Enbridge (NYSE:ENB) and Enterprise Products Partners (NYSE:EPD) have been phenomenal dividend stocks over the years. Both pipeline giants have increased their payouts for more than 20 consecutive years. That's impressive given all the volatility in the oil and gas market, which has forced several of their peers to either press pause or reduce their dividends.

Both companies expect to keep increasing their dividends over the next few years. That's because they have strong financial profiles and excellent growth prospects, which they're working to enhance by teaming up on a key expansion project. As a result, they'll have even more fuel to keep growing their payouts in the coming years.

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Spotting an opportunity to work together

Enbridge and Enterprise Products Partners are among several companies working to build out the infrastructure needed to get America's surging excess oil supplies to global markets. Enbridge is developing the Texas COLT terminal, which would be an offshore port capable of fully loading Very Large Crude Carriers (VLCC) that can hold 2 million barrels of oil. Enterprise Products Partners, meanwhile, is working on the Sea Port Oil Terminal (SPOT), which is also an offshore port that can fully load VLCCs.

There are so many companies racing to build oil export facilities that the industry risks having too much capacity, which would negatively affect returns on investment. Several companies have already walked away from proposed developments, since they couldn't get enough customers to support their projects to justify the investment.

Enterprise Products Partners' SPOT project, however, is ahead of the pack because it secured long-term contracts with oil giant Chevron (NYSE:CVX) for a large portion of its capacity. While those agreements with Chevron have made the project appealing enough to approve, the company is working to further enhance SPOT's economics by teaming up with Enbridge.

The Canadian oil pipeline giant has signed a letter of intent to jointly develop SPOT with Enterprise Products Partners as long as the government gives them the permits needed to build the facility. In addition to helping finance construction, Enbridge will also help support the project's commercial efforts of securing additional contracts with customers. One way they're doing that is by working on expanding their jointly owned Seaway Pipeline by another 200,000 barrels per day. That would increase the flow of oil toward SPOT. These efforts should increase the utilization of SPOT so that the partners maximize their return on investment.

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What this partnership means to Enterprise

Enterprise's contracts with Chevron were already enough to support the development of SPOT. However, by bringing Enbridge on board, it will further enhance its economics. In addition, Enterprise will be able to offload some of the cost. That's important, since the company has $9.1 billion of other projects already under construction, giving it one of the largest backlogs among master limited partnerships. With Enbridge covering some of SPOT's costs, Enterprise will be able to continue funding its large backlog while maintaining its top-tier balance sheet and steady dividend growth. 

What this partnership means for Enbridge

Because it's joining forces with Enterprise on SPOT, Enbridge will press pause on the development of COLT for the time being. That will enable it to put all its efforts into ensuring the financial success of SPOT by enhancing its already attractive returns. Meanwhile, as the crude oil export market grows in the future, Enbridge can resume the development of COLT. That could potentially enable it to earn better returns on that project when there isn't so much competition.

Meanwhile, the partnership with Enterprise to develop SPOT also allowed Enbridge to advance the development of the Jones Creek Crude Oil Storage Terminal. This facility will be able to store 15 million barrels of oil. Crude will flow into it from Seaway and other pipelines, allowing it to support refineries in the Houston region as well as export facilities like SPOT.

The addition of these three expansion projects should more than offset the delay in Colt. As a result, Enbridge should remain on track with its long-term plan to grow its cash flow and dividend at a 5% to 7% annual rate after next year.

Adding to their appeal for income seekers

Enbridge and Enterprise Products Partners both offer investors attractive dividend yields of 5.7% and 6.7%, respectively. In addition, both boast excellent growth prospects, which they've enhanced by working together on SPOT. So they should have plenty of fuel to keep increasing their payouts, which makes them excellent stocks for investors seeking a steadily growing income stream.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.