EEP Brings Bakken Pipeline Online - Analyst Blog
March 05 2013 - 12:45PM
Zacks
Texas-based Enbridge Energy Partners LP (EEP)
and its project partner Enbridge Income Fund have completed their
Bakken crude pipeline expansion project, which forms a part of the
partnership's Bakken Expansion Program.
The partnership reversed and extended an existing pipeline,
beginning from Berthold, North Dakota, to Steelman, Saskatchewan.
Enbridge also constructed a new 16-inch pipeline from a new
terminal near Steelman to the Enbridge Pipelines Inc. mainline
terminal near Cromer, Manitoba.
The Enbridge project has added a capacity of about 145,000 barrels
per day (bpd) to the booming oil region around North Dakota, of
which 25,000 bpd was brought online during the first quarter of
2012. The project began operations as scheduled and was within the
budget.
Bakken production is likely to benefit from access to multiple
markets, upon its linking with the Enbridge mainline and its
connected pipeline systems. The project has already received firm
commitments of 100,000 bpd from anchor shippers.
Over the last five years, yield from the expansive Bakken formation
has increased considerably to more than 700,000 bpd from 200,000
bpd. The production is expected to touch 1,200,000 bpd in the next
six years.
The latest project represents the third expansion undertaken by the
partnership to meet the needs of Saskatchewan producers and
facilitate rising production from the Bakken region to access the
main U.S. markets.
The project is mainly underwritten by take-or-pay contracts and
signifies an additional source of attractive and stable
distributable cash flow for the Fund. Enbridge
Inc. (ENB) operates the Canadian pipeline and holds a 23%
stake in Enbridge Energy Partners and a 20% stake in the Enbridge
Income Fund.
Enbridge carries a Zacks Rank #3, which is equivalent to a
short-term Hold rating. However, there are other stocks in the oil
and gas sector – Enerplus Corporation (ERF) and
Range Resources Corporation (RRC) – which hold a
Zacks Rank #1 (Strong Buy) and are expected to perform better.
ENBRIDGE EGY PT (EEP): Free Stock Analysis Report
ENBRIDGE INC (ENB): Free Stock Analysis Report
ENERPLUS CORP (ERF): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
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