DTE Energy to Boost Bluestone Capacity - Analyst Blog

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Detroit, MI-based DTE Energy Company ( DTE ) has struck a deal with two oil and gas energy biggies to expand the Bluestone Pipeline in Susquehanna County in northeastern Pennsylvania. Robust Marcellus reserves in Susquehanna County have driven the need for added infrastructure.

The company through its unit, Gas Storage and Pipeline, has signed an agreement with Marcellus Shale drillers Southwestern Energy Co. ( SWN ) and Cabot Oil & Gas Corp. ( COG ), to boost the Bluestone Pipeline capacity with minimum term commitments ranging from 10 to 15 years.

Marcellus Shale, located across New York, Pennsylvania, West Virginia, Ohio and Maryland, is rich in natural gas. As per the U.S. Energy Information Administration report, published in Jan 2014, natural gas production is expected to increase by 40% to 14 Bcfd in 2014 from the year-ago production of approximately 10 Bcfd, primarily due to a sharp rise in new well gas production per rig.

Now the 44.5 mile Bluestone Pipeline and Gathering system can ship up to 600,000 Dth/day. With this expansion, the facilities can transport up to 975,000 Dth/day. This marks a 60% boost in capacity after the gathering system first came online in late 2012. DTE Energy's Bluestone Gathering System delivers Marcellus Shale gas in Pennsylvania and New York to Millennium Pipeline and Tennessee Pipeline.

The company's significant investment in its non-utility businesses diversifies risk. The Gas Storage and Pipelines business is evaluating new pipeline and storage investment opportunities and is steadily working on its growth plan. The various projects in its portfolio include the Bluestone pipeline, Vector Pipeline, Millennium Pipeline, and Nexus Gas Transmission System.

DTE Energy is a holding company with subsidiaries engaged in regulated and unregulated energy businesses. Its Gas Storage and Pipelines division is engaged in natural gas pipelines, and gathering and storage businesses, through DTE Pipeline and DTE Gas Storage. This segment owns partnership interests in two interstate transmission pipelines and controls two natural gas storage fields. The pipeline and storage assets are primarily supported by long-term, fixed-price revenue contracts.

DTE Energy currently has a Zacks Rank #2 (Buy). Another well-placed stock in the energy space is Calpine Corp. ( CPN ) with a Zacks Rank #1 (Strong Buy).


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CABOT OIL & GAS (COG): Free Stock Analysis Report

CALPINE CORP (CPN): Free Stock Analysis Report

DTE ENERGY CO (DTE): Free Stock Analysis Report

SOUTHWESTRN ENE (SWN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: COG , CPN , DTE , SWN

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