logo
  Join        Login             Stock Quote

Ten Pipeline Stocks To Watch In 2013

 December 27, 2012 10:56 AM
 


(By Mani) The focus of attention on oil production lends itself to a discussion of production growth and pipeline additions in the Bakken, Permian, Eagle Ford, Cushing/Gulf Coast, and Niobrara/Wattenberg in the US and the Western Canada Sedimentary Basin in Alberta.

A rough cut of the capital to be invested in new oil pipelines in 2013 is $4.2 billion in the Bakken; $2.75 billion in the Eagle Ford; $2.7 billion in the Permian; $1.65 billion in Canada; $1.45 billion in the Cushing to Gulf Coast region and $350 million in the Niobrara/Wattenberg.

It is important to note that virtually all of these projects are commercially committed under longer term contracts that secure 70-80 percent and more of the volumes and returns for the midstream companies that are building the infrastructure.

[Related -Intel Corporation (INTC) and 5 Other Stocks That Could Pop on Earnings This Week]

"From the perspective of risk related to volatility of commodity prices, we worry about the 10% of the time that oil prices are so high that they threaten demand and the 10% of the time that oil prices are so low that they threaten supply," Deutsche Bank analyst Curt Launer wrote in a note to clients.

"Given the tests on each side of this equation that occurred in 2008 and again in 2012, we believe that the growth in infrastructure that supports an overall favorable thesis for the Natural Gas and MLP sectors is enhanced by the evolution of the North American Oil market," Launer said.

In 2013, companies are expected to spend $30 billion on infrastructure, including $14 billion for oil, $7.5 billion for natural gas and $5 billion for natural gas liquids. This is a record level of spending for the industry overall and for oil in particular. The oil projects are concentrated among relatively few companies, a few basins and a few market areas.

Following companies could benefit from the various trends in the oil industry.

[Related -Sector Detector: Is There Still Enough Fuel In The Bulls’ Tank?]

Bakken: Enbridge, Inc. (NYSE: ENB) (TSE: ENB)

Eagle Ford: Plains All American Pipeline, L.P. (NYSE: PAA); Kinder Morgan Energy Partners, L.P. (NYSE: KMP); Magellan Midstream Partners LP (NYSE: MMP)

Permian: Enterprise Products Partners L.P. (NYSE: EPD); Magellan Midstream; Plains All American; Energy Transfer Partners LP (NYSE: ETP)

Meanwhile, SemGroup (NYSE: SEMG) is expected to benefit from the activity in the Niobrara/Wattenberg while Enbridge, Kinder Morgan and TransCanada Corp. (NYSE: TRP) (TSE:TRP) would reap goods in Canada.

"We would point to the Cushing Storage market and the Cushing to Gulf Coast transportation market as poised for growth and upside. The largest capacity holders at Cushing include Rose Rock Midstream (NYSE: RRMS) along with MMP, PAA, ENB, and EPD," Launer noted.

Additionally, the proliferation of lighter oil barrels moving to the US East Coast and the refining capacity beneficiaries in the East Coast and Midwest of the US suggest upside for Buckeye Partners LP (NYSE: BPLand Kinder Morgan as the owners of terminal and storage capacity in the region.
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageThe Coca-Cola Company (KO) Q1 Earnings Preview: Guidance About to Fizzle?

The Coca-Cola Company (NYSE:KO) plans to release its first quarter earnings results before the market opens read on...

article imageIntel Corporation (INTC) Q1 Earnings Preview: A Business in Transition

Intel Corporation (NASDAQ:INTC) plans to post its first quarter earnings results promptly after the market read on...

article imageFord Motor Company (F): A long Road to Deutsche Bank’s $19 Target

Ford Motor Company (NYSE:F) is going the right way on a one way street where most everybody else is driving read on...

article imageCitigroup Inc (C) Q1 Earnings Preview: Too Many Parts Heading South

Citigroup Inc (NYSE:C) will issue its first quarter results via press release at approximately 8 a.m. (ET) read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.