TransCanada: Blue-Chip Canadian Pipeline Company At A Depressed Valuation
Thomas Lott • 35 Comments
Thomas Lott • 35 Comments
Aug. 24, 2015, 12:58 PM
- TransCanada (NYSE:TRP) says it has resolved a dispute with three major Canadian natural gas distributors over its proposed $12B Energy East pipeline project it says will ensure that natural gas consumers in eastern Canada will have sufficient capacity and reduced natural gas transmission costs if the project proceeds.
- TRP says it will size the Eastern Mainline Project to fulfill all natural gas contracts, including new ones for 2016 and 2017, and add 50M cf/day of additional capacity.
- The agreement in principle is with Gaz Metro, Quebec’s largest natural gas distributor, and Union Gas and Enbridge Gas Distribution, which have major systems in Ontario.
Aug. 14, 2015, 11:41 AM
- Moving oil and gas by pipeline was 4.5x safer than moving the same volume the same distance by rail in the decade ended in 2013 in Canada, according to a new study by the Fraser Institute.
- “I hope it becomes better understood that saying ‘No’ to a pipeline is saying ‘Yes’ to rail, and that is to increase the risk to the environment and human health and not decrease it,” says the study's lead author.
- Crude-by-rail shipments in North America have skyrocketed in recent years as rising volumes from Alberta oil sands and U.S. shale oil plays outstrip the capacity of current pipelines.
- Canadian producers have waited seven years for the approval of the Keystone XL pipeline (NYSE:TRP), but the author says the safety study has just as much application in considering the Trans Mountain (NYSE:KMI) and Northern Gateway (NYSE:ENB) projects to the Canadian west coast and the Energy East pipeline to access Canada's east coast.
Aug. 13, 2015, 12:45 PM
- A key pipeline for delivering Canadian oil to the U.S. remains shut for a third day, leaving heavy crude stranded in Alberta and keeping its price in the cash market at ~$20 below the WTI benchmark.
- A small leak near Shelbina, Mo., coming from Enbridge’s (ENB -1.1%) Spearhead pipeline, which runs from Flanagan, Ill., to the Cushing, Okla., crude hub forced the shutdown Tuesday of the 193.3K bbl/day pipeline as well as a closing of the parallel Flanagan South pipeline, an even larger 585K bbl/day line that runs from Pontiac, Ill., to Cushing.
- ENB expects operations at Flanagan South to resume today, but does not know when Spearhead may return to service, as it continues to investigate the cause of the spill in Missouri.
- Operational problems at BP's (BP -1.5%) Whiting, Ind., refinery also keep the pressure on prices for Canada’s heavy crude as barrels continue to get backed up.
- Other related tickers: SU, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- Earlier: Canadian oil sands price nears $20/bbl, cut in half since July 1
Aug. 13, 2015, 11:59 AM
- Even though nearly half of TransCanada's (TRP -1.7%) proposed $12B Energy East crude oil pipeline runs through Ontario, the Ontario Energy Board says the project would result in only "modest" economic benefits for the province.
- "Ontario consumers need to be assured that enough pipeline capacity and natural gas supply will be available to meet Ontario’s medium- and long-term needs, particularly in eastern Ontario," the OEB says in a new report.
Aug. 12, 2015, 6:44 PM
- Canada’s October election has become the latest event shaping the seven-year saga of TransCanada's (NYSE:TRP) Keystone XL pipeline, and may lead to yet another delay in the Obama administration's decision to approve or reject the controversial project.
- Keystone XL is “something that all of our political candidates are talking about... so a decision from the U.S. at a key moment in the election would have very big reverberations," says Erin Flanagan, an analyst at the Toronto branch of the Pembina Institute.
- Prime Minister Harper of the Conservative Party is a Keystone champion, the New Democratic Party's Mulcair has spoken out against the pipeline, and the Liberal Party's Trudeau supports the project but criticizes Harper for letting the issue damage relations with the U.S.
- Meanwhile, as TRP has been waiting on a Keystone XL decision for nearly seven years, an Associated Press review of every cross-border pipeline application since 2004 shows the U.S. government has taken an average of 478 days to give a yes or no to all other applications - meaning the Keystone decision so far has dragged on for more than 5x the average.
Aug. 12, 2015, 12:27 PM
- Crude oil from Canada’s tar sands has slumped to $23/bbl, chopped in half since July 1 and widening its discount to West Texas Intermediate to nearly $20/bbl, due to a combination of steadily rising production, pipeline constraints and an unexpected outage at a U.S. refinery.
- The price plunge has done little to curb output because oil sands projects require years to plan, construct and pay back; Imperial Oil (NYSEMKT:IMO) recently doubled production capacity at its Kearl oil sands project to 220K bbl/day, and Canadian Natural Resources (NYSE:CNQ) last week said it was built to withstand low commodity prices even as it lost C$405M in Q2.
- At current oil prices, typical oil sands producers are just covering their operating costs, while companies with higher operating costs are “losing money with each barrel they’re producing," says the VP of energy research at ARC Financial in Calgary.
- The results have spilled beyond the oil market into Canada’s economy, forcing the central bank to twice cut interest rates, driving the Canadian dollar to a decade low and impacting the debate ahead of October's federal election.
