In a July 4, 2014 Bloomberg article, a Bank of America report stated, “U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter.”
There’s no question that the shale boom has played a key part in the renaissance of both crude oil and natural gas production. But without the infrastructure to move it around, all that oil and gas would go nowhere.
So how do you and I profit from this situation?
North America’s Largest Pipeline Network
While upstream companies produce oil and gas, midstream companies transport, process and store it. The largest of those in North America is a very intriguing one, and the subject of this article.
This company, we’ll call it Company X, owns and operates about 80,000 miles of pipelines in the U.S. and Canada. It also has six pipelines tying into Mexico’s natural gas network.
It’s the largest transporter and storage operator of natural gas in the U.S. Almost 70,000 miles of its pipeline network transports natural gas.
The company’s vast network is connected to all the major natural gas shale plays. These include the Eagle Ford, Utica, Marcellus, Fayetteville, Haynesville, Woodford and Barnett.
Company X’s business strategy is simple: it builds, expands and acquires fee-based energy infrastructure in North America’s growing markets. And it’s the market leader in its businesses:
- It’s the largest processor of natural gas in North America. Its natural gas transmission lines provide connection points to nearly every major American city.
- What about crude transport? It is North America’s largest independent petroleum products transporter. Roughly 2.3 million barrels per day pass through the company’s oil product pipelines. Those pipelines primarily serve California, five other western states and the southeastern U.S.
- Company X is also the largest transporter of carbon dioxide (CO2). Most of the CO2 it transports is used to enhance oil recovery in the Permian Basin in West Texas.
- It is America’s largest independent terminal operator. It stores 125 million barrels of refined petroleum products, ethanol and other chemicals in its liquids terminals. Its dry bulk terminals handle and store 100 million tons of steel, petroleum coke and coal annually.
- The company owns and operates the only pipeline connecting Alberta’s oil sands and the west coast of Canada. Its Trans Mountain pipeline system delivers crude from Alberta to Washington state and British Columbia.
This is the type of company that you and I could really profit from, and I will certainly keep my eye on it for my Wealth from Power service. However, an unstable short-term economy means that simply knowing a good company to invest in isn’t enough.
You also have to know WHEN to enter the trade in order to ensure yourself a good investment with the potential to earn you huge gains, and the secrets behind when to buy and sell are spelled out in our Stock Code Breaker course.