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Enbridge-EPD Ink LOI for Deepwater Crude Export Terminal

Zacks Equity Research

Enbridge Inc. ENB recently signed a letter of intent (LOI) with Enterprise Products Partners L.P. EPD to develop a deep-water crude export terminal. The offshore terminal will be located in the U.S. Gulf of Mexico and will have the capability to fully load Very Large Crude Carriers (VLCCs).

Precisely, if the proposed Sea Port Oil Terminal of Enterprise Products gets a green signal from the federal regulators, Enbridge will be able to utilize its option of buying ownership stake in the deepwater terminal.

Since export volumes of crude oil from the United States are growing rapidly, both Enbridge and Enterprise Products are well positioned to capitalize on the trend with the proposed deepwater export terminal.

Reportedly, among the eight midstream players that are planning to construct offshore crude export terminals in the Gulf of Mexico with capacity to load VLCCs, Enbridge and Enterprise Products are noteworthy. However, the deepwater terminals should get approval from The United States Maritime Administration (MARAD).

Enbridge added that it is progressing well with its plan to construct Jones Creek Crude Oil Storage Terminal. Per the company, its proposed terminal will have the capacity to store up to 15 million barrels of crude oil. Notably, the terminal will gain access to the key oil producing plays in North America. Importantly, the company will integrate the terminal with the Seaway Pipeline system to transport crude volumes to export facilities and major refineries in the Houston region.

While midstream infrastructure provider Enbridge – Headquartered in Calgary, Canada – carries a Zacks Rank #2 (Buy), Enterprise Products has a Zacks Rank #3 (Hold).  Meanwhile, a couple of top-ranked players in the energy space are Murphy USA Inc MUSA and CNX Resources Corporation CNX. While Murphy USA sports a Zacks Rank #1 (Strong Buy), CNX Resources carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA beat the Zacks Consensus Estimate in three of the prior four quarters.

CNX Resources surpassed the Zacks Consensus Estimate in two of the last four quarters. It has a trailing four-quarter positive earnings surprise of 34.8%, on average.

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