We have upgraded pipeline operator MarkWest Energy Partners LP (MWE) to Outperform from Neutral, reflecting its promising future prospects.
Denver, Colorado-based MarkWest Energy is a master limited partnership (“MLP”) engaged in the gathering, processing and transmission of natural gas, transportation, fractionation and storage of natural gas liquids (NGLs), and the gathering and transportation of crude oil.
MarkWest owns a high-quality and diverse portfolio of midstream assets that generate stable and recurring revenues by way of long-term fee-based contracts. Over the last few years, the partnership has consolidated its position in the midstream business, achieved through a combination of organic efforts and accretive acquisitions.
With its proven track record of supporting producers in the development of shale plays, MarkWest is in a great position to participate in the development of infrastructure that will be required for the development of the leaseholds.
Recently, MarkWest teamed up with another MLP, Sunoco Logistics Partners (SXL), to build a distribution system to transport ethane produced in the Marcellus Shale Basin (in the north eastern U.S.) to markets along the Gulf Coast. We believe that the initiative, known as the ‘Mariner Project’, offers several benefits. Not only will the project help MarkWest to profit from the direct opportunity of capturing demand for ethane takeaway capacity at Marcellus, but it will also support higher gathering system volumes and higher ethane production.
Additional positives in the MarkWest story include accelerating demand for natural gas liquids, an active hedging policy, and steady improvement in its liquidity and cash flow position.
As such, we view MarkWest units as an attractive investment and expect it to outperform the broader U.S. equity market over the long term.
Denver, Colorado-based MarkWest Energy is a master limited partnership (“MLP”) engaged in the gathering, processing and transmission of natural gas, transportation, fractionation and storage of natural gas liquids (NGLs), and the gathering and transportation of crude oil.
MarkWest owns a high-quality and diverse portfolio of midstream assets that generate stable and recurring revenues by way of long-term fee-based contracts. Over the last few years, the partnership has consolidated its position in the midstream business, achieved through a combination of organic efforts and accretive acquisitions.
With its proven track record of supporting producers in the development of shale plays, MarkWest is in a great position to participate in the development of infrastructure that will be required for the development of the leaseholds.
Recently, MarkWest teamed up with another MLP, Sunoco Logistics Partners (SXL), to build a distribution system to transport ethane produced in the Marcellus Shale Basin (in the north eastern U.S.) to markets along the Gulf Coast. We believe that the initiative, known as the ‘Mariner Project’, offers several benefits. Not only will the project help MarkWest to profit from the direct opportunity of capturing demand for ethane takeaway capacity at Marcellus, but it will also support higher gathering system volumes and higher ethane production.
Additional positives in the MarkWest story include accelerating demand for natural gas liquids, an active hedging policy, and steady improvement in its liquidity and cash flow position.
As such, we view MarkWest units as an attractive investment and expect it to outperform the broader U.S. equity market over the long term.
Read the full analyst report on “MWE”
Read the full analyst report on “SXL”
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