Enbridge Inc. (ENB - Free Report) recently received a permit from the United States Army Corps of Engineers to provide anchor support for the Line 5 petroleum pipeline under the Straits of Mackinac, in the state of Michigan. Following the approval, the company began the installation of 54 steel supports to the pipeline, as erosion created a gap between the lake bottom and the pipe.
In early August, the company stated that a stretch of lakebed had washed away, which left around 81-foot stretch of the pipeline without any support, almost six feet longer than the permissible limit. The installation of the support is expected to be completed by the end of this week. Notably, the company has installed 147 anchor supports on the Line 5's dual pipes since 2002, in order to deal with a similar problem.
The Line 5 has attracted interests from several environmental and tribal groups, who are rooting for the pipeline’s retirement. They are wary of the oil line’s present state and fearing that the pipeline could lead to a potential spill. Enbridge intends to install a multi-use utility tunnel that is to be drilled through the bedrock of the channel and decommission the 66-year old pipes. The company urges that building the tunnel will enable it to safely deliver uninterrupted energy sources to residents of the state.
Although the tunnel plan was approved by the Snyder administration last year, it is currently fighting legal battles. The project, which involves extensive engineering works, is expected to take 7-10 years for completion. Until then, around 23 million gallons of natural gas liquids and oil — which are used to make propane — will be transported through the lines daily. Markedly, the cost of designing, building and maintaining the tunnel will likely be met by the company.
Calgary, Canada-based Enbridge has gained 13.6% year to date compared with 10.2% rally of the industry it belongs to.
Zacks Rank and Stocks to Consider
Currently, Enbridge carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are National Oilwell Varco, Inc. (NOV - Free Report) , Pembina Pipeline Corp. (PBA - Free Report) and Dril-Quip, Inc. (DRQ - Free Report) . All these companies hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
National Oilwell’s 2019 earnings per share are expected to rise 137.5% year over year.
Pembina’s 2019 earnings per share are expected to rise 21.5% year over year.
Dril-Quip’s 2019 earnings per share are expected to rise 127% year over year.
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