MarkWest Energy Commences Open Season - Analyst Blog


Natural gas processor and distributor, MarkWest Energy Partners LP ( MWE ) is going to start a binding open season for its previously-announced Liberty Ethane Pipeline on Nov 8. The open season is for the shippers willing to carry pure ethane from Majorsville to Houston, Pennsylvania. The season is expected to close by Dec 9, 2013.

The partnership expects the pipeline to start operating by fourth-quarter 2013, depending on the responses from the open season along with regulators' approval.

According to MarkWest Energy, Liberty Ethane Pipeline system will give the shippers an opportunity to get access to the international ethane markets, by carrying purified ethane produced from the Marcellus Shale formation's emerging natural gas fields. Moreover, shippers who commit long-term volume trade will be offered premium transportation services at attractive rates.  

The partnership reveals that the pipeline project will also include de-ethanization facilities apart from having infrastructure related to transportation of ethane. Ethane, which is one of the important components of natural gas, will be separated from all the other components through de-ethanization method.     

In a separate press release, MarkWest Energy declared that it has entered into a long-term, fee-based contract with Antero Resources Corporation ( AR ), an oil and gas exploration and production firm.

Per the agreement, MarkWest Energy is expected to manufacture an extra cryogenic gas processing plant at its Doddridge County, W.Va-based Sherwood complex. The plant - with an estimated processing capacity of 200 million cubic feet per day (MMcf/d) - is believed to be online by the third quarter of 2014. The plant will augment the complex's processing capacity, bringing it to roughly 1 billion cubic feet per day (Bcf/d).     

MarkWest Energy currently carries a Zacks Rank #3 (Hold), which implies that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better performing oil and gas production pipeline partnerships like Energy Transfer Equity LP ( ETE ) and Magellan Midstream Partners LP ( MMP ) that offer value. Both the partnership sport a Zacks Rank #2 (Buy).

ANTERO RESOURCE (AR): Free Stock Analysis Report

ENERGY TRAN EQT (ETE): Free Stock Analysis Report

MAGELLAN MDSTRM (MMP): Free Stock Analysis Report

MARKWEST EGY PT (MWE): Free Stock Analysis Report

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Zacks Investment Research

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

This article appears in: Investing , Business , Stocks

Referenced Stocks: AR , ETE , MMP , MWE

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