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MMP Stretches Arkansas Open Season - Analyst Blog

Posted: 10/15/2013 3:46:00 PM
Referenced Stocks: DRQ;KMI;MLP;MMP;VET

Tulsa, Okla.-based publicly traded energy pipeline partnership Magellan Midstream Partners LP ( MMP ) has extended the period of open season for its Arkansas pipeline project from Oct 16, 2013 to Nov 4, 2013. The open season is for shippers of refined petroleum products from Fort Smith, Ark.-based terminal of Magellan Midstream to the state's Little Rock market.    

The 160-mile pipeline project will have a capacity to carry roughly 75,000 barrels per day of refined petroleum products like gasoline, jet fuel and diesel fuel. The partnership expects the pipeline to be online by third quarter 2015, subject to the response to the ongoing open season and necessary approvals from the regulators.

Magellan Midstream, a master limited partnership (MLP), owns an attractive portfolio of energy infrastructure assets that generate stable and recurring fee- and tariff-based revenues. The partnership primarily transports, stores, and distributes refined petroleum products and, to a lesser extent, ammonia. Magellan Midstream conducts its operations in three segments: Refined Products, Crude Oil and Marine Storage.  

However, unfavorable regulatory changes by the Federal Energy Regulatory Commission (FERC) would impact the partnership's results. This will also contribute toward increasing Magellan Midstream's borrowing costs and depressing the market value of its limited partner units.

Magellan Midstream currently holds 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 look at energy firms like Dril-Quip Inc. ( DRQ ), Kinder Morgan Inc. ( KMI ) and Vermilion Energy Inc. ( VET ) that offer prospects. All these stocks sport a Zacks Rank #1 (Strong Buy).

DRIL-QUIP INC (DRQ): Free Stock Analysis Report

KINDER MORGAN (KMI): Free Stock Analysis Report

MAGELLAN MDSTRM (MMP): Free Stock Analysis Report

VERMILION EGY (VET): Free Stock Analysis Report

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