Back to top

Analyst Blog

On Jun 4, NOVA Gas Transmission Ltd., a wholly-owned subsidiary of the pipeline operator TransCanada Corp. (TRP - Snapshot Report), entered into an agreement with the Canadian arm of the U.S. energy firms Chevron Corp. (CVX - Analyst Report) and Apache Corp. (APA - Analyst Report) to provide natural gas transportation services through its planned Merrick Mainline Pipeline.

The Pipeline will transport about 1.9 billion cubic feet (Bcf) of natural gas per day through NOVA Gas’ pipeline system and will be linked to Chevron and Apache’s proposed Pacific Trail Pipeline that will transport the gas to Kitimat LNG Terminal.

Spread across 260 kilometers, the Merrick Mainline Pipeline Project is expected to cost C$1.9 billion. TransCanada’s management stated that it currently has four main natural gas pipelines under development with an investment base of C$12.6 billion.

The Merrick Mainline Pipeline Project is progressing well. TransCanada plans to apply for necessary approvals to build the project in the final quarter of the year. The pipeline construction also depends on the Kitimat LNG project receiving a positive Final Investment Decision (FID). The company expects the pipeline to commence operations in the first quarter of 2020.

The company mentioned that under the commercial agreement with Chevron and Apache, the delivery volume should be an average of 1.9 Bcf per day between 2020 and 2022. The proposed pipeline project is an important part of the company’s growth plans. TransCanada’s growth plan includes completion of several commercial projects by the end of 2020 with a total investment plan of C$38 billion.

Calgary-based TransCanada currently has a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader equity market in the next one to three months.

Meanwhile, one can consider a better-ranked player from the oil production and pipeline industry such as EQT Midstream Partners, LP (EQM - Snapshot Report). The partnership sports a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%