Pipelines have been in the news. Canada’s largest pipeline company, TransCanada Corporation (symbol TRP on Toronto) has made headlines with its ongoing disagreement with the U.S. government over the completion of its Keystone XL pipeline to the Gulf Coast. The Obama administration blocked the Nebraska section of the project last November, citing environmental concerns. TransCanada has submitted a proposal for a re-routing of the pipeline and is awaiting a new environmental review.
Pembina Pipelines had attracted much less attention until it came up with some interesting news of its own this year: the purchase of a firm with significant assets in natural gas liquids (NGL).
PEMBINA PIPELINE (Toronto symbol PPL; www.pembina.com) owns pipeline systems with a total length of over 7,500 kilometres. These lines pump oil and gas from fields in B.C. and Alberta to refineries, or feed into major pipelines, such as the Enbridge Pipeline System.
Pembina also owns the Syncrude, Horizon and Cheecham pipelines, which pump crude oil from the Alberta oil sands. In addition, the company holds a 50% stake in the Fort Saskatchewan Ethylene Storage Limited Partnership. It also owns the Cutbank Complex, a network of natural gas gathering and processing facilities.
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Dividend stocks: Pembina pays $3.2 billion for natural gas liquids firm
In the three months ended December 31, 2011, Pembina’s cash flow rose 2.9%, to $66.8 million, or $0.40 a share, from $64.9 million, or $0.39 a share, a year earlier.
In January 2012, Pembina bought rival Provident Energy, which extracts, transports and stores natural gas liquids (NGLs), for $3.2 billion. This purchase was the main reason for the higher cash flow.
Thanks to the higher cash flow, Pembina raised its monthly dividend by 3.8%, to $0.135 from $0.13, with the April 2012 payment. The shares now yield 5.4%.
In the latest issue of Canadian Wealth Advisor, we assess whether Provident Energy is a good fit with Pembina, and what the expansion into NGLs will mean for the company’s operations. We conclude with our clear buy-hold-sell advice on the stock.
COMMENTS PLEASE
Do you approve or disapprove of the Obama administration’s efforts at blocking the TransCanada’s Keystone XL pipeline? Do you think that TransCanada faces any reprisal risk from environmentalists in the Obama administration for fighting back? Let us know what you think in the comments section below. Click here.
Comments
yvette
I think Pres. Obama is being “forced” to balance the political repercussions from the increasingly powerful envirnmental group voters against the obvious pressures from voters who welcome the immediate job creation and other economic benefits of seeing this pipeline built. If he is reelected,I do not doubt approval for the “revised” Nebraska route will be an acceptable reason for then giving the approval. He does not have somplete support within his own party and, having lost control of Congress in the mid-terms, he is not free to do what he “knows needs to be done.
While his admin. is strongly turning to nat. gas as the way to energy independence from the Middle East, I am sure he knows that oil will continue to be important for the forseeable future and Canada is their safest outside source.Also, in future, a pipeline can carry either oil or gas….!
TransCanada could have done some research before drawing a line directly over the Oglalla reservoir, the most valuable underground source of water for the arid Western prairies.
The Obama administration has failed to make policy on sound environmental, geological or scientific grounds. Instead, it has listened to lobby and protest groups funded by Saudi and Venezuelan interests, who seek to frustrate Canadian suppliers offering alternatives to their “tainted (politically/socially) oil”. Obama pretends to be a friend of Canada; with a friend like Obama, we need no enemies! The Keystone Pipeline route, now adjusted, has met all reasonable technical objections; yet it is blocked solely for extremist political reasons.
Hi,
I don’t expect the Obama Administration to “retaliate” against Transcanada. The objection to the Nebraska route may have been justified. The administration has been labelled as anti-oil but it seems to me that there’s been more drilling in the US in the last 4 years than I can remember ever before.
Louis
I believe that Obama did what he did for both political and environmental reasons. With a new route and the next government, whoever it is, I believe the pipeline will go through. Although there are also the Senate snd House of Representatives to consider.
It’s hard to understand why TRP didn’t see the future for a new pipeline with all the new tar sand developments. This was a huge mistake. Oil companies are used to getting quick returns and not many think long term, Long term to them is analyzing the next well location. The future for Alberta markets and transportation (pipelines) is very difficult and because of the politics may never come about.The NDP are going to be a big future problem.
