Election 2016: Border-Crossing Pipelines, What's on the Chopping Block

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Researched by Industrial Info Resources (Sugar Land, Texas)--With the 2016 election looming large and the hydrocarbon economy doing its best to turn a profit, one area which will be directly impacted by the president's office will be the permitting of pipelines crossing U.S. borders. The Keystone XL (KXL) crude oil pipeline project by TransCanada Corporation (NYSE:TRP) (Calgary, Alberta) was famously denied its permit and subsequently put on indefinite hold in late 2015. This was a multi-billion dollar project with years spent in development that was cut down by a presidential veto, affecting the bottom line for TransCanada and greatly affecting the takeaway capacity supply/demand picture for Western Canadian crude oil.

There are currently six major border-crossing pipeline projects, both liquids and gas that are proposed and are hoping to see presidential permits sometime during the next president's term of office. Over $10 billion in cross-border hydrocarbon transportation pipeline infrastructure projects, both to Canada and Mexico hang in the balance.

Of the six, three pipelines would transport crude oil. TransCanada's Upland pipeline project would transport 220,000 barrels per day (BBL/d) of Bakken crude oil up to interconnect with TransCanada's planned Energy East project, which would carry it east to St. John for export. Unlike KXL, this project would benefit American producers in North Dakota. However, it is a long-term hope as neither Upland nor Energy East are slated to be completed until 2020. The other two projects are the Express-Platte pipeline looping project by Spectra Energy Corporation (NYSE:SE) (Houston, Texas) and the Line 3 Replacement Program by Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta). The former is another long-term idea that is waiting on the economics to support fully undertaking it. The latter has already received its approval from the Canadian National Energy Board (NEB), and is steaming along while dealing with environmental permitting issues in Minnesota, near its terminus. Because the latter is a replacement of an existing pipeline, which already has its presidential permit, it can bypass that step of regulation; however, opponents have called for it to renew its presidential approval. These three projects represent the bulk of spending on cross-border pipelines, totaling over $9.5 billion in investments.

To the south, two natural gas pipelines, the Mier-Monterrey pipeline project by Kinder Morgan Incorporated (NYSE:KMI) (Houston) and the Nueva Era pipeline by Howard Energy Partners (San Antonio, Texas), are proposed. The two projects combined would carry up to 800 million cubic feet per day of natural gas from the U.S. to Mexico to support the nation's power generation infrastructure. Howard Energy Partners is also pursuing a refined products pipeline project, the Dos Aguilas project to export refined products from Corpus Christi refiners. All three Mexico-bound pipelines would begin shipping in early-to-mid 2018, seeking presidential approval in late 2016 -- early 2017 but represent less than $2 billion in spending.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.