Enterprise Products Partners L.P. EPD and Navigator Holdings Ltd. NVGS announced that they have commenced construction of the ethylene export terminal under a 50/50 joint venture.
The terminal, located at Enterprise’s Morgan’s Point, TX facility on the Houston Ship Channel, will have a capacity to export about 2.2 billion pounds of ethylene per year.
Additionally, refrigerated storage of ethylene is also being constructed on-site with a capacity of about 66 million pounds. This will provide the capability to load ethylene at rates of 2.2 million pounds per hour. The operations are projected to commence in the fourth quarter of 2019.
By 2021, domestic ethylene production is projected to reach 90 billion pounds per year. The new terminal will spur growth of domestic ethylene production by offering access to international markets. Enterprise Products and Navigator are constructing the new terminal, which will also boost supply diversification for growing markets like Asia that depend on cheaper U.S. feedstocks.
Enterprise Products is also developing a high-capacity ethylene salt dome storage facility at its complex in Mont Belvieu, TX. It is expected to commence operations in the second quarter of 2019. Post completion of this storage facility, it will have a capacity of about 600 million pounds with an injection/withdrawal rate of 420,000 pounds per hour. The facility will be equipped to allow connections to the eight ethylene pipelines within half a mile of the ethylene storage system.
Moreover, the partnership is building a new ethylene pipeline from Mont Belvieu to Bayport, which is estimated to come online in 2020. The section from Mont Belvieu to Morgan’s Point is projected to be commissioned in 2019 to support the export terminal.
Price Performance
In the past three months, Enterprise Products’ shares have gained 11.8% compared with the industry’s 1.1% rise.
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Zacks Rank & Key Picks
Enterprise currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Equinor ASA EQNR and CVR Refining, LP CVRR. These stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Equinor, based in Norway, is a major international integrated oil and gas company. It witnessed an average positive earnings surprise of 11.53% in the last four quarters.
Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.
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