Enbridge Inc. (ENB) announced that Canada's pipeline regulator, the National Energy Board (NEB) has approved the flow reversal and expansion of its Line 9B between Westover, Ontario and Montreal, Quebec. Combined with the previously approved project to reverse Line 9A between Sarnia, Ontario and Westover, this project will enable the delivery of North American crude oil to Ontario and Quebec based refineries.
The regulatory approval would bring a new, reliable supply of competitively priced crude oil for the local refineries. This would cushion almost 4,000 local jobs, sustain the petrochemical industry and strengthen the economy.
The reversal of Line 9B, a 639-kilometre section of Line 9 from Westover to Montreal, represents the second and final phase of Enbridge's Eastern Canadian Refinery Access Initiative. Earlier, the NEB had approved the reversal of Line 9A, a 246 km section between Sarnia and Westover on Jul 27, 2012. Enbridge completed the reversal in Aug 2013 and Line 9A is flowing in a west to east direction, supplying to Ontario's Nanticoke refinery.
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 currently carries a short-term Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Helmerich & Payne, Inc. (HP), Matrix Service Co. (MTRX) and Patterson-UTI Energy Inc. (PTEN). All these stocks hold a Zacks Rank #1 (Strong Buy).
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