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Enterprise's $5.3B Expansion Pipeline Supports Long-Term Outlook
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Key Takeaways
Enterprise expects global liquid hydrocarbons demand to rise by 1 MMBPD annually over five years.
EPD forecasts LPG demand growth of 300 thousand BPD annually from petrochemical and heating needs.
EPD's projects through 2027 aim to boost hydrocarbon transport, processing and export capacity.
Enterprise Products Partners L.P. (EPD - Free Report) operates an integrated midstream asset network for the transportation and storage of crude oil, natural gas, natural gas liquids (NGLs), petrochemicals and refined products. The partnership’s midstream assets connect suppliers from some of the largest basins in the United States, Canada and the Gulf of America to various domestic and international markets.
The partnership is expected to benefit from the rising global liquid hydrocarbons demand. EPD expects the demand for liquid hydrocarbons, primarily driven by petrochemical demand, to increase approximately 1 million barrels per day (MMBPD) annually over the next five years. NGLs and naphtha are expected to account for more than 50% of this growth. Additionally, the global demand for liquefied petroleum gas (LPG) is expected to remain strong, driven by petrochemical demand and heating needs in non-OECD countries. Enterprise has forecasted LPG demand to grow by 300 thousand BPD annually, absorbing a greater number of U.S. barrels.
This demand pull creates a favorable business opportunity for Enterprise to capitalize on. The partnership has major capital projects worth $5.3 billion under development, which are expected to be placed into service through 2026 and 2027. These growth projects are aligned with favorable energy market fundamentals, including rising global demand for hydrocarbon liquids and growing Permian Basin production of oil and natural gas.
The Neches River Terminal Phase 2, EHT LPG expansion, Bahia expansion and Permian processing projects increase EPD’s ability to gather, fractionate, transport and export hydrocarbons. This is expected to create sustained demand for EPD’s midstream services, thereby aiding its earnings and cash flows.
KMI and WMB to Benefit From Rising Energy Demand
Kinder Morgan Inc. (KMI - Free Report) is a leading midstream energy company that operates the largest natural-gas pipeline system in the United States. It has about 58,500 miles of major pipelines, 7,500 miles of gathering lines and more than 700 bcf of gas storage.
The Williams Companies, Inc. (WMB - Free Report) is another leading player in the midstream energy sector that operates a widespread pipeline system of more than 33,000 miles, including the Transco and Northwest Pipeline systems. These pipeline systems are among the largest natural gas transportation networks in the United States.
Rising energy demand in domestic and international markets is expected to support sustained demand for Kinder Morgan and Williams Companies’ midstream services.
EPD’s Price Performance, Valuation & Estimates
Enterprise’s units have jumped 22.6% over the past year compared with the 17.2% improvement of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 11.85X. This is above the broader industry average of 12.17X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2026 earnings has remained unchanged over the past seven days.
View the Zacks #1 Rank List
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Enterprise's $5.3B Expansion Pipeline Supports Long-Term Outlook
Key Takeaways
Enterprise Products Partners L.P. (EPD - Free Report) operates an integrated midstream asset network for the transportation and storage of crude oil, natural gas, natural gas liquids (NGLs), petrochemicals and refined products. The partnership’s midstream assets connect suppliers from some of the largest basins in the United States, Canada and the Gulf of America to various domestic and international markets.
The partnership is expected to benefit from the rising global liquid hydrocarbons demand. EPD expects the demand for liquid hydrocarbons, primarily driven by petrochemical demand, to increase approximately 1 million barrels per day (MMBPD) annually over the next five years. NGLs and naphtha are expected to account for more than 50% of this growth. Additionally, the global demand for liquefied petroleum gas (LPG) is expected to remain strong, driven by petrochemical demand and heating needs in non-OECD countries. Enterprise has forecasted LPG demand to grow by 300 thousand BPD annually, absorbing a greater number of U.S. barrels.
This demand pull creates a favorable business opportunity for Enterprise to capitalize on. The partnership has major capital projects worth $5.3 billion under development, which are expected to be placed into service through 2026 and 2027. These growth projects are aligned with favorable energy market fundamentals, including rising global demand for hydrocarbon liquids and growing Permian Basin production of oil and natural gas.
The Neches River Terminal Phase 2, EHT LPG expansion, Bahia expansion and Permian processing projects increase EPD’s ability to gather, fractionate, transport and export hydrocarbons. This is expected to create sustained demand for EPD’s midstream services, thereby aiding its earnings and cash flows.
KMI and WMB to Benefit From Rising Energy Demand
Kinder Morgan Inc. (KMI - Free Report) is a leading midstream energy company that operates the largest natural-gas pipeline system in the United States. It has about 58,500 miles of major pipelines, 7,500 miles of gathering lines and more than 700 bcf of gas storage.
The Williams Companies, Inc. (WMB - Free Report) is another leading player in the midstream energy sector that operates a widespread pipeline system of more than 33,000 miles, including the Transco and Northwest Pipeline systems. These pipeline systems are among the largest natural gas transportation networks in the United States.
Rising energy demand in domestic and international markets is expected to support sustained demand for Kinder Morgan and Williams Companies’ midstream services.
EPD’s Price Performance, Valuation & Estimates
Enterprise’s units have jumped 22.6% over the past year compared with the 17.2% improvement of the composite stocks belonging to the industry.
From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 11.85X. This is above the broader industry average of 12.17X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for EPD’s 2026 earnings has remained unchanged over the past seven days.
Image Source: Zacks Investment Research
EPD currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.