One of Enbridge Inc.’s ENB pipelines in the Texas Eastern natural gas system in Kentucky is expected to restart services by the end of August, per Reuters. Notably, its 10, 15 and 25 Lines connect Danville and Tompkinsville compressors in Kentucky. In the beginning of the month, rupture of the 30-inch Line 15 resulted in a massive explosion, which killed one person and hospitalized five others. The explosion also destroyed several adjacent structures and railroad tracks.
The midstream giant intends to replace several portions of Lines 10 and 25 near the surrounding areas of the explosion site, and restart operations in Line 25 between Aug 24 and Aug 26. This will likely enable the company to transport 800 million cubic feet of natural gas per day through the area.
However, it requires regulatory approvals from the Pipeline and Hazardous Materials Safety Administration (PHMSA) for restarting operations in the pipelines. On Aug 8, PHMSA issued a corrective action order, which requires Enbridge to fulfil some duties before transporting gas through the site of the blast.
It expects the work on Line 10 to be concluded by the end of this month or beginning of September. The company intends to assess the full length of Line 15 that runs through Uniontown, PA to Kosciusko, MS.
Notably, in second-quarter 2019, the company’s Gas Transmission and Midstream segment reported adjusted EBITDA of C$936 million, down from C$1,032 million a year ago. This downside can be attributed to lower contributions from the US Midstream business, owing to divestments, and other reasons.
Moreover, higher planned integrity expenditure in US Gas Transmission affected the segment. The recent affairs in the Texas Eastern natural gas system might further affect the segment’s results in the third quarter.
Enbridge’s shares have rallied 8.2% year to date, outperforming the 6.1% collective growth of the industry it belongs to.
Zacks Rank and Other Stocks to Consider
Currently, the stock carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the energy sector are given below:
NuStar Energy L.P. NS is one of the largest independent liquids terminal and pipeline operators in the United States. Its third-quarter earnings per unit are expected to surge more than 100% year over year. It has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Pembina Pipeline Corp. PBA operates as an energy transportation and service provider. Its full-year 2019 earnings per unit are expected to grow more than 15% year over year. The company has a Zacks Rank #2.
Plains Group Holdings, L.P. PAGP is involved in the transportation, storage, terminalling, and marketing of crude oil and refined products. In the trailing four quarters, the company delivered average positive earnings surprise of almost 88.3%. It has a Zacks Rank #2.
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