Houston pipeline firm files for $500M IPO

HOUSTON — Houston pipeline operator Enable Midstream Partners filed Tuesday for a $500 million initial public offering, one of about a dozen midstream master limited partnerships to plan debuts on Wall Street this year.

The MLP, formed in May with $11 billion in gathering systems and pipeline assets spun out of Houston-based Centerpoint Energy, said it is planning to hit public markets in the first quarter. Its units will trade on the New York Stock Exchange under the ticker symbol “ENBL,” according to regulatory filings.

Executives for Centerpoint, an electricity and natural gas distributor, said earlier this month it acquired financial backing from ArcLight Capital partners to form Enable Midstream, and will split its management with OGE Energy Corp.

All told, the young firm owns 11,000 miles of gathering pipelines, 11 processing plants, eight storage facilities and more than 7,600 miles of interstate pipeline in the natural gas-heavy Anadarko Basin in Oklahoma, the Arkoma Basin in Arkansas and Ark-La-Tex Basin in East Texas and Louisiana.

The firm also fired up a crude gathering business in the Bakken Shale in North Dakota this month.

Increased demand for infrastructure linking newly tapped shale oil and gas plays to U.S. refineries has been a boon to the midstream sector in recent years, and Wall Street has taken notice. Fitting North American shale plays with the right infrastructure could be a $200 billion venture by 2035, according to a recent study by Deloitte.

There have been 12 midstream master limited partnership IPOs announced or completed this year, according to data from SNL Energy.

So far this year, investors have bet more than $5 billion on midstream master limited partnerships, tax-advantaged corporate structures that typically pay shareholders regular cash distributions larger than other companies.

That could be a windfall for average investors who have been on the hunt for high-yield assets in recent years,  when interest rates reached record lows, said Christopher Zook, chairman and chief investment officer for Houston-based CAZ Investments, which has a focus in midstream funding.

“People have gotten fed up with having virtually no income on short-term bonds,” Zook said. “For so many of the emerging basins, there’s simply a mismatch of capacity or none at all. There’s a lot more of these opportunities out there.”