Energy Transfer Partners L.P. (ETP: 45.806 +0.156 +0.34%) took a further step toward the construction of Tiger Pipeline Expansion Project, Phase I (Tiger Expansion). The partnership had recently filed an application with the Federal Energy Regulatory Commission (FERC) requesting a certificate of public convenience and necessity that would authorize constructionand operation of the project. The construction of the project commenced earlier this month.
The expansion project includes a 42-inch diameter loop which will connect Energy Transfer’s existing pipeline system near Carthage, Texas, extend through the Haynesville Shale, and end near Delhi, Louisiana, interconnecting to at least seven interstate pipelines at different locations in Louisiana. The project is estimated to cost
roughly $1 - $1.2 billion.
roughly $1 - $1.2 billion.
Energy Transfer expects the Tiger Expansion to begin service by the first quarter of 2011 with an initial capacity of 2 billion cubic feet per day (Bcf/d) that may increase up to 2.4 Bcf/d by the second half of the year. The partnership has entered into long-term firm transportation pacts ranging from 10 - 15 years with natural gas players Chesapeake Energy Corp. (CHK: 24.62 -0.26 -1.05%) and EnCana Corp. (ECA: 34.56 -0.17 -0.49%), for 100% of the pipeline capacity.
Dallas, Texas-based Energy Transfer Partners is a master limited partnership engaged primarily in two businesses: 1) the gathering, processing, storage and transportation of natural gas, and 2) the distribution of propane.
We prefer the partnership’s robust organic growth profile, stable fee-based operating income and strong liquidity position. Energy Transfer is well positioned to compete in the natural gas midstream and transportation & storage businesses with its geographically-dispersed asset mix. The partnership has a significant market presence in each of its operating areas, which are located in major natural gas-producing regions of the U.S.
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