ETP: Late Q410/2011 Boost

DARREN HOROWITZ, Raymond James (11/10/2010)
"Late Q410/2011 Boost: Tiger and Fayetteville Express (FEP) pipelines set to arrive under budget and ahead of schedule. The Tiger pipeline, which is a 175-mile, 42-in. pipeline (initial 2 Bcf/d of capacity, expandable to 2.4 Bcf/d) that will run through the Haynesville shale, is on track to be in service by 12/1/2010 (originally expected mid-2011). Moreover, it is expected to arrive 16% ($190 million) below the originally expected $1.2 billion budget, providing further confidence in our forecast for a 5–5.5x EBITDA multiple. Through leveraging economies of scale, improved cost management (fixed price contracts shift cost overruns to the contractors) and operational execution, the benefit of these projects will now be experienced to a greater magnitude, and sooner than expected."

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