Latest news with #pipelines
Globe and Mail
13 hours ago
- Business
- Globe and Mail
Where Will Energy Transfer Be in 1 Year?
Energy Transfer (NYSE: ET) is a midstream master limited partnership (MLP) with a lofty 7.5% distribution yield. There are a couple of big-picture reasons to dislike the business, but there are also some notable reasons to like it. One big reason to be positive is the growth opportunity in the years ahead for this diversified MLP. Here's what you need to know. What does Energy Transfer do? Energy Transfer owns energy pipelines, storage, and transportation assets that help to move oil and natural gas from where they are produced to where they are used. The MLP largely charges fees for the use of this vital energy infrastructure, with about 90% of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) tied to fees. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » The business itself is fairly well diversified. Natural gas liquids and refined products account for 24% of EBITDA, midstream assets 23%, natural gas pipelines and storage 21%, crude oil 18%, and its stakes in two publicly traded MLPs 14%. Energy Transfer's leverage is within management's target range, and it's projecting 3% to 5% annual distribution increases for the foreseeable future. That said, too much leverage led to a distribution cut in 2020, a time of great uncertainty in the energy sector thanks to the coronavirus pandemic. Income investors were severely let down right when they likely would have most wanted income consistency. That cut comes on top of an unfortunate event involving peer Williams (NYSE: WMB) in 2016. Energy Transfer agreed to buy Williams and then chose to back out of the deal because it would have required a dividend cut, taking on massive debt, or both. Part of the process of killing the deal was the sale of convertible notes that look like they would have protected the then-CEO from the effect of a dividend cut, if one had been needed. The deal was called off, but this event, coupled with the distribution cut in 2020, should cause more conservative investors to pause here. There are equally attractive midstream businesses that don't have similar, potentially objectionable, histories. There are 5 billion reasons to like Energy Transfer However, there are reasons to find Energy Transfer attractive. That starts with the fact, as noted above, that leverage is back down to levels with which management is comfortable. A stronger balance sheet is the foundation on which Energy Transfer is spending $5 billion in 2025 on capital investments. The investments are spread across its business, with the midstream segments getting 30% of the cash, natural gas liquids and refined products 28%, natural gas pipelines 28%, oil 6%, and "other" the remainder. There is an array of different types of projects in the works, from incremental improvements to existing assets to the ground-up construction of new assets. A number of capital investment projects will be completed in 2025, but there are others that will start adding to cash flow in 2026 and beyond. There are additional projects waiting in the wings that can be added to Energy Transfer's capital plans in the future. The big picture takeaway is that slow and steady growth seems like the order of the day, which is backed up by management's target of 3% to 5% distribution growth over the longer term. Where will Energy Transfer be in 1 year? Energy Transfer's business should be slightly larger and more profitable in a year. That is likely to mean a distribution that's a little bit higher, too. If you can look past the trust issues that have arisen in the past, this high-yield midstream MLP looks like it is on a more sustainable path today. However, more conservative investors should note that the same sustainable growth path is expected from many peers, including Enterprise Products Partners, a competitor that has increased its distribution annually for 26 consecutive years. Should you invest $1,000 in Energy Transfer right now? Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor 's total average return is987% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025
CTV News
a day ago
- Business
- CTV News
There is potential' for getting pipelines built, says former energy executive
Watch Former energy executive Dennis McConaghy explains the push for pipelines at a premiers meeting.