- Other related tickers: TRP, ENB, SU, CVE, TCK, CEO, OTCPK:HUSKF
Jul. 31, 2015, 7:13 AM
- TransCanada (NYSE:TRP) declares C$0.52/share quarterly dividend, in line with previous.
- Forward yield 4.12%
- Payable Oct. 30; for shareholders of record Sept. 30; ex-div Sept. 28.
Jul. 31, 2015, 7:05 AM
- TransCanada (NYSE:TRP): Q2 EPS of $0.56 beats by $0.06.
- Revenue of $2.63B (+17.9% Y/Y) beats by $290M.
Jul. 30, 2015, 5:30 PM
Jul. 28, 2015, 5:55 PM
- A U.S. lawmaker who supports the Keystone XL (NYSE:TRP) pipeline says he's hearing that Pres. Obama is about to reject the project.
- Sen. John Hoeven, a Republican supporter of the Canada-to-Texas project, believes Obama will make the announcement during the August congressional break in the hope of reducing criticism from lawmakers.
- The president has vetoed a Keystone XL bill in the past, but has never definitively slammed the door shut on the project through the normal regulatory process.
Jul. 28, 2015, 1:12 PM
- Canada oil sands pipeline projects look doomed after the recent Nexen oil spill leaves "two big football fields of black goo," according to a Bloomberg analysis.
- A rupture in a line operated by the Cnooc (NYSE:CEO) unit that spewed 31K barrels of bitumen, waste water and sand has ignited outrage from communities along pipeline routes and is strengthening opposition that already has stalled every major crude export project from Canada and may lead to stricter regulations, the report says.
- The Alberta Energy Regulator could consider new requirements including scheduled and random inspections of pipelines during construction and while in operation, as well as better spill detection technology; meanwhile, the spill gets bad press in Canadian newspapers every day.
- Related tickers: TRP, ENB, SU, IMO, CNQ, CVE, TCK, OTCPK:HUSKF, OTCQX:COSWF
Jul. 14, 2015, 2:13 PM
- Quebec will support TransCanada’s (TRP -0.2%) Energy East pipeline only if it generates jobs for the province and if Alberta does more to protect the environment, Alberta Premier Rachel Notley says after meeting with Quebec Premier Couillard.
- Carbon pricing and the Energy East pipeline were among the topics discussed at the meeting, with both governments agreeing on their importance.
- While pipelines are “ultimately the best way to move” product from the oil sands, Notley says she and Couillard "need to see is some meaningful action with respect to environmental protection and climate change, and it needs to make economic sense."
- The proposed C$12B Energy East pipeline would transport as much as 1.1M bbl/day across six Canadian provinces to the Atlantic coast.
Jul. 1, 2015, 10:45 AM
- TransCanada (TRP -0.9%) says Canada’s recently announced plans to cut carbon emissions should be considered by U.S. policy makers when weighing the Keystone XL pipeline.
- TRP makes the argument in a new letter to Sec. of State Kerry and other U.S. officials, as the U.S. presidential authorization the pipeline needs to cross the border enters its seventh anniversary without a decision.
- The letter discusses Canada’s May announcement that it plans to cut greenhouse gas emissions by 30% below 2005 levels by 2030, Alberta’s decision to double the carbon tax it charges to $30/ton by 2017, and the stands taken by oil sands players Suncor and Cenovus in favor of tougher carbon pricing.
Jun. 23, 2015, 6:53 PM
- A new peer-reviewed study funded by the U.S. Department of Energy says Canada’s oil sands greenhouse gas emissions are an average of 20% higher than U.S. conventional crude, a finding that will add ammunition to opponents of the Keystone XL pipeline (NYSE:TRP) and other critics of Canadian crude.
- Noting that oil sands output is projected to more than double in the next 15 years with much of the crude potentially winding up in the U.S., the study says "higher [well-to-wheel] emissions for gasoline and diesel production in the U.S. are expected when oil sands products become a larger fraction of the U.S. fuel mix.”
- The study is likely to bring renewed scrutiny to U.S. imports of Canadian oil, which make up the largest single source of foreign crude in the U.S.
Jun. 23, 2015, 4:38 PM
- TransCanada (NYSE:TRP) says it is eliminating 185 full-time and contract jobs following a restructuring of its major projects department, saying the cuts were needed to ensure the lowest-cost services to its customers.
- The department oversees development of TRP's largest projects, including the Keystone XL and Energy East projects.
- Canadian oil and gas producers have cut thousands of jobs as weak oil prices hurt profits and cash flows, but these are TRP's first job cuts since the slump.
Jun. 12, 2015, 11:39 AM
- TransCanada (TRP -0.1%) says the positive final investment decision for the Pacific Northwest LNG liquefaction and export project is a significant milestone for its own Prince Rupert Gas Transmission Project, which would deliver gas to the proposed facility.
- In related news, the Canadian government accepted the National Energy Board's recommendation to conditionally approve TRP's North Montney Mainline Pipeline Project; the project will connect Montney and other Western Canadian Sedimentary Basin supply to natural gas markets including Pacific NorthWest LNG terminal through its interconnect with Prince Rupert.
TransCanada Corp. provides gas storage and related services. It operates as an energy infrastructure company in North America. The company operates its business through three segments: Natural Gas Pipelines, Liquid Pipelines and Energy. TransCanada was founded on May 15, 2003 and is... More
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