Master limited partnerships (MLPs) play an increasing role in building necessary energy infrastructure for liquids-rich shale formations across the United States, including the Eagle Ford and Bakken, says Credit Suisse Managing Director Yves Siegel, CFA.
“Enterprise Products Partners (EPD) just had an analyst meeting, and they are investing $3.4 billion this year,” Siegel said. “ONEOK Partners (OKS) [is] spending around $2 billion building processing facilities, as well as pipeline facilities to both process the natural gas and transport the natural gas liquids.”
EPD is building pipeline, fractionation and processing facilities in the Eagle Ford shale in south Texas, Siegel says, and OKS is building processing and transportation infrastructure at the oil-rich Bakken shale in the Northeast.
“It’s not hard to see billions of dollars getting invested in a relatively short time frame to take care of all of the natural gas and crude and natural gas liquids that will be coming out of the ground because of the shale plays,” Siegel said.
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