We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ExxonMobil to Acquire 40% Stake in Enterprise's Bahia Pipeline Project
Read MoreHide Full Article
Key Takeaways
ExxonMobil will take a 40% interest in Enterprise's Bahia NGL pipeline, now in its commissioning phase.
XOM will cover its share of $650M in costs for the 600,000 bbl/d line linking key Permian basins.
EPD and ExxonMobil aim to lift capacity to 1M bbl/d with a 92-mile extension expected by late 2027.
Exxon Mobil Corporation (XOM - Free Report) , the integrated energy major, has entered into an agreement with Enterprise Products Partners (EPD) to acquire a 40% joint interest in the Bahia natural gas liquids (NGLs) pipeline. The pipeline, currently in the commissioning phase, is expected to begin commercial services shortly after the commissioning phase.
Under the terms of the agreement, ExxonMobil will contribute its proportional share of the pipeline project’s construction costs, totaling $650 million. The Bahia NGL pipeline, spanning 550 miles, will transport NGLs from the Midland and Delaware basins to EPD’s Mont Belvieu fractionation facility in Texas. Initially, the pipeline is expected to have a transportation capacity of 600,000 barrels per day (bbl/d) of NGLs. The transaction is expected to be concluded by early 2026.
Planned Expansion of the Bahia Pipeline
Enterprise and ExxonMobil intend to expand the transportation capacity of the Bahia pipeline to 1 million bbl/d after closing the deal. This expansion includes boosting pumping capacity along the line and constructing an extension from the main Bahia pipeline to ExxonMobil’s Cowboy natural gas processing plant in Eddy County, NM. This 92-mile extension shall also connect several processing facilities in the Delaware Basin owned by Enterprise. The expansion project is expected to be concluded in the fourth quarter of 2027.
Enterprise expects the natural gas and NGL mix from the Permian Basin to grow in the upcoming years. As such, the Bahia pipeline will play a crucial role in transporting the NGL production from the Permian to the fractionation complex in Mont Belvieu. According to an Enterprise spokesperson, the NGL production in the Permian is anticipated to rise more than 30% between 2024 and 2030. The expansion of the Bahia pipeline is expected to provide incremental transportation and processing capacity for the growing NGL volumes, allowing both XOM and EPD to benefit from the same.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The company boasts a diversified portfolio of crude oil, natural gas, bitumen and synthetic crude oil. It has delivered 25 consecutive years of dividend increases, one of the longest streaks among global oil producers.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ExxonMobil to Acquire 40% Stake in Enterprise's Bahia Pipeline Project
Key Takeaways
Exxon Mobil Corporation (XOM - Free Report) , the integrated energy major, has entered into an agreement with Enterprise Products Partners (EPD) to acquire a 40% joint interest in the Bahia natural gas liquids (NGLs) pipeline. The pipeline, currently in the commissioning phase, is expected to begin commercial services shortly after the commissioning phase.
Under the terms of the agreement, ExxonMobil will contribute its proportional share of the pipeline project’s construction costs, totaling $650 million. The Bahia NGL pipeline, spanning 550 miles, will transport NGLs from the Midland and Delaware basins to EPD’s Mont Belvieu fractionation facility in Texas. Initially, the pipeline is expected to have a transportation capacity of 600,000 barrels per day (bbl/d) of NGLs. The transaction is expected to be concluded by early 2026.
Planned Expansion of the Bahia Pipeline
Enterprise and ExxonMobil intend to expand the transportation capacity of the Bahia pipeline to 1 million bbl/d after closing the deal. This expansion includes boosting pumping capacity along the line and constructing an extension from the main Bahia pipeline to ExxonMobil’s Cowboy natural gas processing plant in Eddy County, NM. This 92-mile extension shall also connect several processing facilities in the Delaware Basin owned by Enterprise. The expansion project is expected to be concluded in the fourth quarter of 2027.
Rising Permian NGL Output Drives Midstream Investment
Enterprise expects the natural gas and NGL mix from the Permian Basin to grow in the upcoming years. As such, the Bahia pipeline will play a crucial role in transporting the NGL production from the Permian to the fractionation complex in Mont Belvieu. According to an Enterprise spokesperson, the NGL production in the Permian is anticipated to rise more than 30% between 2024 and 2030. The expansion of the Bahia pipeline is expected to provide incremental transportation and processing capacity for the growing NGL volumes, allowing both XOM and EPD to benefit from the same.
XOM’s Zacks Rank and Key Picks
XOM currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks from the energy sector are Oceaneering International (OII - Free Report) , Canadian Natural Resources Ltd. (CNQ - Free Report) and FuelCell Energy (FCEL - Free Report) . While Oceaneering and Canadian Natural Resources currently sport a Zacks Rank #1 (Strong Buy) each, FuelCell carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The company boasts a diversified portfolio of crude oil, natural gas, bitumen and synthetic crude oil. It has delivered 25 consecutive years of dividend increases, one of the longest streaks among global oil producers.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.