TransCanada: Blue-Chip Canadian Pipeline Company At A Depressed Valuation
Thomas Lott • 35 Comments
Thomas Lott • 35 Comments
Today, 4:57 PM
- A Seaway Crude pipeline that spilled oil at the storage hub in Cushing, Okla., remains closed, but the crude oil market is taking the outage in stride as shipping capacity on the route from Cushing to the U.S. Gulf coast has roughly tripled over the last three years.
- Seaway Crude operator Enterprise Products Partners (NYSE:EPD) took the 850K bbl/day system out of service after one of the lines suffered a leak late Sunday night and restarted the 450K bbl/day Twin Line, which opened in 2014 and runs parallel to the legacy line and was not impacted by the spill, yesterday.
- "The market is not spooked by the Enterprise closure, so there must be adequate capacity on Seaway 2 to handle existing flows," says Sandy Fielden, director of commodities and energy research for Morningstar.
- Oil traders say there also is ample capacity to move oil to Port Arthur, Tex., or Houston on TransCanada's (NYSE:TRP) 700K bbl/day Marketlink line, which opened in 2013.
- Seaway Crude Pipeline is a joint venture of EPD and Enbridge (NYSE:ENB).
Thu, Oct. 13, 4:58 PM
- TransCanada (NYSE:TRP) officially launches its plan to push U.S. natural gas out of Ontario, as it offers Canadian gas producers lower than expected tolls on its underused mainline pipeline system.
- TRP is asking domestic natural gas producers to formally commit to shipping 1.5B cf/day of their gas from Alberta to Ontario, and in exchange, the company will cut its tolls roughly by half, from $1.41 per gigajoule to $0.75-$0.82.
- TRP is proposing a toll reduction in an effort to send more gas from western Canada to its traditional market in southern Ontario while reclaiming market share from Pennsylvania’s Marcellus formation, Financial Post reports.
Wed, Oct. 12, 3:37 PM
- TransCanada's (TRP +1.1%) proposed $1.4B Leach Xpress natural gas pipeline is pitting two U.S. government agencies against each other, as the EPA tells the FERC that the Commission failed to undertake a “proper” analysis of climate change in its final environmental impact statement for the 160-mile pipeline.
- The EPA says it is concerned about the FERC’s response in light of the Obama administration’s new guidelines on greenhouse gas impacts, and seeks "a definitive resolution to this matter before you publish a record of decision."
- The Leach Xpress project, which would allow for the shipment of 1.5M dekatherms per day of natural gas from the Appalachian basin, is scheduled to start in H2 2017.
Wed, Oct. 12, 2:48 PM
- Five oil pipelines that carry millions of barrels of crude to the U.S. from Canada have restarted after being shut down by environmental protesters yesterday, although at least one of the lines was operating at reduced rates.
- Company reps for TransCanada (NYSE:TRP) and Spectra Energy (SE, SEP) say their respective Keystone and Express pipelines both restarted yesterday afternoon, and Kinder Morgan (NYSE:KMI) says the spur of the pipeline impacted by the protesters is not operating but it has since restarted the rest of the pipeline.
- Enbridge (ENB, EEP) has not disclosed the situation at its Mainline pipeline, but Genscape says the pipeline has resumed normal flows.
Wed, Oct. 12, 12:28 PM
- Yesterday's sabotage of five cross-border pipelines that together can send 2.8M bbl/day of crude to the U.S. from Canada illustrated the vulnerability of North America's oil and gas pipeline system to low-tech attacks.
- The cost of posting armed guards at valve stations, usually found every 20 miles along underground pipelines, would be prohibitive, says Stewart Dewar, a project manager at Senstar, a company that authored a 2012 white paper on pipeline security; instead, the stations usually are protected by nothing more than an ordinary chain link fence and padlocks.
- Environmental groups say their actions against pipelines owned by Enbridge (NYSE:ENB), TransCanada (NYSE:TRP), Spectra Energy (NYSE:SE) and Kinder Morgan (NYSE:KMI) were an attempt to draw attention to climate change and support opponents of Energy Transfer Partners' (NYSE:ETP) proposed Dakota Access Pipeline.
- The acts caused no leaks yesterday, but pipeline operators and safety experts say shutting off valves was extremely dangerous and that activists underestimated the risks.
Tue, Oct. 11, 5:24 PM
- Environmentalists say they shut down five pipelines carrying crude from Canadian oil sands into the U.S., the latest move by activists to disrupt movement of oil across North America.
- Spectra Energy (NYSE:SE), one of four companies affected, says trespassers tampered with a valve on its Express Pipeline in Montana, forcing it to shut down the line as a precaution.
- The other pipelines claimed to have been shut in are Enbridge's (NYSE:ENB) Lines 4 and 67, TransCanada's (NYSE:TRP) Keystone pipeline, and Kinder Morgan's (NYSE:KMI) Trans Mountain pipeline; ENB says it shut pipelines at a valve site in Minnesota after trespassers cut chains and attempted to turn off vales.
- The Climate Direct Action group says it shut down the pipelines to stand in solidarity with the Native American tribe that has been protesting the construction of the Dakota Access pipeline.
Fri, Sep. 30, 4:42 PM
- Shippers on TransCanada's (NYSE:TRP) Mainline natural gas pipeline system are not signing up to a 42% cut on 10-year contracts because they think the toll is still too high for such a long-term commitment, Reuters reports.
- TRP is offering tolls as low as C$0.82/gigajoule on its western Canadian Mainline vs. the current ~C$1.41 shipping price to go from Alberta and British Columbia to markets in Ontario, but shippers remain unconvinced by the deal on offer and are asking for a lower rate, according to the report.
