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Rising Permian Volumes and Expansions Support EPD's Growth Outlook
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Key Takeaways
EPD's Permian processing volumes rose 14% year over year to 4.3 Bcf/d in the second quarter.
New 300 MMcf/d plants in Delaware and Midland are slated for 2028 and 2029, expanding EPD's capacity.
EPD's integrated network should support higher utilization and stable cash flows as Permian output rises.
Enterprise Products Partners LP (EPD - Free Report) is a leading player in the midstream energy landscape and earns consistent fee-based income backed by long-term contracts, which supports stable earnings. EPD’s midstream business model reduces exposure to commodity price volatility, enabling the partnership to generate predictable cash flows. Demand for the partnership’s midstream services is expected to grow, driven by increased demand for U.S. hydrocarbons. In its latest earnings call, Enterprise noted that natural gas processing volumes have risen significantly, particularly in the Permian Basin.
In fact, Permian volumes increased 14% year over year to 4.3 billion cubic feet per day (Bcf/d) in the second quarter, reflecting continued growth in producer activity. To support the volume growth from the Permian Basin, EPD has announced several expansion projects. These include the Delaware Plant 13, which is expected to come online by the third quarter of 2028 with a processing capacity of 300 million cubic feet per day (MMcf/d).
The Midland Basin Plant 11, with a 300 MMcf/d processing capacity, is expected to be placed into service in the first quarter of 2029. The partnership has also approved Frac 15, a new fractionation facility in Mont Belvieu. These projects are expected to increase EPD’s processing and throughput capacity and generate long-term returns for the partnership. The increase in hydrocarbon production in the Permian Basin is anticipated to create sustained demand for EPD’s midstream services.
In addition, Enterprise’s midstream network, spanning from the wellhead to end markets, provides it with the flexibility to capture value at multiple stages across the energy value chain. Combined with rising production in the Permian Basin, its flexible, integrated asset network should support higher utilization across its processing, pipeline and fractionation infrastructure. These factors, along with the growing demand for U.S. energy, should help EPD maintain stable cash flows and support its long-term growth.
Other Midstream Players to Benefit From Rising Energy Demand
Kinder MorganInc. (KMI - Free Report) is a leading midstream energy company that owns and operates one of the largest energy infrastructure networks in North America, comprising approximately 78,000 miles of pipelines, 136 terminals and more than 700 billion cubic feet of natural gas storage capacity.
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 32,000 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 the midstream services of Kinder Morgan and Williams Companies.
EPD’s Price Performance, Valuation & Estimates
Enterprise Products units have jumped 29.2% over the past year compared with the 30.3% 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 11.10X. This is below the broader industry average of 11.34X.
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
Image: Bigstock
Rising Permian Volumes and Expansions Support EPD's Growth Outlook
Key Takeaways
Enterprise Products Partners LP (EPD - Free Report) is a leading player in the midstream energy landscape and earns consistent fee-based income backed by long-term contracts, which supports stable earnings. EPD’s midstream business model reduces exposure to commodity price volatility, enabling the partnership to generate predictable cash flows. Demand for the partnership’s midstream services is expected to grow, driven by increased demand for U.S. hydrocarbons. In its latest earnings call, Enterprise noted that natural gas processing volumes have risen significantly, particularly in the Permian Basin.
In fact, Permian volumes increased 14% year over year to 4.3 billion cubic feet per day (Bcf/d) in the second quarter, reflecting continued growth in producer activity. To support the volume growth from the Permian Basin, EPD has announced several expansion projects. These include the Delaware Plant 13, which is expected to come online by the third quarter of 2028 with a processing capacity of 300 million cubic feet per day (MMcf/d).
The Midland Basin Plant 11, with a 300 MMcf/d processing capacity, is expected to be placed into service in the first quarter of 2029. The partnership has also approved Frac 15, a new fractionation facility in Mont Belvieu. These projects are expected to increase EPD’s processing and throughput capacity and generate long-term returns for the partnership. The increase in hydrocarbon production in the Permian Basin is anticipated to create sustained demand for EPD’s midstream services.
In addition, Enterprise’s midstream network, spanning from the wellhead to end markets, provides it with the flexibility to capture value at multiple stages across the energy value chain. Combined with rising production in the Permian Basin, its flexible, integrated asset network should support higher utilization across its processing, pipeline and fractionation infrastructure. These factors, along with the growing demand for U.S. energy, should help EPD maintain stable cash flows and support its long-term growth.
Other Midstream Players to Benefit From Rising Energy Demand
Kinder Morgan Inc. (KMI - Free Report) is a leading midstream energy company that owns and operates one of the largest energy infrastructure networks in North America, comprising approximately 78,000 miles of pipelines, 136 terminals and more than 700 billion cubic feet of natural gas storage capacity.
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 32,000 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 the midstream services of Kinder Morgan and Williams Companies.
EPD’s Price Performance, Valuation & Estimates
Enterprise Products units have jumped 29.2% over the past year compared with the 30.3% 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 11.10X. This is below the broader industry average of 11.34X.
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, KMI and WMB currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.