Energy Transfer Partners L.P. (ETP) has started construction of the Tiger Pipeline. This is a 175-mile, 42-inch interstate natural gas pipeline, which originates in Panola County, Texas, and terminates in Richland Parish, Louisiana. It will interconnect seven interstate pipelines and one intrastate pipeline for ultimate delivery to markets across the Northeast, Southeast, Mid-Atlantic and Midwest.
 
The Tiger Pipeline is expected to come online in the first quarter of 2011 with an initial transporting capacity of 2 billion cubic feet per day (Bcf/d).) However, the capacity will be increased to 2.4 Bcf/d ultimately following a planned expansion project, which is subject to FERC (The Federal Energy Regulatory Commission) approval. The expansion project is expected to be in service in the last half of 2011.
 
The full capacity of the pipeline has already been sold out under long-term contracts ranging from 10 to 15 years. The Tiger Pipeline will benefit Energy Transfer’s unitholders as it will provide significant distributable cash flow in 2011 and the subsequent years.
 
Energy Transfer is ideally positioned to benefit from an increasing production from unconventional sources of natural gas. With the largest intrastate system in Texas and expanding interstate assets, the partnership is connected to nearly every natural gas shale play in North America, including the Haynesville, Fayetteville and Barnett shales.
 
We like Energy Transfer’s robust organic growth profile, stable fee-based operating income and strong liquidity position. While the partnership has kept its distribution unchanged, we expect a distribution growth of around 5% this year, driven by the completion of a broad array of organic growth projects.
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