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Energy Transfer Completes Expansion of Lone Star Express

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Energy Transfer LP (ET - Free Report) announced the completion of its Lone Star Express Pipeline expansion project and added more than 400,000 barrels per day (bopd) of Natural Gas Liquids capacity to its existing operations in Texas.

The new 352-mile, 24-inch pipeline originating in Winkler County, TX was a major component of Energy Transfer’s 2020 capital program. The pipeline meets the existing Lone Star Express 30-inch pipeline at the Morgan Junction in Bosque County, TX and ultimately goes into the firm’s Mont Belvieu facility, which is an integrated liquids storage and fractionation site. The facility along the US Gulf Coast enjoys strategic connectivity to more than 35 petrochemical plants, refineries, fractionators and third-party pipelines.

Energy Transfer's seventh fractionator at Mont Belvieu came online earlier this year, bringing the partnership's total fractionation capacity to more than 900,000 bopd. New volumes of natural gas liquid transported from the new pipelines will be efficiently processed in the Mont Belvieu facility.

This pipeline extension will boost the shipping connectivity from the Permian and Delaware basins, further increasing production and job prospects in the region. It will provide shippers additional connectivity out of the Permian and Delaware basins, further encouraging the recovery of production and jobs underway in the region.

Cut in Capital Expenditures

Though this expansion project fitted into budget and was also ahead of schedule, Energy Transfer is curtailing its capital expenditures by taking into consideration the current economic condition and its impact on demand. The firm decided to lower 2020 capital guidance by 15% to $3.4 billion from $3.6 billion expected earlier. It anticipates capital expenditure for 2021 to be $1.3 billion, down 28% from the prior outlook.

Zacks Rank & Price Performance

Energy Transfer currently carries a Zacks Rank #4 (Sell).

In the past three months, units of the firm have lost 26.3% compared with the industry’s decline of 17.3%.

Key Picks

Some better-ranked stocks from the same industry are TC PipeLines, LP (TCP - Free Report) , PBF Logistics LP (PBFX - Free Report) and Delek Logistics Partners, L.P. (DKL - Free Report) , all three presently holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for TC PipeLines’ 2020 earnings has moved 4.2% north in the past 60 days. The firm delivered an earnings surprise of 19.34%, on average, in the last four quarters.

The Zacks Consensus Estimate for PBF Logistics’ current-year earnings has been revised 7.8% upward in the past 60 days. The firm delivered an earnings surprise of 13.91%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for Delek Logistics Partners’ 2020 earnings has moved 33% north in the past 60 days. The firm delivered an earnings surprise of 11.01%, on average, in the preceding four quarters.

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