Double Eagle Pipeline LLC, a joint venture (JV) between
Magellan Midstream Partners LP
Kinder Morgan Energy Partners
) has inked a deal with
Anadarko Petroleum Corp.
), a major independent oil and natural gas exploration and
production (E&P) company in the world. While Magellan
Midstream is a publicly traded energy pipeline partnership,
Kinder Morgan Energy is the largest independent owner and
operator of petroleum product pipelines in the US.
ANADARKO PETROL (APC): Free Stock Analysis
HARVEST NATURAL (HNR): Free Stock Analysis
KINDER MORG ENG (KMP): Free Stock Analysis
MAGELLAN MDSTRM (MMP): Free Stock Analysis
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Per the long-term contract, Double Eagle will carry the increased
crude and condensate produced at the Eagle Ford Shale from
Gardendale, Texas to the Houston Ship Channel through the Kinder
Morgan Crude and Condensate pipeline system (KMCC). Thus, this
will result in the expansion of Double Eagle's Eagle Ford
To support the expansion project, Double Eagle is planning to
manufacture a pump station along with a storage facility of
160,000 barrels capacity at Gardendale. Double Eagle will also
construct a 10-mile pipeline for connecting Double Eagle Pipeline
with KMCC Pipeline.
Double Eagle will carry the crude and condensate output from its
to be manufactured station at Gardendale to the Helena station of
KMCC. At the Helena station, KMCC will manufacture a 240,000
barrel-storage facility to store the transported crude and
condensate, from where KMCC will carry the output to the Houston
Ship Channel. Magellan Midstream added that the creation of the
facilities will likely be over by the first half of 2015.
Magellan Midstream believes that the expansion project will be
beneficial to the Eagle Ford producer Anadarko Petroleum for
getting access to the markets in the Houston region. Moreover,
the development is likely to earn increased cash flows for
Tulsa, Oklahoma-based Magellan Midstream owns and operates a
diversified portfolio of energy infrastructure assets. The
partnership currently carries a Zacks Rank #2 (Buy), which
implies that it is expected to outperform the broader U.S. equity
market over the next one to three months.
One can also consider
Harvest Natural Resources Inc.
) in the energy sector that offers value. The stock sports a
Zacks Rank #1 (Strong Buy).