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Enterprise Products Partners to Expand Ethylene Projects

Zacks Equity Research

Enterprise Products Partners, L.P. EPD recently announced that it has received customer commitments supporting two expansion projects for ethylene.

These expansion projects are expected to enhance the partnership’s ethylene infrastructure. Enterprise is reusing a large, high-capacity ethylene storage well at its Mont Belvieu, TX complex. On completion of the project, which is anticipated as early as the third quarter of 2018, the 5.3 million barrel facility will be able to inject/withdraw ethylene at a rate of 2,000 barrels per hour (“BPH”). Gradually, it will become expandable to 4,000 BPH. There are seven third-party ethylene pipelines within two miles of the ethylene well that offer considerable connectivity prospects into the high-capacity system.

Enterprise is constructing a new 24 mile, 12 inch diameter ethylene pipeline to connect Mont Belvieu to Bayport, TX. This will boost its ethylene capabilities and provide the potential to link both producing and consuming sites south of the Houston Ship Channel to Mont Belvieu.

The ethylene pipeline will be running through Enterprise’s ethane export terminal at Morgan’s Point, which provides the partnership future flexibility if it develops ethylene export capabilities at the Morgan’s Point marine terminal.

Moreover, Enterprise is well positioned to take advantage of the growing U.S. ethylene production capacity over the next three years, which would require easier access to logistics services. The partnership has been operating ethylene storage facilities and pipelines for more than two decades. These growth capital projects will develop its ethylene system to cater to the petrochemical industry as well as complement its existing capabilities.

Investor confidence on the Enterprise Products Partners’ stock is reflected in its price chart. Shares of the partnership appreciated 0.6% in the last three months, while the Zacks categorized Oil & Gas – Product/Pipeline MLP industry’s decrease of 0.1% in the same time span.

Currently, Enterprise carries a Zacks Rank #3 (Hold). Some better-ranked players in the same space include Energy Transfer Equity, L.P. ETE, Crescent Point Energy Corp. CPG and Cenovus Energy Inc. 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.

Energy Transfer Equity posted a negative earnings surprise of 16.00% in the preceding quarter. It had an average negative earnings surprise of 9.62% in the four trailing quarters.

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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