Enterprise Products Partners L.P. (EPD), Kinder Morgan Energy Partners LP (KMP): Why Investing in Natural Gas Should Pay off for These MLPs

As America embarks on its ever-evolving national energy solution, natural gas is becoming an increasing part of the equation, thanks to a glut of domestic supply. That means pipeline and storage facility operators such as Enterprise Products Partners L.P. (NYSE:EPD), Kinder Morgan Energy Partners LP (NYSE:KMP), and Energy Transfer Partners LP (NYSE:ETP) stand to benefit. This is due to the fact that these pipeline operators are making huge investments in natural gas, and the potential payoff should mean impressive returns for investors.

 Enterprise Products Partners L.P. (NYSE:EPD)

Natural gas means plenty of growth left in the pipeline
The U.S. Energy Information Administration noted that proved reserves of natural gas hit a record in 2011, of nearly 350 trillion cubic feet of supply.

In short, this means huge potential for the oil and gas Master Limited Partnerships that are lining up to take advantage of the American shale revolution.

A dividend darling continues to grow
Enterprise Products Partners L.P. (NYSE:EPD) is shifting heavily into natural gas in preparation, and in total, boasts over 50,000 miles of natural-gas and crude-oil pipelines. In addition, Enterprise Products Partners L.P. (NYSE:EPD) has immense storage facilities with 190 million barrels of natural-gas liquids, refined products and crude-oil storage capacity.

And, Enterprise Products Partners L.P. (NYSE:EPD) has several major projects lined up for 2014 to take advantage of the natural gas revolution. Its planned projects involving natural gas include an impressive 435-mile natural-gas pipeline running between Colorado and Texas.

Industry titan at work
Meanwhile, Kinder Morgan Energy Partners LP (NYSE:KMP) operates 75,000 miles of pipelines and 180 terminals, and the company’s recent strategic initiatives prove its vision for natural-gas production in the United States.

Kinder Morgan Energy Partners LP (NYSE:KMP) embarked on an impressive spending spree over the last couple of years designed to make a huge push into natural gas. First, the company purchased El Paso Pipeline Partners for $21 billion.At the time, Kinder Morgan CEO Richard Kinder called the deal a ‘once in a lifetime opportunity.’ And, it’s not hard to see why.

Despite the rush into domestic natural-gas production, many promising shale fields lacked the necessary pipeline capacity to transport the gas. This is where Kinder Morgan Energy Partners LP (NYSE:KMP) hopes to reap considerable rewards since El Paso’s assets are, for the most part, interstate natural gas pipelines.

To supplement its positioning in natural-gas transportation and storage, Kinder Morgan Energy Partners LP (NYSE:KMP) then purchased natural-gas pipeline operator Copano Energy for $3.2 billion earlier this year. While a much smaller transaction, the integration possibilities presented by Copano were clearly attractive to Kinder Morgan Energy Partners LP (NYSE:KMP). With Copano now under its belt, Kinder Morgan is well-positioned to pursue development in several key areas, including the Eagle Ford Shale and Barnett Shale in Texas.