El Paso Pipeline Partners L.P.EPB

Morningstar Rating

Stock Research and Analysis

by Catharina Milostan

El Paso Pipeline Partners' ability to grow despite a troubled economy in 2009 illustrates its many competitive advantages. A well-stocked portfolio of pipeline projects plus continued support from its parent company, El Paso EP, puts El Paso Pipeline Read more

Bulls Say

El Paso Pipeline Partners boosted ownership of CIG in 2009 to 58% from 40%, raising its share of cash-flow growth from pipeline projects, and throughput and revenue gains.

Pipeline projects at all three pipelines--WIC, CIG, and SNG--should help drive long-term revenue and equity earnings growth for the MLP.

El Paso Pipeline Partners' pipeline interests can generate steady cash-flow streams because more than 90% of pipeline capacity is subscribed under long-term contracts.

Pipelines enjoy economic moats, as new pipelines are expensive to build and must satisfy rigorous regulatory requirements for construction approval. Read more

Bears Say

El Paso Pipeline Partners may incur costly delays in pipeline projects caused by funding restrictions or lower demand for pipeline services, diminishing growth potential.

Depletion of gas fields, lower drilling activity or lower gas consumption in a weakened economy could lower demand for the partnership's pipeline transportation services.

Financial market constraints may limit El Paso Pipeline Partners' ability to raise debt or equity funding in the public market for expansion projects, requiring more parent company support.

Investors in El Paso Pipeline Partners are responsible for their share of the partnership's tax bill. This can decrease the net returns investors enjoy from holding partnership units, as well as increase tax-filing complexity. Read more

Strategy

El Paso Pipeline Partners seeks to maximize cash distributions to its unitholders by expanding pipeline capacity and other facilities to meet the industrywide need to transport and store more gas from Read more

Management

El Paso Pipeline Partners does not have any employees and is run by the general partner, with the same executives who run parent El Paso. Several other energy companies that spun off infrastructure assets into public partnerships share management, so Read more

Profile

El Paso Pipeline Partners is an El Paso, Texas-based master limited partnership that was formed by El Paso Corporation in 2007 with interests in interstate gas pipelines. Read more

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