Back to top

Analyst Blog

Zacks Equity Research

Enterprise Products Enters JV

EPD PAA

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

A leading master limited partnership (MLP), Enterprise Products Partners, L.P. (EPD - Analyst Report) has entered into a 50/50 joint venture (JV) with Plains All American Pipeline, L.P. (PAA - Analyst Report) for a crude oil pipeline in South Texas.

Per the agreement, certain portions of the previously declared pipeline projects servicing the Eagle Ford shale play between the JV parties will be consolidated in South Texas. The joint venture is expected to optimize the companies’ capital investments and is supported by a commitment of 210,000 barrels per day (BPD) from shippers.

A 140-mile crude oil and condensate line − with a capacity of 350,000 BPD − from Gardendale in LaSalle County to Three Rivers in Live Oak County will form part of the JV. This will continue up to Corpus Christi, and join a new 35-mile pipeline segment from Three Rivers to Enterprise Products’ Lyssy station in Wilson County.

Enterprise Products’ South Texas Crude Oil Pipeline will interconnect the JV pipeline at Lyssy. Parts of the system is expected to be operative by the fourth quarter of 2012 and the balance will come online in first half of 2013. The initial base tariff rate will be $1.25 per barrel from Gardendale to all destinations.

Both the parties are of the view that this venture will reduce their capital costs associated with higher returns. It will also enhance the market accessibility to shippers.

Plains All American Pipeline, L.P., headquartered in Houston, Texas is an MLP engaged in the transportation, storage, and marketing of crude oil and refined products.

Enterprise Products is engaged in providing a wide range of midstream energy services to the producers and consumers of natural gas, natural gas liquids, and crude oil.

We continue to view Enterprise Products as a core holding in an MLP portfolio, given its string of organic growth projects, potential acquisitions, strong balance sheet and solid liquidity position.

Currently, Enterprise Products holds Zacks Rank of #3, which implies a short-term ‘Hold’ rating. We are also maintaining our long-term Neutral recommendation on   Enterprise Products.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%