Back to top

Image: Bigstock

Enbridge (ENB) to Acquire Cushing Facilities From Blueknight

Read MoreHide Full Article

Enbridge Inc. (ENB - Free Report) recently made a deal with Blueknight Energy Partners, L.P. to acquire its several assets to boost liquids storage capabilities and connections. The purchase price of the Cushing assets is $132 million.

Per the latest deal, Enbridge is expected to receive 34 storage tanks with a total storage capacity of around 6.6 million barrels. The move will likely enhance its total storage capacity at Cushing to 26 million barrels. Notably, the company is the second largest storage operator at Cushing. Acquiring the assets instead of building them provides Enbridge with a competitive advantage.

The deal, which is expected to close in early-2021, will ramp up its storage capabilities and connections, thereby providing more flexibility and options to serve clients. The move is in line with the company’s U.S. Gulf Coast strategy. It will provide better connectivity to the producers in several basins.

Blueknight entered into several divestment agreements for a total cash consideration of $162 million. It made another divestment agreement with CVR Energy, Inc. (CVI - Free Report) for $20 million. Blueknight is expected to use the net proceeds from the deals to reduce debt and improve leverage.

Headquartered in Calgary, Alberta, Enbridge has one of the longest and most advanced crude as well as liquids pipeline system in the world that spreads across 17,127 miles. The company has a total of C$11 billion of low-risk inventory of midstream growth projects that will be coming online from 2020 through 2023. This reflects its plan of securing additional fee-based revenues in the coming years.

Price Performance

Enbridge’s shares have gained 4.5% in the past six months compared with 6.1% growth of the industry it belongs to.

Zacks Rank & Key Picks

The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Covanta Holding Corporation (CVA - Free Report) and Canadian Natural Resources Limited (CNQ - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Covanta Holding’s bottom line for 2021 is expected to rise 93% year over year.

Canadian Natural Resources’ sales for 2021 are expected to rise 18% year over year.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>