CTV News
a day ago
- Business
- CTV News
Sask. industry leaders join first ministers in calls for pipeline, railway investment to boost trade
Saskatchewan Premier Scott Moe says pipelines are paramount to diversifying trade, along with investments in rail and ports. Allison Bamford has more. SASKATOON, SASK. — As Canadian politicians gathered in Saskatoon for the first ministers' meeting, some industry leaders are calling for infrastructure investment to help get product to market. New pipelines and improvements to railways and ports would help producers increase cash flow, according to Bill Prybylski, farmer and president of the Agricultural Producers Association of Saskatchewan. 'Grain movement has been slow,' Prybylski told CTV News. If grain isn't delivered, farmers don't get paid, which can cause cash flow issues at a very critical time in seeding. 'There's a lot of cash going into the ground and producers need inputs now,' Prybylski said. Like other industry leaders, Prybylski believes overcapacity demands on railways could be partly resolved if oil was transported through pipelines, rather than freight. Potash companies have been advocating for similar investments. 'Our entire infrastructure system is congested,' said Marnel Jones, director of Government and Public Affairs for The Mosaic Company in Canada. 'Right now, we just need to be thinking in a bigger way about how we use our entire supply chain more efficiently, and that includes getting oil into pipelines and potash and wheat into railcars so we can get it to market.' Michael Bourque, president and CEO of Fertilizer Canada, says he's in Saskatoon this week paying close attention to the first ministers' meeting. Bourque says 75 per cent of Canada's fertilizer is transported by rail, and millions of dollars can be lost when it isn't shipped. 'Rail doesn't have capacity, or there are bottlenecks along the way,' he said. 'So we need to build it out, make it more reliable, make it more efficient and that would go a long way toward helping us expand and serve global markets.' Like other industries, Fertilizer Canada supports new pipelines. But Bourque says that isn't the only solution. 'In the long run, that will help the capacity. But in the short term, what we'd rather see is much more investment in the hard infrastructure, especially rails (and) ports,' Bourque said. Simon Enoch, senior researcher with the Canadian Centre for Policy Alternatives, says transportational costs tend to be the biggest trade barrier. Rather than new pipelines, Enoch believes upgrades to infrastructure could better facilitate trade. 'The private sector, the oil industry itself, has shown very little interest, which makes me think that they view it as not a good investment,' Enoch said. 'Something like this to be built I think it's going to require huge government subsidies.'
CTV News
a day ago
- Business
- CTV News
Sask. industry leaders join first ministers in calls for pipeline, railway investment to boost trade
Saskatchewan Premier Scott Moe says pipelines are paramount to diversifying trade, along with investments in rail and ports. Allison Bamford has more. SASKATOON, SASK. — As Canadian politicians gathered in Saskatoon for the first ministers' meeting, some industry leaders are calling for infrastructure investment to help get product to market. New pipelines and improvements to railways and ports would help producers increase cash flow, according to Bill Prybylski, farmer and president of the Agricultural Producers Association of Saskatchewan. 'Grain movement has been slow,' Prybylski told CTV News. If grain isn't delivered, farmers don't get paid, which can cause cash flow issues at a very critical time in seeding. 'There's a lot of cash going into the ground and producers need inputs now,' Prybylski said. Like other industry leaders, Prybylski believes overcapacity demands on railways could be partly resolved if oil was transported through pipelines, rather than freight. Potash companies have been advocating for similar investments. 'Our entire infrastructure system is congested,' said Marnel Jones, director of Government and Public Affairs for The Mosaic Company in Canada. 'Right now, we just need to be thinking in a bigger way about how we use our entire supply chain more efficiently, and that includes getting oil into pipelines and potash and wheat into railcars so we can get it to market.' Michael Bourque, president and CEO of Fertilizer Canada, says he's in Saskatoon this week paying close attention to the first ministers' meeting. Bourque says 75 per cent of Canada's fertilizer is transported by rail, and millions of dollars can be lost when it isn't shipped. 'Rail doesn't have capacity, or there are bottlenecks along the way,' he said. 'So we need to build it out, make it more reliable, make it more efficient and that would go a long way toward helping us expand and serve global markets.' Like other industries, Fertilizer Canada supports new pipelines. But Bourque says that isn't the only solution. 'In the long run, that will help the capacity. But in the short term, what we'd rather see is much more investment in the hard infrastructure, especially rails (and) ports,' Bourque said. Simon Enoch, senior researcher with the Canadian Centre for Policy Alternatives, says transportational costs tend to be the biggest trade barrier. Rather than new pipelines, Enoch believes upgrades to infrastructure could better facilitate trade. 'The private sector, the oil industry itself, has shown very little interest, which makes me think that they view it as not a good investment,' Enoch said. 'Something like this to be built I think it's going to require huge government subsidies.'
