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MarkWest Updates on NGL Pipeline Repair

MWE SXL KMP

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Natural gas processor and distributor, MarkWest Energy Partners LP (MWE - Analyst Report) has issued an update about its natural gas liquids (NGLs) pipeline, located at Wetzel County, WV, which was seriously affected by a landslide last month.

MarkWest expects the pipeline, closed since the incident triggered by torrential rainfall and substantial soil erosion, to resume operations by the middle of Oct, 2013. The partnership pointed out that it has taken immediate measures to repair the affected portions of the pipeline

However, the incident has not affected any of the processing facilities of MarkWest Energy except Mobley and Sherwood. The Mobley facility will remain closed until the pipeline is online again, while the operations at the Sherwood complex have been reduced. For fractionation and selling purposes, MarkWest Energy is transporting NGL from the Sherwood facility using trucks.

Management is not expecting its financial report to get impacted owing to the pipeline incident.

Denver-based MarkWest Energy, a master limited partnership (MLP), is engaged in the gathering, processing and transmission of natural gas, transportation, fractionation and storage of NGLs, and the gathering and transportation of crude oil.

We like MarkWest Energy’s high-quality and diverse portfolio of midstream assets, which generate stable and recurring revenues from long-term fee-based contracts.

However, acquisitions have historically played a major role in the partnership’s growth profile and are expected to remain significant. MarkWest Energy may find it difficult to complete accretive transactions in the future, which could negatively impact its growth rate.

MarkWest Energy currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at oil and gas production pipeline MLPs like Kinder Morgan Energy Partners LP (KMP - Analyst Report), Pioneer Southwest Energy Partners LP and Sunoco Logistics Partners LP (SXL - Analyst Report) that offer better prospects. All the partnerships sport a Zacks Rank #2 (Buy).

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