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Dallas, Texas-based Energy Transfer Partners L.P. (ETP - Analyst Report) priced a public offering of 13,500,000 common units at $44.57 a piece, with a 30-day over-allotment option for an additional 2,025,000 units.

The transportation and storage master limited partnership (MLP) plans to use the net proceeds from this offering to pay back the outstanding debt under its revolving credit facility, to finance capital expenditures associated with pipeline construction projects and for general partnership purposes. The offering is expected to close on July 3, 2012.

Energy Transfer owns and operates a diversified portfolio of energy assets. It is engaged primarily in the gathering, processing, storage and transportation of natural gas.

Additionally, the partnership holds a 70% stake in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids (NGL) storage, fractionation and transportation assets in Texas, Louisiana and Mississippi.

Energy Transfer Partners, which competes with other large-cap pipeline MLP peers like Enterprise Products Partners L.P. (EPD - Analyst Report), Kinder Morgan Energy Partners L.P. (KMP - Analyst Report) and Plains All American Pipeline L.P. (PAA - Analyst Report), currently retains a Zacks #3 Rank (short-term Hold rating). We are also maintaining our long-term Neutral recommendation on the unit.

Energy Transfer Partners remains a premier MLP with strategically-positioned assets that serve major North American natural gas-producing basins. We like the partnership’s robust organic growth profile, stable fee-based operating income and strong liquidity position.

While the partnership kept its distribution unchanged, we expect growth to resume shortly, driven by the completion of a broad array of organic growth projects. Additionally, the proposed acquisition of Philadelphia-based refining and petroleum product marketing company Sunoco Inc. for $5.3 billion will help Energy Transfer to diversify its asset mix by adding crude and refined products pipelines to the partnership’s existing natural gas and NGL infrastructure.

However, we believe that the near- to medium-term outlook for the partnership’s natural gas gathering and processing business continues to be weak, which remains a major liability in our view.

As such, we expect the pipeline operator’s growth potential to be restrained with little room for meaningful upside from current levels.

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