Canadian pipeline operator,
), has affirmed that the northern segment of the Athabasca
Pipeline (Line 19) between Fort McMurray and Cheecham is back in
operation. The pipeline, which runs between Fort McMurray and
Cheecham Terminal, was shut down owing to significant release
from the nearby Line 37 pipeline.
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On Jun 22, Enbridge's leak detection system identified a release
from Line 37 pipeline, which connects facilities in the Long Lake
area to Enbridge's Terminal in Cheecham, Alberta. The company
believes that the leakage was mainly due to ground movement
caused by torrential rainfall in north Alberta. Consequently, for
precautionary measures, Enbridge closed all the pipelines in the
area, including Line 19.
Enbridge will conduct further examinations on the Line 37
incident area to safely resume operations of the other lines in
the affected region. Moreover, the company has been bearing a
cost of $1 million per day, owing to the shutdown of all the
pipelines adjacent to Line 37.
The Athabasca Pipeline transports crude oil from various oil
sands projects to the mainline hub at Hardisty, Alberta. The
Waupisoo Pipeline system carries Alberta oil sands crude from
Enbridge Athabasca's Cheecham Terminal, south of the Enbridge
Pipelines Inc. Edmonton Terminal.
Canada-based Enbridge Inc. is a leading energy transportation and
distribution company. As a transporter of energy, Enbridge
operates, the world's longest crude oil and liquids pipeline
system in Canada and the United States. The company is also
involved in natural gas transmission and midstream businesses in
other countries. As a distributor of energy, Enbridge owns and
operates Canada's largest natural gas distribution company. It
provides distribution services in Ontario, Quebec, New Brunswick
and New York State.
However, we remain apprehensive about the company's midstream
natural gas business, which is sensitive to changes in natural
gas supply-demand fundamentals and commodity cycles associated
with gas processing margins.
Enbridge currently retains a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next 1 to 3 months.
Meanwhile, one can look at
Cheniere Energy Partners LP
Oiltanking Partners LP
Pembina Pipeline Corporation
) as good buying options. These oil production and pipeline
operators - sporting a Zacks Rank #1 (Strong Buy) - have solid
secular growth stories with the potential to rise significantly
from the current levels.