An affiliate of Targa Resources Corp. TRGP has partnered with WhiteWater, MPLX LP MPLX and Enbridge Inc. ENB, through their WPC Joint Venture (JV), and reached a Final Investment Decision (FID) to move forward with the construction of the Traverse Pipeline. The FID was made after the partners successfully secured firm transportation agreements from investment-grade shippers.
With firm transportation commitments secured from investment-grade shippers, the Traverse Pipeline is anticipated to be a low-risk, high-visibility infrastructure investment. Its strategic route and multiple connectivity enhance its long-term value.
Investors can view this project as a strong combination of bettermarket reach, increased transport capacity and experienced operatorship, which can result in long-term value creation in the energy sector.
The Traverse Pipeline is a 160-mile, 36-inch bi-directional natural gas pipeline that will run between Agua Dulce, South Texas and the Katy area along the Gulf Coast. With a transportation capacity of up to 1.75 billion cubic feet per day (Bcf/d), the project is set to significantly improve natural gas flow along the Gulf Coast. The supply will be sourced from several key connections, including Whistler, Blackcomb and Matterhorn Express Pipelines. The construction of the Traverse Pipeline will boost access to several key markets, allowing shippers to access high-value markets and achieve greater efficiency.
The Traverse Pipeline will be owned by theBlackcomb Pipeline JV, with WPC holding70% interest, Targa Resources, currently carrying a Zacks Rank #3 (Hold),having 17.5% interest and MPLX holding 12.5% interest. MPLX’s holding is in addition to its ownership interest in the WPC JV, which deepens its involvement in regional midstream infrastructure. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
WhiteWater will lead the construction and operations of the Traverse Pipeline, which is expected to be in service by 2027, subject to regulatory and customary approvals.
The WPC JV is jointly held by WhiteWater, holding a 50.6% stake; MPLX, holding a 30.4% stake; and Enbridge, holding a 19% stake. WPC owns a strong asset base of critical infrastructure that transports natural gas from the Permian Basin to South Texas, linking directly to LNG export markets. The key assets held under the JV include Whistler Pipeline; Rio Bravo Pipeline; 70% ownership of Blackcomb Pipeline, Traverse Pipeline and ADCC Pipeline each; and 50% ownership of the Waha Gas Storage facility.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Enbridge Inc (ENB) : Free Stock Analysis Report
MPLX LP (MPLX) : Free Stock Analysis Report
Targa Resources, Inc. (TRGP) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.