Enterprise Products Partners LP (EPD) has commenced operations at its fifth natural gas liquids (NGL) fractionator in its Mont Belvieu, Texas complex, east of Houston.
Production at the fractionator exceeded the unit’s estimated 75,000 barrels per day (bpd) nameplate capacity. With the commissioning of this new unit the total nameplate capacity at Enterprise’s Mont Belvieu complex has increased to over 380,000 bpd.
The new unit provides fractionation capacity for mounting NGL production from U.S.shale plays, including the Eagle Ford and other basins in the Rocky Mountain and Midcontinent region.
Enterprise is hopeful of seeing demand growth for NGL, particularly ethane. Further, with petrochemical companies planning more conversions, growth and new construction, and gas producers making new discoveries of shale plays with NGL rich reserves, ethane consumption will also increase in due course. As a result, Enterprise has started building a sixth fractionator at Mont Belvieu with a nameplate capacity of 75,000 bpd.
Once the sixth unit at Enterprise’s Mont Belvieu complex comes online, total NGL fractionation nameplate capacity is expected to be more than 450,000 bpd. The sixth fractionator is estimated to come online when it is fully contracted in early 2013.
With new capacity coming up in mid-2012, Enterprise will be able to process mixed NGLs at its Mont Belvieu complex. Currently the additional capacity as well as incremental volumes from the partnership’s new Yoakum gas processing plant in Lavaca County, Texas is being diverted to Louisiana.
For the long term, we maintain a Neutral rating on the stock. Kinder Morgan Energy Partners LP (KMP) and Energy Transfer Partners LP (ETP) are its major competitors.
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