Liquid Love - Integrated NGL Pipelines, Fractionators, Export Facilities Drive Enterprise's Growth

Midstream giant Enterprise Products Partners, with a market capitalization of $57 billion, has attracted significant investor interest because of its simplified structure, 51 consecutive quarters of dividend growth and strong distribution coverage — $2.7 billion in retained cash in the last three years. The company has continued to build out its large integrated midstream network despite the plunge in commodity prices, investing almost $18 billion in organic growth projects and acquisitions in 2014-16. Enterprise (NYSE: EPD) is now connected to every major U.S. shale basin, every U.S. ethylene cracker and 90% of the refineries east of the Rocky Mountains. As a result, it is well positioned to benefit from the recovery in crude oil and natural gas production, especially in the Permian and the Eagle Ford; continuing NGL and crude oil exports; and the impending growth of the U.S. petrochemical industry. Today we discuss highlights from the first part of our new Spotlight analysis of EPD, which focuses on the company’s NGL Pipelines & Services segment.

Spotlight is a joint venture of RBN Energy and East Daley Capital Advisors. With the support of Oil & Gas Financial Analytics, Spotlight provides deep dives into the fundamentals that shape the outlook for midstream energy companies. Spotlight should not be viewed as investment advice. Spotlight is included as part of our Drill Down Report series, which is available to RBN Backstage Pass members. For more about Spotlight, click here.

Enterprise Products Partners L.P. is a publicly traded midstream master limited partnership (MLP) that operates an integrated U.S. network of crude oil, natural gas, natural gas liquids (NGLs) and refined product midstream infrastructure. Its operations include pipelines, natural gas processing plants, liquid and gas storage, NGL fractionation, import and export terminals and marine transportation assets. In 2016, EPD generated $23 billion in revenue and $5.2 billion in earnings before interest, taxes, depreciation and amortization (EBITDA). EPD has four business segments:

  • NGL Pipelines & Services, which includes natural gas processing plants and related NGL marketing activities; nearly 20,000 miles of NGL pipelines; NGL and related product storage facilities; 15 NGL fractionators; and liquefied petroleum gas (LPG) and ethane export terminals and related operations.

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