MDU Resources Group Inc. senior executives earlier this month promised to expand the midstream pipeline and construction business units following a “solid” performance in 2018 by all of the businesses.
The Bismarck, ND-based holding company for all of 2018 reported increased earnings across its multi-state utilities, midstream and construction materials/services units, CEO David Goodin said during a quarterly conference call.
“We finished two key natural gas pipeline projects last year that expanded our capacity by 240 MMcf/d, and these two projects, in addition to the new projects placed in service in 2017, allowed us to transport record volumes of gas on our system for the eighth consecutive quarter, and our overall capacity now exceeds 1.8 Bcf/d,” he said.
This year, the WBI Holdings Inc. pipeline unit is set to complete the Demicks Lake and Line 22 gas pipeline expansions in North Dakota, adding 175 MMcf/d and 22.5 MMcf/d of transport capacity, respectively. “Both projects have long-term customer commitments and are expected to be completed in late 2019,” Goodin said.
More recently, MDU’s pipeline unit announced plans for the 67-mile, 20-inch diameter North Bakken Pipeline, a $220 million, 200 MMcf/d project slated to start construction in 2021, depending on the amount of customer interest it draws.
Goodin said organic growth in the utility businesses is expected to increase rate base collectively by 5% annually over the next five years. He also said the construction materials/services units would continue to look for merger and acquisition opportunities like the four it completed last year.
“The units had exceptional earnings growth, and ended 2018 with record revenues, earnings, and backlog,” said Goodin, adding that the backlog projects are valued at $939 million. “This year we will continue to evaluate opportunities for acquisitions at both our construction services and materials companies, and for the companies to generate revenues of between $3.35-3.65 billion with margins the same as or slightly higher than 2018 levels.”
For 4Q2018, earnings were $78.8 million (40 cents/share), compared with $115.3 million (59 cents) in the same period in 2017. For 2018, earnings were $272.3 million ($1.39/share), compared with $280.4 million ($1.38) for 2017.
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