A unit of
Kinder Morgan Energy Partners, L.P.
), Tennessee Gas Pipeline Company (TGP), has inked a binding,
15-year firm transportation precedent agreement with Seneca
Resources Corporation, a wholly owned exploration and production
National Fuel Gas Company
). The deal is valued at $29 billion.
The agreement entails transportation of 158,000 dekatherms per
day of natural gas to the eastern markets on the Niagara
Expansion Project. The project is scheduled to be commissioned in
Nov 1, 2015, subject to regulatory approvals.
Seneca will remain the foundation shipper for TGP's Niagara
Expansion Project that is designed to serve the emerging markets
of eastern Canada. The project also intends to provide
transportation from the prolific Marcellus Shale in Pennsylvania
to TGP's interconnect with TransCanada Pipeline in Niagara
Kinder Morgan's unit also provides for the expansion of the
capacity through a combination of existing capacity, pipeline
looping, compressor station alterations and off-system capacity
on the interstate pipeline system of National Fuel Gas Supply
Corporation, also a wholly owned subsidiary of National Fuel.
TGP commissioned its Northeast Supply Diversification Project in
Nov 2012. The project began exporting natural gas to Canada.
These projects secure TGP's position as a leader of pipelines in
the Northeast as well as assist the company in boosting its
transportation capacity between Marcellus and eastern Canada
The project connects major shale supply areas from the Marcellus
to serve the rising supply needs of eastern Canada. It thus
places TGP at an advantageous position.
Kinder Morgan is one of the largest publicly traded master
limited partnerships (MLPs) and generally serves as a benchmark
for the pipeline MLP group. A focus on fee-based and diversified
businesses has enabled the partnership to spread its business
risks. In addition, the CO2 business is a major growth avenue for
the partnership with the commodity price risk being offset by a
long-term hedging strategy.
Kinder Morgan Energy Partners carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the oil and gas sector include
Abraxas Petroleum Corp.
). All these stocks hold a Zacks Rank #1 (Strong Buy).
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
KINDER MORG ENG (KMP): Free Stock Analysis
NATL FUEL GAS (NFG): Free Stock Analysis
TESCO CORP (TESO): Free Stock Analysis Report
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