MPLX LP (MPLX - Free Report) , WhiteWater Midstream and a joint venture between Stonepeak Infrastructure Partners and West Texas Gas recently made a final investment decision (FID) to move forward with the construction of Whistler Pipeline. Substantial commercial commitments from the shippers provided the pipeline operators the much-needed impetus to move forward with the project.
The 42-inch pipeline, which has a transportation capacity of two billion cubic feet of natural gas per day, will move the gas from Waha Hub in the Permian Basin to Agua Dulce Hub of South Texas. MPLX, the logistic arm of Marathon Petroleum Corporation (MPC - Free Report) and WhiteWater, expects the remaining capacity of the pipeline to be fully subscribed in the coming months. Post customary and regulatory approvals, the pipeline is expected to become functional in the third quarter of 2021.
MPLX is well positioned to capitalize on the growing demand for fresh midstream assets like pipeline networks, and processing and fractionation units, in order to support increasing volumes of crude oil, natural gas and NGLs in the prolific shale plays in the United States.
To capitalize on the pipeline bottleneck in the Permian, MPLX has various pipeline projects underway, which are likely to poise the firm well for strong distributable cash flows in the future.
As we know, MPLX in partnership with other MLPs is constructing the 600-mile Permian Gulf Coast Pipeline (PGP) pipeline that will transport oil to the Gulf Coast from Permian and is likely to be operational by 2020. The partnership is also constructing fractionation and processing plants in Marcellus & Utica shale plays, wherein the partnership has already been established as the largest processor and fractionator.
Among several growth projects, the notable ones are Sherwood 12 Processing Plant and Sherwood C2 Fractionation in the Marcellus. Sherwood 12 Plant has the capacity to process natural gas at a rate of 200 million cubic feet per day (MMcf/D). Moreover, the partnership expects the Sherwood C2 Fractionation unit to start operations by third quarter 2019. By 2019-end, the partnership plans to add six plants, with around 800 million cubic feet per day of processing capacity and 100,000 BPD of fractionation capacity. This will further boost the partnership's earnings capabilities.
Zacks Rank and Key Picks
MPLX currently carries a Zacks Rank #3 (Hold). Investors interested in the same industry can consider better-ranked players like Enbridge Inc (ENB - Free Report) and Plains Group Holdings, L.P. (PAGP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Enbridge delivered average positive earnings surprise of 18.46% in the preceding four quarters.
Plains Group surpassed earnings estimates in three out of four trailing quarters, with average beat of 62.68%.
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