What Energy Security Means for Midstream Energy Companies and Potential Credit Implications
Geopolitical rifts, rising energy costs, and energy supply disruptions have brought a renewed focus on energy security globally. The solution to energy insecurity is sourcing diverse and dependable supplies of energy. World energy supply lines are being redrawn, migrating away from unpredictable and politically motivated sources of supply to more trustworthy and reliable sources. Renewable energy consumption is on the rise globally as the cost of renewable power generation has been falling, and rising oil prices accelerate the transition to renewable power sources. Natural gas continues to play a key role in being a stable part of the supply mix and a reliable bridge fuel to supplement intermittent wind and solar power. Energy security also requires reliable energy infrastructure to provide energy transportation and connectivity and to meet near- and long-term energy needs.Key Highlights
-- Countries and companies are looking for long-term sustainable solutions to diversify their energy sources with cleaner, affordable, and reliable forms of energy.
-- In formulating an energy strategy, a concentrated portfolio is not the ideal situation for energy reliability and security, and countries heavily dependent on a single source of supply run the risk of disruptions.
-- Renewable and natural gas power generation can play a key role in providing additional electricity generation capacity to meet the growing global demand.
-- A diversified energy platform requires a reliable infrastructure of pipelines, processing, storage, export terminals, and the capacity to transport renewable and biofuels.
-- Pipeline and midstream energy companies are well positioned to provide the necessary infrastructure to support energy security and the green energy transition and are scaling up their renewable energy platforms.
“North American midstream energy companies are well positioned to pursue growth opportunities to support global energy security and transition needs,” said Ram Vadali, Senior Vice President of Natural Resources and Pipelines, Global Corporate Finance. “The infrastructure expansions required to support global energy security and energy transition and the essentiality of the service provided by midstream energy companies should be favourable for their growth and credit profiles.”
Enbridge is an energy transportation and distribution companyoperating in 5 segments: Liquids Pipelines, consists of common carrier and contract crude oil, natural gas liquids and refined products pipelines and terminals; Gas Distribution, of Co.'s natural gas utility operations; Gas Pipelines and Processi consists of investments in natural gas pipelines and processing facilities; Green Power and Transmission, consists of Co.'s investments in renewable energy assets and transmission facilities; and Energy Services, consist of physical commodity marketing activity and logistical services.
KeyCorp is a bank holding company. Through its principal subsidiary, KeyBank National Association and certain other subsidiaries, the company has the following main business segments: Consumer Bank, which serves individuals and small businesses by providing a variety of deposit and investment products, personal finance and financial wellness services, lending, mortgage and home equity, student loan refinancing, credit card, treasury services, and business advisory services; and Commercial Bank, which is focused principally on serving the needs of middle market clients in the following industry sectors, including consumer, energy, healthcare, industrial, public sector, real estate, and technology.
Kinder Morgan is an energy infrastructure company. The company's segments are: Natural Gas Pipelines, which includes the ownership and operation of, among others, main interstate and intrastate natural gas pipeline and storage systems; Products Pipelines, which includes the refined petroleum products, crude oil and condensate pipelines; Terminals, which includes the ownership and/or operation of, among others, liquids and bulk terminal facilities; and carbon dioxide (CO2), which includes the production, transportation and marketing of CO2, ownership interests in and/or operation of oil fields and gasoline processing plants in West Texas.
TransCanada is an energy company. Co. operates three business segments: natural gas pipeline, which transports natural gas across Canada, the U.S. and Mexico, and has regulated natural gas storage facilities in Michigan with a total capacity of 250 billion cubic ft.; liquids pipelines, which consists of wholly-owned and operated crude oil pipeline systems that connects Alberta and U.S. crude oil supplies to U.S. refining markets, as well as connecting U.S. crude oil supplies from the Cushing, OK hub to refining markets in the U.S Gulf Coast; and energy, which includes a portfolio of power generation assets in Canada and the U.S., and unregulated natural gas storage assets in Alberta.
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