Buckeye Partners, L.P. (BPL), Boardwalk Pipeline Partners, LP (BWP): Is Shale Gas Boom Fueling Demand for This Industry?

Strategic positioning of DCP

DCP Midstream Partners, LP (NYSE:DPM) engages in gathering, compressing, treating, transporting and selling natural gas in the United States. It also transports and sells propane and natural gas liquids (NGLs). The industry fundamentals for the company are attractive as it has operations in the most attractive basins of the United States, including Permian, Eagle Ford, DJ etc. The company is leveraging its expanding G&P footprint to extend its operations down the value chain by building NGL pipelines. End users of DCP include petrochemical crackers, ethane/propane exporters and refineries. These users belong to the rapidly expanding markets which will continue to provide growth for DCP in the coming future. Diversity in its customer base also allows the company to operate at a much lower risk than its peers. DCP has been showing some impressive financial results. The EBITDA of the company has been steadily increasing after its fall in the year 2009.

The takeaway

Recent trends in the oil and gas sector have made the oil and gas pipelines companies emerge as solid investment opportunities. The lower risk profile of these companies makes them attractive. All three companies analyzed above are positioned for growth.

Awais Iqbal has no position in any stocks mentioned. The Motley Fool recommends DCP Midstream Partners, LP. Awais is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Is Shale Gas Boom Fueling Demand for This Industry? originally appeared on Fool.com and is written by Awais Iqbal.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.