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Enterprise Products Increases Capacity on Pipeline System - Analyst Blog

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Enterprise Products Partners L.P.EPD announced the commencement of a supplemental binding open commitment period to establish shipper demand for extra capacity on the Aegis pipeline between Mont Belvieu, TX and the Napoleonville, LA along the Mississippi River corridor. The 270-mile Aegis pipeline system transports purity ethane from the partnership's Mont Belvieu liquids storage complex to petrochemical facilities located in Texas and Louisiana.

The initial 60-mile stretch from Mont Belvieu to Beaumont, TX became operational in Sep 2014. The rest of the Aegis pipeline will be carried out in two phases, which are slated for completion by this year end.

The incremental capacity will be generated by installing additional pumps. The company will offer this additional capacity as potential shippers continue to show interest in it. This capacity is expected to be made available in the first quarter of 2018.

Enterprise Products Partners, a leading master limited partnership, 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 51,000 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 MLP portfolio, given its string of organic growth projects, potential acquisitions, strong balance sheet and solid liquidity position. The partnership is one of the major fully integrated midstream service providers with a positive long-term outlook, and has significant geographic and business diversity.

Enterprise Products Partners continues to position itself to capitalize on the NGL market dynamics by increasing its Eagle Ford Shale exposure. Eagle Ford continues to be a growth driver for the partnership by offsetting volume weakness in other regions of the mid-continent.

We believe that Enterprise Products Partners has solid cash flow stability based on its quality pipeline, storage assets and geographic diversity. Yet, volume risk and commodity price exposure could weigh on its near-term results. We also remain apprehensive of a volatile NGL pricing environment.

At present, Enterprise Products Partners carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Western Gas Equity Partners LP WGP , CNOOC Ltd. CEO and Marathon Petroleum Corporation MPC . All these stocks sport a Zacks Rank #1 (Strong Buy).

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ENTERPRISE PROD (EPD): Free Stock Analysis Report

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


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

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