) announced that it has entered into an agreement to construct
facilities and provide transportation services for the
Hangingstone Oil Sands Project in Canada. The initial term of the
transportation agreement is 20 years. Oil sands extraction
company, Japan Canada Oil Sands Limited (JACOS) is the operator
of the Hangingstone Oil Sands Project. However, the project is
jointly owned by JACOS and Chinese offshore giant
CNOOC LTD ADR (CEO): Free Stock Analysis
ENBRIDGE INC (ENB): Free Stock Analysis
OILTANKING PTNR (OILT): Free Stock Analysis
PEMBINA PIPELN (PBA): Free Stock Analysis
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Per the agreement, Enbridge will construct a 50-km pipeline with
a capacity to transport 40,000 barrels per day (bpd) of diluted
bitumen produced at the Hangingstone Project to the Enbridge
terminal in Cheecham, Alberta. The project is expected to be
operational in early 2016, with initial volumes of 18,000 bpd.
However regulatory approval for the project is pending.
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.
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 carries 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
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 and the potential to rise significantly
from the current levels.