Enterprise To Build 571 Mile Pipeline From Permian Basin

Enterprise Products Partners, L.P. (NYSE:EPD) recently announced its intention to construct a new 571 mile pipeline to carry increasing volumes of natural gas liquids (“NGL”) from the Permian Basin to the partnership’s NGL fractionation and storage complex in Mont Belvieu, TX.

The 24 inch diameter pipeline, namely the Shin Oak NGL pipeline, will begin from Enterprise Products Partners’ Hobbs NGL fractionation and storage facility in Gaines County, TX. The pipeline will have an initial design capacity of 250,000 barrels per day (bpd) but will be expandable to 600,000 bpd. This project is supported by long-term customer commitments and is projected to come online in the second quarter of 2019.

In addition to mixed NGL supplies collected at the Hobbs facility, the Shin Oak pipeline will have takeaway capacity for mixed NGLs extracted at natural gas processing plants in the Permian region, including two Enterprise facilities that were commissioned in 2016 and the Orla I plant that is slated to commence operations in the second quarter of 2018. The new pipeline will also boost the company’s capacity to transport purity NGL products from Hobbs to Mont Belvieu.

Enterprise’s Mont Belvieu NGL complex is the largest of its kind in the world, enabling customers to access about 130 million barrels of underground storage capacity as well as 670,000 bpd of NGL fractionation capability. Enterprise is constructing a ninth fractionator at Mont Belvieu to augment its NGL fractionation capacity by 85,000 bpd on its expected completion in the second quarter of 2018.

Pipelines link Mont Belvieu to the expanding U.S. petrochemical industry on the Gulf Coast as well as Enterprise’s industry-leading LPG and ethane deepwater marine export terminals on the Houston Ship Channel.

Investor confidence on Enterprise Products Partners’ stock is reflected in its price chart. Units of the partnership appreciated 2.6% in the last three months, while the Zacks categorized Oil & Gas – Product/Pipeline MLP industry registered an increase of 1.8% in the same time span.

Currently, Enterprise Products Partners carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Bellatrix Exploration Ltd. (TO:BXE) , Crescent Point Energy Corp. (TO:CPG) and Cenovus Energy Inc. (TO:CVE) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bellatrix Exploration posted a positive earnings surprise of 240.00% in the preceding quarter. It beat estimates in three of the four trailing quarters with an average positive earnings surprise of 58.54%.

Crescent Point Energy posted a positive earnings surprise of 244.44% in the preceding quarter. It beat estimates in all the four trailing quarters with an average positive earnings surprise of 127.16%.

Cenovus Energy posted a positive earnings surprise of 583.33% in the preceding quarter. It beat estimates in two of the four trailing quarters with an average positive earnings surprise of 74.89%.

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