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Enbridge Brings Online TEAL Gas Pipeline Project in Ohio

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Per a company filing with U.S. federal energy regulators, Enbridge Inc (ENB - Free Report) has brought online a portion of Texas Eastern Appalachian Lease (“TEAL”) natural gas pipeline project in Ohio.

TEAL is intended to link the rising output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with markets in other parts of the United States and Canada. Several such gas pipelines are being designed.

On Sep 12, Enbridge's appeal to commission the 0.95-billion cubic feet per day (bcf/d) TEAL project was approved by the U.S. Federal Energy Regulatory Commission (FERC). TEAL’s capacity of 1 bcf of gas is adequate to fuel about 5 million homes for a day.

TEAL was also proposed with the intent to provide additional supplies for the NEXUS gas pipeline, which is a partnership between Enbridge and Michigan energy company DTE Energy Inc. The $2.6-billion NEXUS gas pipeline runs from Ohio to Michigan.

Per Enbridge, TEAL and NEXUS were projected to be brought online in the third quarter of 2018.The request to FERC for the approval to put a portion of NEXUS into service in September is still awaiting approval.

When commissioned, the 255-mile (410-kilometer) NEXUS project is expected to carry about 1.5 bcf/d of gas from the Marcellus and Utica shale fields to U.S. Midwest as well as Gulf Coast and Ontario in Canada.

New pipelines built to carry gas from the Marcellus and Utica basins have facilitated shale drillers to boost output in the Appalachia region. The yield in the Appalachia region is projected to touch a record high of about 29.4 bcf/d in October compared with 24.2 bcf/d in the year-ago period.

The projected output in the Appalachia region is equivalent to about 36% of the nation's estimated total dry gas output of 81.1 bcf/d in 2018. The Appalachia region produced only 1.6 bcf/d or 3% of the country's total production in 2008.

Price Performance

In the past year, Enbridge’s shares have declined 18.5% compared with the industry’s 11.3% fall.



 

Zacks Rank & Other Stocks to Consider

Enbridge currently carries a Zacks Rank #2 (Buy).

A few other top-ranked players in the same sector are Petroleo Brasileiro S.A. (PBR - Free Report) or Petrobras SA, Shell Midstream Partners, L.P (SHLX - Free Report) and Range Resources Corporation (RRC - Free Report) . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.

Shell Midstream Partners is involved in owning, operating, developing and acquiring pipelines and other midstream assets. The partnership delivered an average positive earnings surprise of 7.9% in the trailing four quarters.

Range Resources is an independent oil and gas company, engaged in the exploration, development and acquisition of oil and gas properties. The company delivered a positive earnings surprise of 74.2% in the last four quarters.

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