One of the largest energy infrastructure companies in North America, Kinder Morgan Inc KMI, received nod from Canada’s National Energy Board (NEB) to commence construction on the Burnaby marine terminal.
This terminal development is a part of the controversial Trans Mountain pipeline expansion project, which was recently opposed by Canadian natives.
NEB approved the project based on the outcome of a pre-construction audit. Per the audit, Kinder Morgan was required to tender a remedial action program to deal with numerous issues. This comprised the midstream energy firm’s quality assurance plan, risk analysis, organizational structure and its description of examination and monitoring requirements.
It is to be noted that the NEB gave its consent for Trans Mountain project last year. But the approval was dependent onthe fulfillment of 157 conditions.
About the Pipeline
The Canadian unit of Kinder Morgan owns the 1,150 km Trans Mountain Pipeline, which transports crude and refined oil from Alberta to the west coast of British Columbia.
The construction of the expansion project that could begin in September will help the company to nearly triple the size of the existing pipeline. The new development will help Kinder Morgan to carry 890,000 barrels a day of crude from Edmonton, Alberta, to Barnaby, British Columbia.
About the Company
Headquartered in Houston, TX, Kinder Morgan has the largest network of natural gas pipeline in North America that spreads over almost 70,000 miles. Most importantly, the company’s midstream properties are linked to all the prospective plays in the United States that are rich in natural gas. These extensive pipeline networks, for which almost $32 billion has been invested to date, have been providing Kinder Morgan with stable fee-based revenues.
However, we are concerned about Kinder Morgan’s weak balance sheet. As of second quarter 2017, total debt – both short and long term – stands at $37.1 billion. The debt capital is higher than the total equity capital of $36.2 billion which shows the company’s significant exposure to debt.
Price Movement
The company’s share price has increased 1.5% compared with the industry’s gain of 4.3%, over the past three months..jpg)
Zacks Rank & Key Picks
Currently, Kinder Morgan carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include TransCanada Corporation TRP, Transmontaigne Partners LP TLP and Range Resources Corporation RRC. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Calgary, Canada, TransCanada is a midstream energy firm in North America. The company delivered an average positive earnings surprise of 4.06% over the last four quarters.
Transmontaigne, headquartered in Denver, CO, is involved in transporting and storing refined petroleum products. The firm pulled off an average positive earnings surprise of 6.60% over the last four quarters.
Based in Fort Worth, TX, Range Resources is an independent oil and gas company, engaged in the exploration, development and acquisition of U.S. oil and gas resources. The company’s 2017 earnings are estimated to grow 1587.17%.
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