TransCanada: Blue-Chip Canadian Pipeline Company At A Depressed Valuation
Thomas Lott • 35 Comments
Thomas Lott • 35 Comments
Wed, Nov. 23, 5:43 PM
- The Trump transition team is exploring ways the new president can green light TransCanada's (NYSE:TRP) Keystone XL oil pipeline on the day he is sworn into office, including by rescinding a 48-year-old presidential order, Bloomberg reports.
- Although details are still being developed, the Trump strategy reportedly hinges on rescinding a 1968 executive order that put the State Department in charge of permitting border-crossing oil pipelines and determining whether proposed projects serve the "national interest."
- Oil pipelines generally would still be subject to environmental review, even if the State Department is not involved, but the Keystone plans already have been vetted, with years of environmental scrutiny culminating in Pres. Obama’s decision last year that the pipeline was not in the U.S. interest.
Thu, Nov. 17, 7:21 PM
- TransCanada’s (NYSE:TRP) decision this week to end plans for lower tolls on its gas pipeline to eastern Canada means less supply will head there from the country’s western reservoirs, opening the door for U.S. explorers to edge out Canadian competitors and ship more gas north of the border, Bloomberg reports.
- Drillers in the Marcellus Shale are now poised to expand their reach in Canada’s population centers, and Evercore ISI analysts say Antero Resources (NYSE:AR), Rice Energy (NYSE:RICE) and Gulfport Energy (NASDAQ:GPOR) stand to benefit the most from TRP's move.
- TRP said its decision was forced by a lack of interest from western Canadian producers, but it raises the odds that the proposed Nexus pipeline, developed by Spectra Energy (NYSE:SE) and DTE Energy (NYSE:DTE), or the Rover project led by Energy Transfer Partners (NYSE:ETP), will allow Marcellus gas to displace Canadian supplies, GMP FirstEnergy's Martin King says.
- While some western Canadian producers are banking on a better pipeline deal from TRP, that offer may never come, says one natural gas consultant.
Thu, Nov. 17, 3:45 PM
- TransCanada (TRP +0.3%) is resumed with an Outperform rating and a $71 price target at BMO Capital, which says the company's decision to maintain 100% of its Mexico business increases its value.
- BMO also notes that TRP's dividend growth is expected to come in at the higher end of its previous 8%-10% guidance.
- BMO says its stock price target does not factor in any value for the Keystone XL pipeline, which could increase the stock's value by $4-$6/share.
Tue, Nov. 15, 4:57 PM
- The election of Trump, who supports TransCanada’s (NYSE:TRP) proposed Keystone XL pipeline, does not reduce the pressure on Canada's government to approve other pipeline projects to the Pacific and Atlantic coasts, Natural Resources Minister Jim Carr says.
- Financial Post interprets Carr's remarks as another indication that the Trudeau government is poised to approve Kinder Morgan's (NYSE:KMI) $6.8B Trans Mountain pipeline expansion project.
- Keystone XL “doesn’t get oil to export markets... in Asia, and it’s a goal of the government of Canada to expand its export markets,” Carr said today when asked about the impact of Trump’s U.S. victory on the government’s pipeline plans.
- Carr also reiterates the government's pledge to make a decision by Dec. 19 on whether to approve KMI’s request to triple the capacity of the Trans Mountain pipeline to 895K bbl/day.
Fri, Nov. 11, 4:43 PM
- Senate Majority Leader McConnell says he asked president-elect Trump to move swiftly to approve construction of the Keystone XL pipeline during their Capitol Hill meeting yesterday.
- Pres. Obama had vetoed legislation that would have moved ahead with construction of the TransCanada (NYSE:TRP) pipeline to ship bitumen from Alberta’s oil sands to U.S. Gulf Coast refineries, but an all-Republican government next year greatly enhances the odds for Keystone XL.
- TRP said earlier this week that it was still fully committed to Keystone, and was "evaluating ways to engage the new administrations on the benefits, the jobs and the tax revenues this project brings to the table."
Wed, Nov. 9, 2:36 PM
- TransCanada (TRP +1.6%) is higher, as Trump’s win could breathe new life into the Keystone XL project; the U.S. president-elect has said he would “absolutely approve it, 100%," although he also has said he wants a greater cut of the profits while not explaining what that means.
- RBC Capital believes a Trump victory is good for oil and gas infrastructure demand, which is good for growth for pipeline and midstream stocks and “especially those with U.S. operations and/or projects to move Canadian energy production into the U.S.”
- Energy Transfer Equity (ETE +16.6%), Energy Transfer Partners (ETP +12.2%) and Sunoco Logistics Partners (SXL +8.6%) also are higher as ebullient investors see an improved likelihood of completion of the Dakota Access pipeline.
Fri, Nov. 4, 7:58 AM
- TransCanada (NYSE:TRP) and shippers on the Canadian gas mainline system are closer to reaching an agreement on a new toll structure, according to the CEOs of Canadian Natural Resources (NYSE:CNQ) and Encana (NYSE:ECA), the country's two biggest natural gas producers.
- TRP has launched an open season to gauge interest in new proposed tolls on the system, offering shippers rates as low as C$0.75 per gigajoule if they sign up for a 10-year commitment; the rate is lower than a toll of C$0.82 per gigajoule originally proposed by TRP, which both CNQ and ECA said was too high given the length of the contract.
Tue, Nov. 1, 5:48 PM
- Alongside its Q3 earnings release, TransCanada (NYSE:TRP) announces an agreement to sell its U.S. Northeast power business, which it estimates to be worth $3.7B, to two buyers.
- TRP said earlier this year that it would sell the assets to finance its purchase of the Columbia Pipeline Group.
- TRP also agrees to buy all of Columbia Pipeline Partners (NYSE:CPPL) for $17/unit, or ~$915M; in September, it had offered to pay $15.75/unit, or $848M, for the MLP.
- TRP also says it will maintain full ownership interest in its Mexican natural gas pipeline business, and plans to raise $3.2B through a bought deal offering of common shares.
- The company says the moves, along with its stable base business and $25B of secured near-term growth, positions it to deliver an expected annual dividend growth rate at the upper end of previous guidance of 8%-10% through 2020.
- TRP -1.6% AH.
Tue, Nov. 1, 5:30 PM
Tue, Nov. 1, 5:30 PM
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Tue, Nov. 1, 5:08 PM
Mon, Oct. 31, 11:55 AM
- The Canadian government approves TransCanada's (TRP -0.1%) C$1.3B project to expand the Nova Gas Transmission natural gas gathering pipeline system in Alberta, with 36 conditions.
- The current NGTL System is a 14.6K-mile pipeline that gathers natural gas for use in Alberta for delivery to provincial border points for export to North American markets.
- TRP’s planned in-service date for the expanded system is April 2017.
Tue, Oct. 25, 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.