Dallas, Texas 10/30/2013 (Financialstrend) – The $56 billion market capitalized Enterprise Products Partners L.P. (NYSE:EPD)has a huge market share in transporting the oil and gas output that American oil and gas manufactures are pumping out in a veritable oil boom in the U.S. main land. As per conservative estimates July 2013 outputs of oil and gas is 65% more than the 2010 production achieved by the U.S. based oil producers. In order to maximise its results and to further increase its share of the MLP business, the company in mid October announced that it has decided to expand its ethane shipping pipeline which goes by the name of Aegis. The pipeline management company has cited growing capacity of shipping companies which have forecasted their ability to ship close to 0.425 million barrels per day to the refineries being set up by petro majors on the Gulf cost. As per the proposed plan, Enterprise Products will set up a “270 mile” long pipeline which will commence at its Texas liquid storage facility. These new connections will link to existing Enterprise Products operated pipelines to finally connect with the “ethylene production facilities” based out of Louisiana and Texas. The project has an expected completion data of end of March 2014, with the first test deliveries taking place by April / May 2014 timeframe.
The new pipeline development plan has led to some big time ethane producers to either slow down or completely shelve their plans to set up new petrochemical plants in areas which are well connected by pipelines bringing in ethane from cheaper production facilities. One such example is Shell sitting on its proposed Pennsylvania ethane plant since three new pipeline projects have been announced to pipe out Pennsylvania produced ethane to gulf cost.
The stock of Enterprise Products Partners L.P. (NYSE:EPD) is trading at $62.98 per share as of close of business on October 29.