Enterprise Rejects ‘Anything That Moves’ Growth Promises

Enterprise Products Partners LP, which has taken heat for its growth prospects, may just be a little more realistic than its pipeline competitors, Chief Executive Officer Mike Creel said.

Unlike other companies that “seem to add projects to their backlog as soon as they start thinking about them, we only disclose backlog numbers for projects that actually have contracts to support them,” Creel told analysts on a conference call to discuss earnings today. “Anything that moves, they’ll throw in the backlog and call it a big number,” Creel said, without naming names.

Enterprise ships natural gas, oil and other fuels across a 51,000-mile (82,000-kilometer) pipeline network. It’s planning about $6 billion in expansions through 2016 in response to rising U.S. production, the Houston-based company said today. While that’s helped make Enterprise the biggest pipeline operator by market value, the projects fall short of rivals such as Kinder Morgan Inc., which disclosed a $17 billion backlog earlier this month.

Beyond Enterprise’s current projects, “there is little on the horizon” beyond 2016, analysts at investment bank Tudor Pickering Holt & Co. said in a note to clients today. “Without increased long-term growth prospects, we think investors start to rotate into higher-yield names with deeper backlogs.”

Creel defended the company on the conference call, saying Enterprise is considering “a number” of additional projects that it’s not ready to disclose. “We believe the best is yet to come.”

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