On the surface, they could increase the distr to $.85 ($3.40 annually) and still maintain 1.2X dcf coverage. But I doubt they will do it.
First, they do not want to make commitments for 2005. More importantly, a 1 year old article in Gas Processor had written that they are obligated to pay their debt down aggressively and they actually need to maintain higher coverage than other MLPs. So, they would actually have to borrow to pay us more.
I see that the dcf/unit for 2004 is expected to be as high as $4.15/unit. This, on the surface gives NBP a coverage ratio of 1.29x on the eternal payment of $3.20, however, the GP take also needs to be blended into the total payout (LP distributions + GP incentive distribution rights payments). Even after GP payout it looks decent. However, they put dcf/unit in 2005 at $3.50-$3.70. Ummm, they are going in the wrong direction, and lets say they hit the high end, as they probably will...thats still not very good. What does it take for these goofballs to grow the distribution?
Based on the 2005 forcast, I wouldn't expect anything other than a marginal increase in the distribution. If you want a MLP that is increasing its distribution fast, look at MWE. I bought it about a year ago when it was paying out $2.54/unit and it has since raised it to $3.04/unit and I expect a small increase this quarter to either $3.08 and there is a remote chance that they might push it as high as $3.12.