Enterprise Products Partners L.P.’s (EPD) share price rose by 0.6% on the announcement that the partnership is commencing a binding open commitment period to evaluate shipper demand for capacity on a proposed new pipeline.
The new 30-inch diameter pipeline will originate from the Williston Basin of North Dakota and also serve the Powder River and Denver-Julesburg (“DJ”) Basins. The pipeline is likely to extend about 1,200 miles to the Cushing hub in Oklahoma. It is expected to have an initial capacity of about 340,000 barrels per day (bpd) of crude oil, which can rise to over 700,000 bpd.
The Bakken-to-Cushing pipeline will have the potential to carry about six grades of crude oil and products, comprising Rockies Condensate and Processed Condensate. The pipeline is expected to start serving in stages, subject to adequate customer commitments. The DJ-to-Cushing portion is likely to begin operations in the fourth quarter of 2016 and is projected to be completely functional by the third quarter of 2017.
The pipeline will provide consistent and efficient solutions, ensuring continued development of some of the nation’s actively producing areas. This will consequently reduce the need for importing crude oil.
The Bakken-to-Cushing pipeline will provide transportation assurance and options to choose market, by taking the advantage of its present midstream network. At Cushing, shippers will have entry to one of the most liquid crude oil trading hubs in the world and a widespread network of storage and pipelines supplying to the U.S. Gulf Coast refining complex and waterborne transportation options.
At present, Enterprise Products Partners carries a Zacks Rank #3 (Neutral). Some better-ranked stocks in the same industry include PetroChina Co. Ltd (PTR), Valero Energy Partners LP (VLP) and Sunoco Logistics Partners L.P (SXL). All of these stocks sport a Zacks Rank #1 (Strong Buy).
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