Credit: Shutterstock photoEnergy pipelines and terminals operator, Sunoco Logistics Partners LP ( SXL ) is planning to manufacture cryogenic tanks at a facility located outside Philadelphia for storing roughly 2.4 million barrels (Bbl) of natural gas liquids (NGL) which will contain propane, butane and ethane, as per Reuters. Sunoco Logistics also has an intention to turn the facility into a NGL processing and export hub. For this, the partnership is seeking authorization from the Pennsylvania state.
Of the total 2.4 million Bbls to be stored, 1.5 million Bbls will be propane, 600,000 Bbls is expected to be butane while the rest 300,000 Bbls will likely be ethane. This is as per the partnership's fillings with the state department of environmental protection.
Philadelphia-based Sunoco Logistics, a master limited partnership, acquires, owns, and operates a geographically diverse portfolio of refined product and crude oil pipelines and terminal facilities. Its facilities are located in 17 states in the Northeast, the Midwest, the Southeast and the Southwest of the country.
With the low-risk and stable cash flow-generating energy infrastructure assets, Sunoco Logistics offers investors an opportunity to capture income growth through steadily rising cash distributions and capital appreciation.
However, unfavorable regulatory changes by the Federal Energy Regulatory Commission (FERC) would impact the partnership's results. This will also contribute to Sunoco Logistics' increasing borrowing costs and depress the market value of its limited partner units.
Sunoco Logistics currently carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the energy sector like SandRidge Mississippian Trust I ( SDT ), Sandridge Mississippian Trust II ( SDR ) and Murphy USA Inc. ( MUSA ). All these stocks sport a Zacks Rank #1 (Strong Buy).
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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.
