EPD to Expand LPG Export Facility - Analyst Blog
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 Oct 2013.
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. ( HNR ), and Athlon Energy Inc. ( ATHL ). All these stocks hold a Zacks Rank #1 (Strong Buy).
ATHLON ENERGY (ATHL): Free Stock Analysis Report
ENTERPRISE PROD (EPD): Free Stock Analysis Report
HARVEST NATURAL (HNR): Free Stock Analysis Report
OILTANKING PTNR (OILT): Free Stock Analysis Report
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