2024-06-14 03:43:48 ET
Summary
- Enterprise Products is benefiting from the increasing oil and NGL production in the US, leading to higher demand and pricing for existing midstream capacity.
- NGL pipeline utilization rates are currently peaking but are expected to decline in 2025 as additional capacity enters the market, leading to more competitive pricing and reduced trading opportunities.
- EPD's profitability is likely to be capped in the medium term due to a more subdued pricing environment and reduction in price spreads.
Enterprise Products Partners ( EPD ) is the leading operator of NGL (ethane and propane) transportation and processing infrastructure strategically positioned between the Permian and the Gulf Coast.
The company, as well as the broader sector, has benefited as of late due to the increasing oil and NGL production in the US. The pipelines have a limited capacity which takes a while to expand and therefore sudden rise in volumes resulted in higher demand and pricing for existing capacity. Price spreads between different market points have also widened, opening up profitable trading and marketing opportunities....
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Enterprise Products: Battle For The Lucrative Permian NGL Market Is Heating Up