Enterprise Products Partners L.P. (EPD) has received adequate transportation commitments to progress with the development of its 1,230-mile pipeline which extends from Appalachia to Texas, also known as ATEX Express. Enterprise has not revealed the cost of the project.
ATEX Express will have a capacity to carry up to 190,000 barrels per day (bpd) from the Appalachian production areas to the partnership’s storage and distribution assets in Texas.
The pipeline, which has its origin in Pennsylvania, involves the construction of a new transportation system extending to Cape Girardeau, Missouri, where Enterprise plans to reverse an existing 16-inch diameter pipeline and put it in ethane service.
Enterprise plans to construct a 55-mile pipeline at the southern end of the pipeline in order to provide shippers with access to its storage facility in Mont Belvieu, Texas that will offer indirect and direct access to U.S.ethylene plants.
This project is estimated to begin commercial operations in first quarter 2014 and in the process directly generate approximately 4,000 employments during and after construction. The shipper transportation rate will lie in the range of 14.5 cents to 15.5 cents per gallon.
Enterprise has undertaken various projects to take advantage of the increased production of natural gas liquids and their lower prices relative to oil-based alternatives. The company’s partnership with Enbridge Energy Partners L.P. (EEP) and Anadarko Petroleum Corporation (APC) – to build a new natural gas liquids pipeline called the Texas Express Pipeline is an initiative in this respect.
Further, the Haynesville Extension in the Acadian Gas system system – Enterprise Product Partners’ largest project worth $1.5 billion that began commercial operations in November 2011 – was $100 million under the original budget.
All these projects position Enterprise favorably. The company holds a Zacks #2 Rank, which is equivalent to a Buy rating for a period of one to three months. We maintain an Outperform rating on the stock for the long term.
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