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Energy Transfer Partners to Start Open Season - Analyst Blog

By: Zacks.com
Posted: 3/10/2014 3:50:00 PM
Referenced Stocks: MLP;NGL;ETP;MMP;NS

Publicly traded energy pipeline operator, Energy Transfer Partners LP ( ETP ) plans to start an open season, on Mar 12, to gauge shipper interest for a crude oil pipeline.

The pipeline would link several locations in North Dakota and multiple refineries and terminals in the Midwest and Gulf Coast. Among these is a terminal in Nederland, Texas belonging to Sunoco Logistics Partners L.P. ( SXL ).

Energy Transfer Partners is a master limited partnership (MLP) engaged primarily in the gathering, processing, storage and transportation of natural gas. Additionally, the partnership holds a 70% stake in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids (NGL) storage, fractionation and transportation assets in Texas, Louisiana and Mississippi. Energy Transfer Partners is a premier MLP with strategically positioned assets that are situated to benefit from growing production from unconventional sources of natural gas.

The Dallas-based partnership reported earnings per unit of 61 cents in the fourth quarter, beating the Zacks Consensus Estimate by 2 cents. Quarterly revenues also increased 9.6% year over year to $12,032.0 million and surpassed the Zacks Consensus Estimate of $11,468.0 million. Higher revenues from the NGL Transportation and Services segment and from investments in Sunoco Logistics Partners led to the improvement.

We also positively view the increase in fourth quarter cash distribution provided by the partnership. Energy Transfer Partners increased distribution to 92 cents per unit, up 1.66% sequentially and 2.94% year over year.

However, gathering and processing MLPs such as Energy Transfer Partners are more sensitive to commodity prices compared to other MLP subgroups. As a result, collapsing energy prices may adversely affect their cash flow stability.

Energy Transfer Partners currently carries a Zacks Rank #3 (Hold), implying 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 consider better-ranked players from the industry such as Magellan Midstream Partners LP ( MMP ) and NuStar Energy L.P. ( NS ). Both these stocks currently holds a Zacks Rank #2 (Buy).



ENERGY TRAN PTR (ETP): Free Stock Analysis Report

MAGELLAN MDSTRM (MMP): Free Stock Analysis Report

NUSTAR ENERGY (NS): Free Stock Analysis Report

SUNOCO LOGISTIC (SXL): Free Stock Analysis Report

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