- Mainline shippers include Canadian Natural Resources (NYSE:CNQ) and Encana (NYSE:ECA); in late August, RBC analysts noted that CNQ management regarded the rate as "too high to provide the comfort needed in connection with a longer-term agreement."
Mon, Sep. 26, 7:38 AM
- TransCanada (NYSE:TRP) offers to acquire Columbia Pipeline Partners (NYSE:CPPL) for $15.75/unit in cash, in a deal valued at ~$848M.
- TRP says its offer price represents an 11.3% premium to the 30-day average closing price on Sept. 23.
- Since closing its takeover of Columbia Pipeline Group in July, TRP has been reviewing the strategy for Columbia's MLPs, CPPL and TC Pipelines (NYSE:TCP).
- CPPL owns stakes in three regulated U.S. natural gas pipelines extending from New York to the Gulf of Mexico, plus natural gas storage systems and a portfolio of gathering and processing assets.
Wed, Sep. 21, 8:04 PM
- TransCanada (NYSE:TRP) says its U.S. natural gas pipeline unit reached a settlement with customers over proposed transportation rate hikes made earlier this year.
- The settlement allows general transportation rates to rise by 34.8% over previous rates while storage rates remain essentially unchanged, and the unit will retain its seven-zone rate system.
- The settlement also includes a three-year, $837M capital maintenance program to upgrade the pipeline system.
- The ANR Pipeline unit connects markets in Wisconsin, Michigan, Illinois and Ohio with supplies from Texas, Oklahoma and the Gulf of Mexico through 9,400 miles of natural gas pipeline.
Wed, Sep. 21, 8:49 AM
- TransCanada’s (NYSE:TRP) proposed Energy East pipeline poses significant risks to Quebec’s freshwater resources, and concerns about the impacts of an oil spill should be weighed carefully, Premier Couillard tells Bloomberg.
- An offshoot of the pipeline would reach Montreal’s east end, which is not a “recipe for an easy discussion,” especially since the line avoids Toronto, Couillard says.
- The C$15.7B project faces an uncertain future after National Energy Board reviewers stepped down earlier this month amid allegations that the regulatory process was tarnished; Couillard says the provincial government soon will begin its own environmental review of Energy East.
Wed, Sep. 14, 10:34 AM
- Quebec's finance minister is calling on Canadian energy authorities to start a new environmental review of TransCanada's (TRP +0.3%) proposed Energy East pipeline after a National Energy Board panel was disbanded last week.
- Carlos Leitao notes that the pipeline would run through sources of fresh water for 3M people, saying “these things cannot be handled in a cavalier way.”
- Meanwhile, Natural Resources Minister Jim Carr expresses confidence that the government could appoint a new panel, even though industry observers say it might be hard to find fluent French-speakers who know enough about energy to be able to deliver a well-informed assessment on the pipeline.
Tue, Sep. 13, 1:57 PM
- Canadian Prime Minister Trudeau plans to approve at least one new oil pipeline project in his first term, with Kinder Morgan’s (KMI -1.9%) Trans Mountain expansion the most likely candidate, Bloomberg reports.
- Trudeau wants to strengthen environmental standards and build confidence in new regulatory rules while also assisting Canada's sluggish economy, so he plans to neither approve all the projects under consideration nor reject them all, according to the report.
- The prime minister also must decide on the Petronas Pacific NorthWest natural gas project, while TransCanada’s (TRP -1.9%) Energy East pipeline is due for a decision in about two years.
Mon, Sep. 12, 5:12 PM
- The chance that TransCanada's (NYSE:TRP) Energy East pipeline project will be built has fallen to 25% from 33% after the members of a National energy Board panel were forced to resign last Friday, CIBC analyst Robert Hope says.
- AltaCorp Capital analyst says the pipeline regulatory process has become so “murky” and “messy” due to political pressure that it’s difficult to say that any pipeline approval can be assured.
- East Energy would bring ~1.1M bbl/day of oil from Alberta and Saskatchewan to eastern Canada refineries and a marine terminal in New Brunswick.
Fri, Sep. 9, 6:57 PM
- Canada's National Energy Board says the three-man panel assessing TransCanada's (NYSE:TRP) proposed Energy East pipeline will step down "to preserve the integrity" of the board, a decision sure to drag out an already lengthy appraisal process.
- Critics had urged the dismissal of two of three panel members after it emerged that they had privately discussed the project last year with former Quebec Premier Charest, who was working for TRP as a consultant at the time.
- Environmentalists say the move still does not go far enough, saying Prime Minister Trudeau should scrap the whole NEB review process and start over with reviews on Energy East and Kinder Morgan's (NYSE:KMI) proposed Trans Mountain pipeline expansion.
Fri, Sep. 9, 4:43 PM
- Canadian Energy Minister Carr indicates that the government would not press for the removal of two members of a National Energy Board three-person panel looking into TransCanada's (NYSE:TRP) proposed Energy East pipeline despite protests over their actions.
- Carr says the NEB is independent of government and thus should make its own decisions on how to handle the controversy.
- Critics want two members to quit the NEB after it was revealed that the pair had privately discussed the project last year with former Quebec Premier Charest, who was working for TRP as a consultant at the time.
- The NEB last week suspended hearings in Montreal on the project after violent protests.
Tue, Aug. 30, 5:25 PM
- Canada's National Energy Board says hearings into TransCanada’s (NYSE:TRP) Energy East pipeline project will be suspended until it rules on motions demanding the resignation of two panel members.
- Opponents want the two panel members to step down following a report that the two had privately discussed the pipeline last year with former Quebec Premier Charest, who at the time was working for TRP as a consultant.
- The NEB also said it abandoned the sessions over security concerns following yesterday's disruptions that shut down the proceedings.
- The move is the latest setback for the Energy East project, which would carry 1.1M bbl/day of crude from Alberta's oil sands to Canada's east coast.