Energy Transfer Partners LP (ETP) has received approval from its board of directors to construct a natural gas pipeline. The publicly traded energy pipeline operator will transport natural gas from the Marcellus and Utica Shale based processing facilities to multiple markets in the U.S. and Canada.
In fact, Energy Transfer Partners has already entered into long-term contracts with interested shippers such as Antero Resources Corporation (AR), Range Resources Corporation (RRC) and American Energy Utica, LLC. Both Antero Resources and Range Resources are independent oil and gas companies while American Energy Utica is an upstream energy firm.
Moreover, Energy Transfer Partners will commence an open season today to secure other long-term binding contractual commitments from shippers for the new pipeline.
The to-be built pipeline will initially transport natural gas at a rate of 2.2 billion cubic feet per day. Depending on customer demand, the partnership can also increase the transportation capacity to roughly 3.25 billion cubic feet per day.
Energy Transfer Partners added that the pipeline will start transporting crude from the producing region to the Midwest Hub and Gulf Coast markets by the fourth quarter of 2016. Transportation services to the Michigan and Canadian markets are expected by the second quarter of 2017. Commencement of the services is subject to regulatory approvals and response to the open season.
Dallas, TX-based Energy Transfer Partners, is a master limited partnership, engaged primarily in the gathering, processing, storage and transportation of natural gas. The partnership currently carries a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.
Interested investors can also consider Magellan Midstream Partners LP (MMP), which sports a Zacks Rank #1 (Strong Buy).