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Tallgrass (TGE) Finds Anchor Shipper for Seahorse Pipeline

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Tallgrass Energy, LP (TGE - Free Report) recently announced that the midstream energy infrastructure firm has inked a binding agreement with a company, which can become an anchor shipper for its Seahorse Pipeline. The partnership expects the shipper — which remains unnamed — to be an equity partner of the pipeline project. Moreover, the partnership plans to commence an open season for its Seahorse and Pony Express pipelines’ combination. Additionally, it acquired land for the Plaquemines Liquids Terminal.

About Seahorse Pipeline

The 700-mile crude pipeline will ship products from the oil hub in Cushing, OK to the Louisiana Gulf Coast. The pipeline is expected to come online in the third quarter of 2021. The initial capacity of the pipeline is expected to be 400,000 BPD, which will later be expanded to full capacity. As most of the shale operators are facing takeaway capacity constraints in the country, the pipeline will provide them a means to transport their products to international markets. Also, the pipeline will address the refining demand in the St. James area.

Joint Tariff Open Season

The partnership announced a joint tariff open season, which is expected to commence on Nov 30, to seek commitments for crude shipping through a combination of Seahorse and Pony Express pipelines. The move will enable shippers to connect from Guernsey and DJ-Basin to St. James refinery complex and Plaquemines Liquids Terminal of Tallgrass. Notably, earlier this month, the partnership announced a binding open season for Pony Express, with a proposed expanded capacity of 300,000 barrels per day, which is expected to come online in third-quarter 2020. 

Acquisition for Plaquemines Liquids Terminal

The partnership has acquired land for its Plaquemines Liquids Terminal for $30 million. The terminal site incorporates land of more than 600 acres beside the Mississippi River, which is located 30 miles south of New Orleans, LA. The terminal is expected to have a storage capacity of 20 million barrels of crude as well as refined products, and bring in positive reinforcements for the economy of Plaquemines.

Price Performance

Leawood, KS-based Tallgrass has lost 3.4% in the past year compared with 6.9% collective fall of the industry it belongs to.

 

 

Zacks Rank & Stocks to Consider

Currently, Tallgrass has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks given below:

Houston, TX-based Enterprise Products Partners L.P. (EPD - Free Report) holds a Zacks Rank #1 (Strong Buy). The company’s earnings for 2018 are expected to surge more than 36% year over year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Rome, Italy-based Eni S.p.A. (E - Free Report) has a Zacks Rank #1. Its earnings for 2018 are expected to grow more than 100% from the 2017 level. 

Houston, TX-based Shell Midstream Partners, L.P. (SHLX - Free Report) carries a Zacks Rank #2 (Buy). The company’s profits for 2018 are expected to grow nearly 20% from 2017.

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