is held by Western Gas
Enterprise's eighth fractionator will accommodate growing NGL
production from domestic shale plays, including the Eagle Ford in
South Texas, and other basins in the Rocky Mountain and
The global petrochemical industry is largely benefited by
increasing NGL production from the shale plays as it provides a
low-cost natural gas-derived feedstock compared to more expensive
crude oil-based derivatives.
Enterprise continues to position itself to capitalize on NGL
market dynamics by increasing its Eagle Ford shale exposure.
Management also expects the NGL market to improve in the balance
of the year driven by inventory improvements in the ethane and
Enterprise carries a Zacks Rank #3 (Hold). Investors interested
in the oil and gas industry may also consider
SM Energy Company
), which carries a Zacks Rank #1 (Strong Buy).