Spectra Energy Gas Transmission Project Receives Certificate - Analyst Blog

Spectra Energy Corp. (SE) announced that its proposed Westcoast Connector Gas Transmission Project received an Environmental Assessment Certificate from the Government of British Columbia.

The environmental review of the Westcoast Connector Gas Transmission Project assessed a natural gas transportation corridor that could accommodate up to two 48-inch pipelines with total design capacity of 8.4 billion cubic feet per day.

In British Columbia, Spectra Energy's natural gas pipeline system has been the backbone of the natural gas industry and moves more than 60% of the natural gas developed in the province.  

Spectra Energy is one of North America's leading pipeline and midstream companies. Based in Houston, TX, the company's operations in the United States and Canada include more than 22,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 305 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations.

Management remains optimistic on its future performance as its expansion program is on track. With its market leading position, diversified asset portfolio and strong investment opportunities, we expect Spectra Energy to sustain its growth momentum. Additionally, Spectra plans to invest $1 billion per year through 2015 in fee-based gas infrastructure growth projects.

The company expects to commission around 8 projects through 2016. Among these, Southern Hills and Sand Hills Pipelines, Front Range Pipeline, and Texas Express Pipeline, are expected to come online in the near future.

However, Spectra's results are vulnerable to fluctuations in natural gas markets. The proposed liquid-rich drilling activities by the company clearly suggest that volatility in natural gas prices will change little going forward. Major investments in several projects in Canada also expose Spectra to fluctuations in currency rates that may affect its operations.

Spectra Energy carries a Zacks Rank #3 (Hold). Better-ranked players in the energy sector include Cheniere Energy Partners LP. (CQP), Murphy USA Inc. (MUSA) and Sandridge Mississippian Trust II (SDR). All these stocks sport a Zacks Rank #1 (Strong Buy).