Morningstar | Enterprise Products Partners Looks Set for Another Record-Breaking Year
While many other midstream operators are playing checkers, Enterprise Products Partners is a chess master. It is the pre-eminent midstream infrastructure company, vertically integrated with best-in-class assets at nearly every point in the midstream value chain. It can aggregate supply of every type of hydrocarbon from multiple sources in major producing basins (Permian, Eagle Ford, DJ, Piceance, Green River) and deliver it to multiple end markets (refiners, petrochemicals, exports). These assets are the linchpins for both shippers and end users. The firm has built out a dominant position in natural gas liquids. Its Houston Ship Channel and Beaumont Terminal and its Mont Belvieu assets (NGL fractionation, storage, pipelines) means it will be the primary beneficiary as U.S. NGL exports increase in the coming years. We view the forthcoming NGL demand-pull toward the Gulf Coast as the key growth driver for Enterprise. From its vast NGL system, Enterprise's connection with every ethylene cracker on the Gulf Coast, its sold-out PDH splitter, and the upgraded isobutylene unit make it adept at converting low-cost NGLs into higher value-added olefins. Enterprise is operating in one of the best environments in recent memory. Enterprise, like NGL peer, Oneok, is benefiting from a blowout in differentials between Conway, Kansas, and Mont Belvieu, Texas. The major reason for the blowout is a shortage of fractionation capacity at Mont Belvieu to handle the growing volumes of natural gas liquids being produced in the Permian, the Rockies, and SCOOP/STACK among other areas. In short, shippers faced with fractionation constraints at Mont Belvieu are increasingly fractionating NGLs at Conway, Kansas, then facing pipeline constraints transporting the purity products to Texas. To some extent, these issues are being made worse with the Mariner East II pipeline being delayed, which has caused additional propane to be railed to Conway from the Marcellus. We expect it may take until early 2020 to fully address these constraints. Enterprise benefits from this situation via higher marketing profits, by adding fractionation capacity, and higher pipeline volumes.Enterprise Products Partners is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products. The company's midstream energy operations include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and export and import terminals; crude oil gathering, transportation, storage, and export and import terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services; and a marine transportation business that operates primarily on the U.S. inland and Intracoastal Waterway systems.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.