Gas pipeline operator Ethane Pipeline Income Fund has delivered investors a strong quarterly distribution and a healthy yield

Clime Investment Management

Clime Investment Management

Gas pipeline operator Ethane Pipeline Income Fund has delivered investors a strong quarterly distribution and a healthy yield. But to earn that return investors took on risk. EPX has just one customer for its pipeline, which transports ethane gas from Moomba in South Australia's Cooper Basin to a petrochemical plant at Botany Bay in Sydney. Not surprisingly, the customer, Qenos, has called the shots. But EPX has struck a new agreement with Qenos that provides greater revenue certainty for the next five years and removes some of that previous risk. Earlier this month, EPX announced a new agreement. From the start of next calendar year, Qenos will pay EPX a fixed main charge of $20m per annum. EPX recently provided guidance that suggests investors will be paid distributions of at least 12.45c per security, about 80 per cent franked, in 2015. That payout level is expected to continue until the end of 2018. But based on the expected distribution, the yield is still a strong 7.9%, partly franked, which should be appealing to income investors. Read more (VIEW LINK)


Clime Investment Management
Funds Management & Stock Research
Clime Investment Management

The Clime Group is a respected and independent Australian Financial Services Company, which seeks to deliver excellent service and strong risk-adjusted total returns, closely aligned with the objectives of our clients.

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