Enbridge Energy Partners LP
) has filed a plan with the Minnesota Public Utilities Commission
to increase capacity at its Alberta Clipper pipeline. The company
will spend $40 million to upgrade three pumping stations at Viking,
Clearbrook and Deer River to increase its overall capacity by 27%.
ENBRIDGE EGY PT (EEP): Free Stock Analysis
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In May, the company announced its plans to spend $600 million in
pipeline upgrades in the United States and Canada. The project was
undertaken to carry more oil from Hardisty, Alberta to terminals in
Wisconsin and Illinois.
Following the upgrade, the capacity of the pipeline will increase
to 570,000 barrels per day from 450,000 barrels per day. The
increased capacity will serve to meet North America's need for a
transportation pipeline to supply crude oil from the production
regions in North Dakota and Western Canada.
Through this high capacity pipeline, refineries in Chicago, Detroit
and Toledo, and Ohio will get more oil shipments. The upgrade will
not require the replacement of an existing buried pipeline. At the
time of the construction of the 1,000-mile Alberta Clipper three
years before, Enbridge installed a pipe of a bigger diameter for
Houston, Texas-based Enbridge Energy Partners LP, a master limited
partnership (MLP), is engaged in the gathering, processing and
transmission of natural gas and crude oil. The partnership is best
known for its ownership of the Lakehead System, one of the world's
longest petroleum pipeline systems.
Enbridge could be affected by a number of global macro issues,
which include sovereign debt risks, defaults on sovereign credits,
and changes in the U.S. monetary and fiscal as well as tax
policies. Additionally, an economic slowdown could impact the
demand and price of crude oil that in turn could hurt its margins
in its NGL, natural gas and other businesses. Intense competition
from MLPs such as
Kinder Morgan Energy Partners L.P.
Enterprise Products Partners L.P.
) is an added cause of concern.
Enbridge Energy has a Zacks #4 Rank (short-term Sell rating), with
an unchanged long-term Neutral recommendation.