Can EPD's $6B Project Pipeline Drive Stronger Margins Ahead?

Enterprise Products Partners EPD is progressing on a major $6-billion portfolio of growth initiatives focused on bolstering its integrated midstream network and expanding U.S. hydrocarbon export capacity.

The Bahia Pipeline, a natural gas liquids (NGL) system with a capacity of 600,000 barrels per day, is a key element of this expansion. It will connect processing plants in the Delaware and Midland Basins to the Mont Belvieu fractionation hub and is scheduled to begin service in the fourth quarter of 2025. Complementing this, Fractionator 14 will add 150 MBPD of capacity at Mont Belvieu, which is also expected to come online by late 2025.

Export enhancements are other priorities. The Neches River Terminal in Texas will support ethane and propane exports, with Phase 1 now operational and Phase 2 scheduled for completion in the first half of 2026. Meanwhile, the Enterprise Hydrocarbons Terminal LPG Expansion is set to raise propane and butane loading capacity by 300 MBPD by the end of 2026.

EPD is also deepening its footprint in the Permian. The Athena Gas Processing Plant, scheduled for fourth-quarter 2026 in the Midland Basin, will lift total gas processing to 2.2 Bcf/d and NGL recovery to 310 MBPD. Further strengthening its integrated system, EPD recently acquired Occidental’s Midland Basin gathering assets and Pinon Midstream’s Delaware Basin sour gas treatment facilities.

Together, these projects expand EPD’s capacity across processing, fractionation and exports, cementing its position as the world’s largest independent LPG exporter.

Are KMI & MPLX Growing Through Their Pipeline Expansions?

Kinder Morgan KMI closed second-quarter 2025 with a $9.3-billion project backlog, nearly most of which (93%) is tied to natural gas infrastructure. Stripping out CO2 and gathering/processing ventures, $7.6 billion of projects are expected to deliver an average first full-year EBITDA multiple of 5.6X. The company also plans to keep annual capital spending steady at $2.3 billion.

MPLX LP MPLX is ramping up even faster, earmarking more than $5 billion in 2025 for growth, with close to 90% directed toward natural gas and NGL services. That includes $1.7 billion in organic expansion and $3.5 billion in bolt-on deals. Key targets are the Permian, Marcellus and Utica basins, which have been central to MPLX’s growth and export ambitions.

EPD’s Price Performance, Valuation & Estimates

EPD units have gained 10.2% over the past year, outpacing 5.5% growth of the composite stocks belonging to the industry.

From a valuation standpoint, EPD trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.23X. This is above the broader industry average of 5.03X.

The Zacks Consensus Estimate for EPD’s 2025 earnings has been revised downward over the past seven days.

EPD currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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