Pembina Pipeline Announces Growth Projects, Sets 2018 Capex

Energy transportation and service provider Pembina Pipeline Corporation (NYSE:PBA) recently approved the construction of two new capital projects worth around $330 million. The projects include Prince Rupert LPG Export Terminal and North Central Liquids Hub.

Construction of Prince Rupert LPG Export Terminal is likely to cost around 210 million with LPG capacity of around 25,000 barrels a day. Prince Rupert terminal will procure its LNG supply from Pembina Pipeline’s Redwater fractionation complex. Subject to necessary approvals, the project is expected to come to service by mid-2020. The project is expected to create around 200 jobs.

The company has also approved the development of North Central Liquids Hub Project in which Pembina holds around 46% interest. The capital cost of the project for Pembina Pipeline is likely to be around 120 million and is expected to become operational in late 2018. North Centrals Liquids Hub will get connected to the pipeline systems of the company.

Pembina Pipeline has planned a total capital budget of around $1.01 billion for 2018. The company plans to spend around $420 million and $200 million in its conventional pipelines and midstream business, respectively. It further intends to invest around 136 million in gas business and $132 million in new facilities under its joint venture partnerships. It will also allocate part of the capex toward oil Sands business and other value chain extension projects.

Pembina Pipeline which acquired Veresen, Inc. this year is expected to gain various commercial and financial synergies in 2018. That along with the solid project execution will result in the company to deliver an EBITDA of around $2.1 billion in 2018. The company’s large scale and diversified asset base will help it drive growth in the coming years.

Headquartered in Canada, Pembina Pipeline operates in four major segments — Conventional Pipelines, Gas Services, Midstream & Marketing and Oil Sands and Heavy Oil. The company presently carries a Zacks Rank #4 (Sell).

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Some better-ranked players in the energy space are Denbury Resources, Inc. (NYSE:DNR) , Northern Oil and Gas, Inc. (NYSE:NOG) and Bill Barrett Corporation (NYSE:BBG) . While Denbury Resources and Northern Oil and Gas sport a Zacks Rank #1 (Strong Buy), Bill Barrett carries a Zacks Rank#2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Denbury Resources delivered an average positive earnings surprise of 125% in the trailing four quarters.

Northern Oil and Gas delivered an average positive earnings surprise of 175% in the trailing four quarters.

Bill Barrett delivered an average positive earnings surprise of 19.41% in the trailing four quarters.

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