I am a firm believer the keystone delay is American politics. I hope that I am wrong but the delay I feel is directly resulting from the hugh oil discoveries of the Baaken Shale deposits which could rid America of its dependance on Middle East suppliers. Alberta oil requires more expensive processing than the Baaken deposits hence the latter is cheaper to produce. The delay tactic I believe will possibly result in less usage of the Tar sand oil. It is imperitive the Pipeline be pushed through to Kitimat ASAP to find alternative markets in Asia.
Oil and natgas will find heir way like water. The world is so much bigger than the US. Export can be done to other places?
If prices go down other sectors will grow faster, and we can invest!
Keystone project should not go through. We need to create high tech jobs. Therefore building a refinery in Canada would create value added jobs. There is an infrastructure in place to ship the finished products by rail to anyone in Canada.Most governments in Canada are still thinking that we should only have a resource driven economy. That is wrong. Most jobs that are created to-day are service oriented jobs most of whom do not create any value to the economy.It is time Canada wakes up to the reality to what other countries in Europe are doing and that is creating high tech jobs.
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I think Pres. Obama is being “forced” to balance the political repercussions from the increasingly powerful envirnmental group voters against the obvious pressures from voters who welcome the immediate job creation and other economic benefits of seeing this pipeline built. If he is reelected,I do not doubt approval for the “revised” Nebraska route will be an acceptable reason for then giving the approval. He does not have somplete support within his own party and, having lost control of Congress in the mid-terms, he is not free to do what he “knows needs to be done.
While his admin. is strongly turning to nat. gas as the way to energy independence from the Middle East, I am sure he knows that oil will continue to be important for the forseeable future and Canada is their safest outside source.Also, in future, a pipeline can carry either oil or gas….!
TransCanada could have done some research before drawing a line directly over the Oglalla reservoir, the most valuable underground source of water for the arid Western prairies.
The Obama administration has failed to make policy on sound environmental, geological or scientific grounds. Instead, it has listened to lobby and protest groups funded by Saudi and Venezuelan interests, who seek to frustrate Canadian suppliers offering alternatives to their “tainted (politically/socially) oil”. Obama pretends to be a friend of Canada; with a friend like Obama, we need no enemies! The Keystone Pipeline route, now adjusted, has met all reasonable technical objections; yet it is blocked solely for extremist political reasons.
Hi,
I don’t expect the Obama Administration to “retaliate” against Transcanada. The objection to the Nebraska route may have been justified. The administration has been labelled as anti-oil but it seems to me that there’s been more drilling in the US in the last 4 years than I can remember ever before.
Louis
I believe that Obama did what he did for both political and environmental reasons. With a new route and the next government, whoever it is, I believe the pipeline will go through. Although there are also the Senate snd House of Representatives to consider.
It’s hard to understand why TRP didn’t see the future for a new pipeline with all the new tar sand developments. This was a huge mistake. Oil companies are used to getting quick returns and not many think long term, Long term to them is analyzing the next well location. The future for Alberta markets and transportation (pipelines) is very difficult and because of the politics may never come about.The NDP are going to be a big future problem.
I am a firm believer the keystone delay is American politics. I hope that I am wrong but the delay I feel is directly resulting from the hugh oil discoveries of the Baaken Shale deposits which could rid America of its dependance on Middle East suppliers. Alberta oil requires more expensive processing than the Baaken deposits hence the latter is cheaper to produce. The delay tactic I believe will possibly result in less usage of the Tar sand oil. It is imperitive the Pipeline be pushed through to Kitimat ASAP to find alternative markets in Asia.
Oil and natgas will find heir way like water. The world is so much bigger than the US. Export can be done to other places?
If prices go down other sectors will grow faster, and we can invest!
Keystone project should not go through. We need to create high tech jobs. Therefore building a refinery in Canada would create value added jobs. There is an infrastructure in place to ship the finished products by rail to anyone in Canada.Most governments in Canada are still thinking that we should only have a resource driven economy. That is wrong. Most jobs that are created to-day are service oriented jobs most of whom do not create any value to the economy.It is time Canada wakes up to the reality to what other countries in Europe are doing and that is creating high tech jobs.