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Energy Transfer Partners Merged with Sunoco Logistics: Now What?

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Part 5
Energy Transfer Partners Merged with Sunoco Logistics: Now What? PART 5 OF 9

Energy Transfer Partners Remains Bullish on Permian Growth

Permian expansion

Energy Transfer Partners (ETP) is bullish on Permian expansion due to the announcement of the new processing plant and open season for the Permian Express 3 pipeline in the region. For more details, refer to the previous part of the series.

Regarding analysts’ questions about Energy Transfer Partners’ expansion opportunities in the Permian region over the next two to three years, Mackie McCrea, Energy Transfer Partners’ COO, said, “By far, that most active area certainly for our partnership and for many in the country, we just brought on, of course Panther is ramping up our Panther cryo. We have recently announced our Rebel II cryo, which will be on about this time next year. Arrowhead will be on about two months or three months, another cryo out in the Delaware Basin – Southern Delaware Basin. And we will be surprised if we weren’t bringing another 200,000 a day cryo on every six months to nine months to the next probably 2 years or 3 years.” “Cryo” refers to the cryogenic natural gas processing plant.

Energy Transfer Partners Remains Bullish on Permian Growth

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Why the Permian?

Energy Transfer Partners and other midstream MLPs including DCP Midstream (DCP), Plains All American Pipeline (PAA), Western Gas Partners (WES), and EnLink Midstream Partners (ENLK), are bullish on Permian expansion due to strong drilling activity in the region. According to recent rig data by Baker Hughes (BHI), the rig count in the Permian region rose to 357 for the week ending May 12, 2017—compared to 264 at the beginning of 2017. Goldman Sachs expects the Permian region to experience a crude oil production compound annual growth rate of 21.0% in the next three years.

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