Enterprise Products Partners L.P.
) announced an expansion of its liquefied petroleum gas (LPG)
export terminal at Oiltanking's complex on the Houston Ship
Channel. Enterprise's LPG terminal is supported by a 50-year
service agreement with
Oiltanking Partners, L.P.
) to provide additional dock space and related services.
The expanded LPG export terminal is expected to be in service by
the end of 2015 and is supported by long-term LPG export
agreements. Upon completion of the expanded facilities,
Enterprise will have aggregate capacity to load in excess of 16
million barrels per month of low-ethane propane and/or butane.
This expansion is in lieu of the second LPG terminal announced in
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 50,000 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 (MLP) 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 given its
significant geographic and business diversity.
Enterprise Products Partners increased its third quarter cash
distribution rate by 6% to $0.69 per common unit, or $2.76 per
unit on an annualized basis, thus marking the partnership's 37th
consecutive quarterly increase. 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 distribution growth.
Enterprise Products Partners made capital investments of around
$1.2 billion in the third quarter of 2013 and expects to bring
online $7.5 billion worth of major assets from 2013 through 2015,
including $1.5 billion in the final quarter of 2013. The key
projects consist of two NGL fractionators at Mont Belvieu; Texas
Express NGL pipeline (TEP); Front Range NGL pipeline; extension
of the Seaway crude oil pipeline; and the completion of Eagle
Ford crude oil pipeline. The successful execution of these
projects will be value accretive to future cash flows.
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 carries a Zacks Rank #3 (Hold). Some better-ranked
stocks in the oil and gas sector include
Harvest Natural Resources Inc.
Athlon Energy Inc.
). All these stocks hold a Zacks Rank #1 (Strong Buy).
ATHLON ENERGY (ATHL): Free Stock Analysis
ENTERPRISE PROD (EPD): Free Stock Analysis
HARVEST NATURAL (HNR): Free Stock Analysis
OILTANKING PTNR (OILT): Free Stock Analysis
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