On Nov 28, midstream service supplier and pipeline operator,
Pembina Pipeline Corporation
), revealed its plan to invest roughly C$1.5 billion capital in
2014. This target spending - the largest for the company to date
- marks a 56% hike over this year's budget.
Pembina expects to allocate C$670.0 million towards Conventional
Pipelines operations in 2014. C$510.0 million is likely to be
invested for midstream activities. While C$260.0 million will be
entrusted to the Gas Services business, the remaining C$60.0
million will be allocated to the Oil Sands & Heavy Oil
Of the amount due for Conventional Pipelines activities, C$240.0
million will be assigned to the previously announced second phase
of the Peace and Northern natural gas liquids (NGL) Pipeline
Systems project. The investment is meant to increase the capacity
of the pipeline system by 53,000 barrels per day (bpd) by the
middle of 2015. Pembina added that another C$215.0 million from
the portion assigned is likely to be invested for the completion
of the second phase of Low Vapour Pressure Expansion project,
also declared earlier. This spending should boost Peace
Pipeline's crude oil and condensate capacity by 55,000 bpd in the
latter part of 2014.
Pembina also plans to divide the capital budget planned for
midstream business in 2014. While C$145.0 million will be spent
for the improvement of infrastructure and service offerings of
the company's crude oil Midstream operations, the rest C$365.0
million is to be allocated for manufacturing the previously
declared RFS (Redwater Fractionator and Storage) II.
The news was out in the press release of Pembina last Thursday.
The stock opened at $32.12 per share the next day, reflecting a
nominal change from the Nov 27 closing price of $32.16 per
Calgary-based Pembina presently 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 one to three months.
Meanwhile, some better-ranked players in the oil production and
pipeline sector include
Western Gas Partners LP
EQT Midstream Partners LP
Spectra Energy Corp.
). While Western Gas Partners sports a Zacks Rank #1 (Strong
Buy), EQT Midstream Partners and Spectra Energy hold a Zacks Rank
EQT MIDSTRM PTR (EQM): Free Stock Analysis
PEMBINA PIPELN (PBA): Free Stock Analysis
SPECTRA ENERGY (SE): Free Stock Analysis
WESTERN GAS PTR (WES): Free Stock Analysis
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