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Enterprise to Start Binding Season

Zacks Equity Research

A leading master limited partnership (MLP), Enterprise Products Partners L.P. (EPD) announced the commencement of a binding open season for its associate Panola Pipeline Company, LLC.

The associate has proposed the expansion of the Carthage to Lufkin portion of its natural gas liquids (NGL) pipeline system. The binding open season is aimed at finding shipper backing for the proposed expansion.

A 181-mile long Panola Pipeline starts near Carthage in Panola County, Texas and supports the oil and gas production regions of Haynesville and Cotton Valley. The pipeline, which stretches to destination points at Mont Belvieu in Chambers County, Texas, facilitates shippers in gaining passage into the world’s largest NGL fractionation complex. The access extends to the amenities owned and operated by Enterprise.

The Panola expansion project, which banks on the shipper response to the open season, is intended to be designed in a manner so as to accommodate about 15,000 barrels per day of additional capacity.

Attaining the incremental capacity would require the fixing of pumps and associated equipment. The additional capacity would be available starting from mid-to-late second quarter 2013.

Enterprise Products Partners is engaged in providing a wide range of midstream energy services to the producers and consumers of natural gas, NGL and crude oil. The partnership’s asset portfolio after its merger with GulfTerra includes integrated natural gas and NGL transportation, fractionation, processing, storage, and import/export facilities in the U.S. In addition, it consists of a diversified portfolio of onshore and offshore energy infrastructure assets. The partnership’s NGL fractionation, pipelines, and storage facilities are located in Texas, Louisiana, and Mississippi.

Enterprise Products Partners, which recently entered into a 50/50 joint venture with Plains All American Pipeline, L.P. (PAA) for a crude oil pipeline in South Texas, holds a Zacks #2 Rank (short-term Buy rating). Longer term, we maintain our Neutral recommendation.

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