I added to my SE position today. If it pulls back, I will add again. Certain pipelines are extremely valuable and have moat-like qualities as I stated in a previous post. Such is the case of the Texas Eastern pipeline.
Message 30366308
As outlined in the Houston Chronicle reporting, it is the Texas Eastern that Enbridge coveted.
"Enbridge operates the longest crude oil and liquids transportation system across Canada and the United States; it also owns and operates Canada's largest natural gas distribution company, which serves Ontario, Quebec and New York state. And it has recently been building and buying up gas plants, pipelines and wind farms from Texas to West Virginia.
Analysts said Spectra made an attractive target because of one specific web of pipelines, the Texas Eastern Transmission lines, which run for 9,000 miles in total and stretch from the southern tip of Texas to New York City, connecting Gulf Coast producers to lucrative markets in Indiana, Ohio, Pennsylvania and New York."
Since there is very little overlap between the two systems, I believe this company will continue to grow in an environment where it will be increasingly difficult to build pipelines. In the most recent investor presentation, Spectra stated that there are one hundred coal plants within twenty miles of their gas pipelines. With the anticipated dividend increases, I believe this is a good long term hold. |
