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  • Transcanada Corporation (TRP) : Future Looks Bright 0 comments
    Jan 31, 2013 12:18 PM | about stocks: TRP

    If you're looking for an energy boring company, look elsewhere. Transcanada Corp. (TSX/NYSE : TRP) is all but that with many projects on the table. Among them, there is the Gulf Coast Pipeline Project.

    The Gulf Coast Project is an approximate 485-mile crude oil pipeline beginning in Cushing, Oklahoma and extending south to Nederland, Texas to serve the Gulf Coast marketplace. The 47-mile Houston Lateral Project is an additional project under development to transport oil to refineries in the Houston area. The construction of the pipeline started August 2012 to eventually be in service before the end of 2013. This pipeline is very important for the region because it will be able to address the limited access capacity for moving the crude oil to the refining terminals along the Gulf Coast. Needless to say, the U.S economy will benefit strongly from this.

    The Gulf Coast Pipeline should have the capacity to move from 700,000 barrels of crude oil per day to a maximum of 800,000 barrels per day.

    Another Pipeline, The Keystone, is a 2,150 miles pipeline that moves crude oil from Hardisty, Alberta to markets in the American Midwest at Wood River and Patoka in Illinois, and at Cushing, Oklahoma. The Canadian portion of the pipeline runs from Hardisty, Alberta east into Manitoba where it turns south and crosses the border into North Dakota. From North Dakota, the pipeline runs south through South Dakota and Nebraska. At Steele City, Nebraska, one arm of the pipeline runs east through Missouri for deliveries into Wood River and Patoka, Illinois; another arm runs south through Oklahoma for deliveries into Cushing, Oklahoma.

    TransCanada is trying to add another project to its existing Keystone Pipeline with the construction of the 1,179-mile Keystone XL Pipeline from Hardisty, Alberta to Steele City, Nebraska. TransCanada received approval from the Governor of Nebraska after a re-route of the initial route proposed. The concerns were about crossing an environmental sensitive region, the Sand Hills, where a major spill would be devastating for the environment. The re-route avoid this sensitive area and the only thing needed to begin construction is the Presidential approval, which would be done in April 2013. For further information on this project, see my article on the Keystone XL project.

    I believe both projects will bring a lot of new incentives on the table for investors. The company has a strong balance sheet and has enough earnings stream coming from its pipelines network and natural gas storage to sustain the dividend yield for years to come. Equity's appreciation will go up even if the U.S economy experience some bumps down the road. This stock is a great pick to brings some stability in any portfolio struggling with volatility.

    Several other projects are in motion at Transcanada Corp. as I write these lines but I will talk about them later in further articles.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: Energy Sector Stocks: TRP
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