CTV News
2 days ago
- Business
- CTV News
Premiers heap praise on meeting with Carney, but no specific projects identified
From pipelines to critical minerals, Canadian provinces and territories presented arguments for championing different projects. Judy Trinh reports. From pipelines to critical minerals, Canadian provinces and territories presented arguments for championing different projects. Judy Trinh reports. SASKATOON — Ontario Premier Doug Ford said Monday's gathering of the country's premiers to talk over nation-building projects with Prime Minister Mark Carney was the 'best' they have had in the last decade. The comments amount to a lightly veiled jab at former prime minister Justin Trudeau, who frequently had frosty relations with the group, especially prairie premiers looking to build out their energy sectors. Ford said the premiers, and the whole country along with them, stand united as Canada comes under attack from U.S. President Donald Trump's tariffs -- even as some in the group scrapped over well-worn pipeline politics. Provincial and territorial leaders sat down with Carney in Saskatoon on Monday and each premier came armed with wish lists of major projects they hope the federal government will deem to be in the national interest, then fast track for approval. 'The point is to build the certainty, the stability and the ambition that builders need to catalyze enormous investment -- investment to make Canada into an energy superpower,' Carney said at the closing news conference. While the group mulled over a number of potential 'nation-building' natural resource and infrastructure developments in private, they did not release a final list afterward that would show they accomplished something concrete. Still, Ford said there is no reason to take that as a bad sign. 'Nothing was carved in stone at this meeting,' he said, adding he had no expectations the prime minster would approve specific projects at this meeting. 'I described him today as Santa Claus. He's coming and his sled was full of all sorts of stuff. Now he's taking off back to the North Pole and he's going to sort it out and he's going to call us.' The federal Liberals have yet to reveal in Parliament their promised legislation to speed up approvals for select projects to a maximum of two years. That could be tabled as early as this week. When he was pressed on the lack of specifics after the meeting, Carney told reporters he could name lots of examples of contenders. He then rattled off a list that included the Grays Bay Road and Port, which would connect southern Canada to the Arctic by road, along with the Ring of Fire mining project in northern Ontario. Notably, he name dropped the Pathways Alliance oilsands project, though he did not commit to any. Carney said the group would refine what should count as priority projects over the summer months and touted that as 'private proponents become aware of the opportunity here, we're going to see more projects coming forward.' He said the upcoming federal legislation will also mandate meaningful consultation with Indigenous Peoples, including in which projects get picked and how they are developed. Alberta Premier Danielle Smith went into the meeting warning that any list that doesn't include new pipelines would send a bad message to her province. She left the meeting on a positive note, saying it's up to political leaders to find a proponent for a new pipeline and that she's willing to give this process a chance. 'I'm encouraged by the immediate change of tone that we've seen from recent months,' she said. 'When we hear the prime minster talking about being an energy superpower, we haven't heard that language for some time.' Carney made a point to specify that 'decarbonized' barrels of oil would be 'within the broader context of national interest.' 'Yes, there's real potential there,' he said. 'It took up a good deal of our time in discussions with potential to move forward on that. If further developed, the federal government will look to advance it.' Smith touted the Pathways Alliance project, a group of major Canadian oilsands companies that argues it can fight climate change through using carbon capture and storage to reduce emissions, as a way to do that. 'There's lots of ways to decarbonize, but the Pathways project is an expensive project,' she said. 'It would cost anywhere from $10 to $20 billion to get built. And to make the economic case for that, having more egress with more barrels to be sold to Asia is going to pay for it. If we had a million-barrel-a-day pipeline going to the northwest B.C. coast, that would generate about $20 billion a year in revenues, and so that seems like a pretty good value proposition.' But headed into the meeting, B.C. deputy premier Niki Sharma said Smith's proposal for a bitumen pipeline to B.C.'s northern coast, such as by reviving the stalled Northern Gateway, has 'no proponent' at this stage. 'We are focusing on these shovel-ready projects, not theoretical projects with no proponents,' Sharma said in a statement sent afterward. 'There is also an existing, underused pipeline Canadian taxpayers paid $34 billion for, with capacity to spare.' This report by The Canadian Press was first published June 2, 2025.
