ETP: New Pipes Set to Produce

STEPHEN MARESCA, Morgan Stanley (09/16/2010)
"Contributions from pipeline projects should facilitate resumption of growth. FEP and Tiger pipelines will add $300M in annualized EBITDA (~20% growth) once placed in service. . .Contributions from these interstate natural gas projects will add stable, fee-based cash flow. We believe ETP is poised to raise its distribution in Q111 after FEP comes online.

[ETP has] solid cash flows and predictable growth, which underpin our stance on the stock; high-quality intra- and inter-state pipeline systems serving major nat gas basins; a robust organic growth profile comprised of low-risk, high-return projects supported by long-term contracts. . .Completion of FEP and Tiger projects on schedule and budget should add material cash flows, reduce leverage and shift ETP further into fee-based revenue sources."

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