Midstream player Energy Transfer Partners (ETP - Free Report) recently received approval from the Federal Energy Regulatory Commission (FERC) to offer Phase 1A of the Rover Pipeline.
Phase 1A signifies the portion of the Rover Pipeline that spreads over 212 miles and will carry natural gas from Cadiz, OH, to Defiance, OH. The pipeline initiated service on Aug 31.
Investors should know that the pipeline – being constructed by Energy Transfer – will likely be fully operational by November 2017. The full-line will spread over 713 miles and is expected to carry natural gas from the promising shale plays of Marcellus and Utica to the U.S markets. The pipeline will transport 3.25 billion cubic feet of natural gas daily. The broader Rover Pipeline will also reach natural gas to the storage hub at Ontario, Canada.
Once the $4.2 billion-worth Rover Pipeline starts full operation, we expect it to generate sufficient cashflow for the unitholders of Energy Transfer.
Dallas, TX-based Energy Transfer is a Master Limited Partnership (MLP) primarily engaged in the gathering, processing, storage and transportation of natural gas and natural gas liquids (NGL) through a network of pipelines spanning some 62,500 miles.
The partnership is well poised to grow on the back of its geographically dispersed asset mix. Further, Sunoco’s merger with Energy Transfer is likely to boost growth and value of the partnership and result in around $200 million in cost savings by 2019.
However, the partnership’s pricing chart is not impressive. Year to date, Energy Transfer lost 22.7% as compared with the 14.3% decline of the industry.
As a result, Energy Transfer currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
A few better-ranked players in the energy sector are TransCanada Corporation (TRP - Free Report) , Transmontaigne Partners LP (TLP - Free Report) and Range Resources Corporation (RRC - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Calgary, Canada, TransCanada is a midstream energy firm in North America. The company posted an average positive earnings surprise of 4.06% over the last four quarters.
Transmontaigne – headquartered in Denver, CO – is involved in the transportation and storing of refined petroleum products. The firm recorded an average positive earnings surprise of 6.60% over the last four quarters.
Based in Fort Worth, TX, Range Resources is an independent oil and gas company, engaged in the exploration, development and acquisition of U.S. oil and gas resources. The company’s 2017 earnings are estimated to grow 116.5%.
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