Enbridge, NextDecade Collaborate To Build Rio Bravo Pipeline
Zacks Investment Research | Sep 18, 2019 09:11PM ET
Enbridge Inc. (NYSE:ENB) recently signed a Memorandum of Understanding (MOU) with NextDecade Corporation (NASDAQ:NEXT) to build the Rio Bravo natural gas pipeline and several other gas pipelines in South Texas. The pipelines are expected to support NextDecade’s proposed Rio Grande LNG export terminal in Brownsville, TX.
The 135.5-mile proposed Rio Bravo pipeline, which is part of a $20-billion project, is expected to have a transportation capacity of 4.5 billion cubic feet of natural gas per day. It will deliver natural gas from the Agua Dulce hub near Corpus Christi to the proposed Rio Grande LNG terminal, which is currently facing some challenges from localites and yet to receive federal permissions.
On completion of construction, the pipeline will transport natural gas from the Eagle Ford Shale and prolific Permian Basin, where natural gas production is on the rise. In the Permian, natural gas is produced as a by-product of crude oil. As oil production in the basin is projected to increase in the coming years, natural gas output will likely surge proportionately. Markedly, the MOU is expected to be finalized in fourth-quarter 2019.
The new pipelines to be built with NextDecade will enable Enbridge to earn more stable fee-based revenues under long-term contracts. Notably, Enbridge placed two key projects online in 2019 and is planning to bring several major projects online through 2019 to 2022. Overall, C$19 billion worth of low-risk new projects are likely to fetch the company more profits and raise the value of its shareholders in the coming years. It is well positioned to capitalize on the growing need for natural gas in North America, courtesy of the rapidly expanding business.
Price Performance
Calgary, Canada-based Enbridge has gained 13.2% year to date compared with 11.3% rally of the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.