Oil and gas giant Enbridge (TSE:ENB) has announced plans to build pipelines for the Kaskida project in the Gulf of Mexico, which has around 275 million barrels of oil contained within it. Enbridge will own the pipelines on behalf of British Petroleum (BP).
The pipeline in question is known as the Canyon Oil Pipeline System, and it will be built from the Keathley Canyon area to Green Canyon 19, a platform that is owned by Shell (SHEL). Once the oil is sent to Green Canyon 19, it will be routed to the Louisiana market for further distribution and refinement. The pipeline’s total cost will be around $700 million.
Bullish on Natural Gas
The Kaskida project also has excellent natural gas reserves, which is actually in keeping with Enbridge’s future expansion plans. Enbridge has said it is bullish on natural gas. Recent purchases of East Ohio Gas, Quest Star, and others, has pushed it to about 50% liquid fuel and 50% natural gas.
Enbridge is apparently looking to artificial intelligence (AI) and data center growth as future drivers of natural gas use. The massive demands for electricity, coupled with the increasing use of natural gas in electrical generation, should lead to a strong market for natural gas .
Is Enbridge a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:ENB stock based on four Buy, four Hold and one Sell recommendation assigned in the past three months, as indicated by the graphic below. After a 37.38% rally in its share price over the past year, the average TSE:ENB price target of C$55.63 per share implies 1.08% upside potential.
