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Enterprise Products Partners’ Growth Projects beyond 2Q15

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Key transactions

Enterprise Products Partners (EPD) completed the acquisition of EFS Midstream from Pioneer Natural Resources (PXD) and Reliance Industries in July 2015. The deal amount was $2.15 billion. The acquisition extends Enterprise Products’ assets in the Eagle Ford region. The company has long-term contracts supporting the acquisition.

The second key transaction was the sale of Enterprise Products’ offshore business to Genesis Energy (GEL) in July 2015. The deal amounted to ~$1.5 billion. According to Enterprise Products, the business didn’t fit well with its core focus. Enterprise Products forms 9.70% of the Alerian MLP ETF (AMLP).

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Growth projects

In April, Enterprise Products announced a joint venture to build a natural gas processing facility in the Delaware Basin. It plans to build an associated NGL (natural gas liquid) pipeline infrastructure to support development in the Basin. The project is supported by long-term agreements. The company believes that the Delaware Basin has great potential due to its location, access to markets, and producer base.

The above figure shows the geographical spread of Enterprise Products’ existing assets. Its other ongoing and announced projects are discussed below.

  • Enterprise Products announced plans to build a crude oil and condensate pipeline linking its Midland and Sealy storage facilities. The project provides producers with access to domestic and international markets. The project is supported by long-term agreements.
  • Enterprise Products is working on its Panola NGL pipeline expansion project. It’s a joint venture with Western Gas Partners (WES), DCP Midstream Partners (DPM), and MarkWest Energy (MWE). The project is expected to be operational in 1Q16.
  • Enterprise Products is close to completing its Rancho II pipeline. According to the company, the pipeline is strategic to its crude oil activities in the Eagle Ford, the Permian, and the Houston Ship Channel. It will act as a link to Enterprise Products’ distribution system in the Gulf Coast.
  • Enterprise Products is working on its PDH (propane dehydrogenation) plant at Mont Belvieu. It’s expected to be completed in 2H16. The project is fully backed by long-term contracts.
  • Enterprise Products’ ethane export facility in the Houston Ship Channel is scheduled to be operational by 2Q16. There’s an attractive export market for ethane, including Canada, Asia, and Europe. It’s important to note that 80% of the capacity is already backed by contracts. The company expects it to be fully contracted the time it becomes operational.
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