Yesterday, Energy Transfer Partners, L.P. (ETP) reported that it has completed the 160-mile Texas Independence Pipeline. The $485 million, 42-inch natural gas pipeline will cater to the fast-growing Bossier and Barnett Shale natural gas resource plays of east and north-central Texas. Energy Transfer is the largest transporter of natural gas out of these two prolific natural gas production basins.

The partnership operates the largest intrastate pipeline system in Texas, with nearly 8,000 miles of pipeline in the state. The new pipeline, which runs from Maypearl to Henderson, will expand Energy Transfer’s take away capacity in Texas by 1.1 billion cubic feet per day (Bcf/d). It connects the partnership’s existing central and north Texas infrastructure to its east Texas pipeline network. With the addition of compression, the pipeline capacity may be expanded to over 1.75 Bcf/d.

The natural gas and propane gas distributor also announced the completion of the Rulison expansion project in Colorado, which includes the 10-mile, 24-inch Rulison pipeline and the Holmes Mesa compressor station (with more than 9,000 horsepower in compression) in Garfield County, Colorado.

These initiatives will increase the capacity of Energy Transfer’s South Parachute-Rifle pipeline system. Additionally, the project will create a new opening for producers to access the Meeker processing plant at the White River Hub. To begin with, the Rulison pipeline will add more than 70 million cubic feet per day (MMcf/d) of capacity that can be expanded to over 200 MMcf/d at a later stage.

We view these developments as an integral part of Energy Transfer’s overall expansion efforts to increase the takeaway capacity of its pipeline systems nationwide.

Dallas-based Energy Transfer Partners L.P. is a master limited partnership owning and operating a diversified portfolio of energy assets. The partnership’s natural gas operations include miles of natural gas gathering and transportation pipelines, natural gas treating and processing assets located in Texas and Louisiana, and three natural gas storage facilities located in Texas.
We currently rate Energy Transfer units as Underperform.
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