MPLX, Partners Hold Binding Open Season for Whistler Pipeline

MPLX LP MPLX, along with its joint consortium partners in the Whistler Pipeline LLC, recently commenced a binding open season to gauge shipping commitments for the remaining transportation capacity on the pipeline. The Whistler Pipeline will ship natural gas from Waha Hub in the Permian Basin to Agua Dulce Hub of South Texas.

The open season began last Friday and is expected to close on Dec 16, 2019. Potential shippers are expected to make volume commitments for the pipeline during this period. MPLX, the logistic arm of Marathon Petroleum Corporation MPC, and WhiteWater expect the 42-inch pipeline to come online in the summer of 2021. Construction of the 450-mile pipeline, with a transportation capacity of 2 billion cubic feet of natural gas per day, is likely to start next year.

The natural gas pipeline will provide an impetus to explorers in the Permian Basin, wherein flaring rate is high. In addition to the Whistler Pipeline, MPLX is well positioned to capitalize on the growing demand for fresh midstream assets, in order to support increasing volumes of crude oil, natural gas and NGLs in the prolific shale plays in the United States.

To capitalize on the pipeline bottleneck in the Permian, MPLX has various pipeline projects underway. These are likely to position the firm well for generating strong distributable cash flows in the future.

As we know, MPLX — in partnership with other MLPs — is constructing the 600-mile Permian Gulf Coast Pipeline (PGP) pipeline that will transport oil to the Gulf Coast from Permian and is likely to be operational by 2020. The partnership is also constructing fractionation and processing plants in Marcellus & Utica shale plays, wherein it has already been established as the largest processor and fractionator.

Price Performance

Findlay, OH-based MPLX has lost 23.8% year to date against the 8.1% rise of the industry it belongs to.

Zacks Rank & Stocks to Consider

Currently, MPLX has a Zacks Rank #4 (Sell). Some better-ranked players in the energy space are CNX Resources Corporation CNX and Contango Oil & Gas Company MCF. Both the companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CNX Resources’ 2019 earnings per share have witnessed three upward movements and no downward revision in the past 30 days.

Contango Oil & Gas’ bottom line for the current year is expected to rise around 87% year over year.

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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.

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