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Energy Transfer (ETP) Rover Compressor Station Gets FERC Nod

Zacks Equity Research
Updated

Pipeline operator, Energy Transfer Partners ETP recently declared that its mainline compressor station 1 of the Rover Pipeline Project has been approved by the Federal Energy Regulatory Commission ("FERC") for partial service.

Background

In May 2017, Energy Transfer was banned from further operations in the pipeline by U.S. energy regulators after spilling of around 2 million gallons of drilling fluid in Ohio. It was followed by the Ohio Environmental Protection Agency fining Energy Transfer Partners $2.3 million for water and air pollution. Toward September-end, the partnership received approval from FERC for Horizontal Directional Drilling operations for the Rover Pipeline Project in Ohio.

Recent Development

The latest approval will enable the partnership to increase the capacity of the Phase 1A of the pipeline. The 213-mile pipeline now can transport more than 1 billion cubic feet (Bcf) of natural gas every day from Cadiz to Defiance in Ohio. Following the regulatory nod, the partnership can start operations in its three compressor units in the station, which is located in Carroll County of eastern Ohio. While Phase 1A of the project started during the end of August, the partnership's Phase 1B construction is expected to be complete by the end of 2017. At this pace, the partnership expects the $4.2 billion full project to be in service by the end of the first quarter of 2018.

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Significance of the Project

Completion of the 713-mile pipeline will help Energy Transfers to ship around 3.25 Bcf per day. Producers in the Marcellus and Utica Shale areas will benefit from the pipeline's service as it will connect them with the U.S. markets and the Union Gas Dawn Storage Hub located in Ontario, Canada.

Energy Transfer has The Blackstone Group L.P. BX as a fellow stakeholder in the Rover Pipeline project.

About the Partnership

Energy Transfer is one of the largest master limited partnerships, with a highly diversified portfolio of energy assets in the United States. The asset list includes 71,000 miles of crude oil, natural gas, natural gas liquids and refined products pipelines, spanning 36 states. It also provides fractionation, storage and terminalling facilities.  The partnership is headquartered in Dallas, TX.

Price Performance

Energy Transfer has lost 23.6% of its value year to date compared with 13.6% loss of its industry.

 

Zacks Rank and Stocks to Consider

Energy Transfer Partners has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the oil and energy sector are JA Solar Holdings, Co., Ltd. JASO and First Solar, Inc. FSLR, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

JA Solar’s sales for 2017 are expected to increase 6.1% year over year. The company delivered a positive average earnings surprise of 716.7% in the last four quarters.

First Solar’s sales for the third quarter of 2017 are expected to rally 16.1% year over year. The company delivered a positive average earnings surprise of 524.2% in the last four quarters.

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Sunoco Logistics Partners LP (ETP) : Free Stock Analysis Report
 
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First Solar, Inc. (FSLR) : Free Stock Analysis Report
 
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