Enbridge Energy Partners LP EEP declared that it intends to expand its Flanagan South and joint-venture Seaway pipeline systems. The company’s share price has, however, been trending downward post-announcement and has shown a 1.4% fall.
Post expansion, the pipelines will be able to carry additional Canadian heavy crude to the U.S. Gulf Coast. Currently, the Flanagan South pipeline, which runs from Illinois to Oklahoma, has a capacity of 600,000 barrel per day (bpd). On the other hand, the new Oklahoma-to-Texas Seaway Twin, which was commissioned in December last year, has a capacity of 450,000 bpd. The expansion is likely to boost the capacity of both these pipelines by another 200,000 bpd. This will be possible since both the systems have built-in expansion capabilities.
The Seaway Twin pipeline is operated by Enterprise Products Partners LP EPD with an interest of 50%, while the remaining 50% is held by Enbridge.
Enbridge Energy Partners, a master limited partnership, 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 longest petroleum pipeline systems in the world. This system is the U.S. portion of the main artery for the delivery of crude oil supply from Western Canada to refining centers in the Upper Midwest of the U.S. and Ontario in Canada.
A focus on fee-based and diversified businesses has enabled Enbridge Energy Partners to dilute its business risks as well as provide a stable and steadily growing earnings profile.
Enbridge Energy Partners currently carries a Zacks Rank #3 (Hold). Better-ranked players from the same space include Transmontaigne Partners L.P. TLP and Pembina Pipeline Corporation PBA. Both these stocks sport a Zacks Rank #1 (Strong Buy).
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