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EPD Adds Fractionator in Texas

Zacks Equity Research

Midstream energy service provider, Enterprise Products Partners L.P. (EPD) announced that another natural gas liquids (NGL) fractionator at its Mont Belvieu, Texas complex is now operational. The new unit, which is the seventh by the company at Mont Belvieu, has the capability to fractionate up to 85,000 barrels per day (:BPD) of NGL. It increases total fractionation capacity at Enterprise’s Mont Belvieu facility to 570,000 BPD.

The new fractionator will also facilitate the increasing NGL production from domestic shale plays, including the Eagle Ford in South Texas, and other basins in the Rocky Mountain and Mid-continent regions.

The construction of the eighth fractionator is also expected to be completed by mid-fourth quarter 2013. Both the seventh and eighth fractionators are being developed as part of a joint venture with Western Gas Partners, LP, an affiliate of Anadarko Petroleum Corporation (APC). Enterprise will operate the new units and owns a 75% interest. Western Gas Partners holds the remaining 25% interest in each of the two fractionators.

As Eagle Ford Shale is gaining traction, pipeline companies and midstream operators are increasingly looking to the South Texas play for opportunities to build new networks. Enterprise is poised to benefit from its existing assets and new developments, like the Texas Express Pipeline project, in providing packaged services to producers in emerging shale plays.

Enterprise Products Partners, a leading master limited partnership (MLP), is engaged in a wide range of midstream energy services to producers and consumers of natural gas, NGL and crude oil. With its diverse set of midstream infrastructure assets, we believe the partnership possesses fundamental strengths, which will in turn support distribution growth consistently.

The partnership currently holds a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, there are other Zacks Ranked #1 (Strong Buy) stocks – Susser Petroleum Partners LP (SUSP), and China Petroleum & Chemical Corp. (SNP) – that are expected to perform more impressively over the short term.

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