Enbridge Energy Partners (EEP:NYSE)
Enbridge Energy Partners owns and operates the Lakehead system along with two other critical oil and gas conduits: the North Dakota and Mid-Continent systems. It also handles natural gas from onshore and offshore sources and manages a series of distribution lines.
Enbridge's North Dakota system collects crude oil and transports it through 620 miles of interstate pipes. The North Dakota pipes transport oil from 36 fields. It delivers oil to either regional refineries or connections with other pipelines, including the Lakehead system.
Its Mid-Continent system is 480 miles of pipe that combines the Ozark and West Tulsa crude oil pipelines. Thesee two lines deliver in excesss of 236,000 barrels per day. The pipes run from Cushing, Oklahoma, to refineries in Oklahoma and Wood River, Illinois. This line incorporates one of the largest above - ground storage facilities in North America. Crude oil terminals in Cushing and El Dorado, Kansas, hold up to 11.9 million barrels of oil.
Enbridge upgraded the terminals in 2005 with the addition of four 575,000-barrel tanks.
Enbridge also has three interstate gas distribution systems that serve consumers in Alabama, Louisiana, Missouri, Kansas and Tennessee. Enbridge is also a partner in 12 transmission and gathering pipelines in six major pipeline corridors in the Gulf of Mexico. These pipes transport 3 billion cubic feet of natural gas a day, on average.
North of the border, there are some excellent growth prospects for Enbridge's business.
Crude oil production in western Canada is forecast to increase by between 1 million and 1.7 million barrels per day up until the year 2015, due to ongoing and proposed projects by producers in the Alberta oil sands. The oil sands contain proven reserves of 174 billion barrels of oil.
Enbridge's focus on linking the U.S. and Canada could add $3 billion to its market cap over the next two years. That would translate to a 60% gain through organic growth alone.
Canadian oil will remain vital to U.S. needs throughout the coming decades. Canada's exports will grow with new oil sand production scheduled to come on line in the next five to 10 years. It is likely that, exports to the U.S. could almost double by 2014.
Enbridge had the foresight to recognize this growth and began positioning itself to meet the need. It proposed expansion projects designed to streamline Canadian crude supplies coming to the U.S. Enbridge is thus poised to have a very profitable future.
With its sound business roots in crude oil/natural gas transportation and storage services, Enbridge is in a very strong position for growth over the next few years.
The strategic location of Enbridge's major pipeline systems continues to generate excellent growth opportunities for investors. In addition to its great growth prospects, Enbridge currently pays out a dividend of 7.5%.
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