High yield pipes

High and sustainable yield sounds like an impossible combination especially today. Oil and natural gas pipeline operators should be somewhat shielded from the full effects of the current economic downturn. A glance at the yield and outlook of some of the larger American and Canadian pipeline companies.

Enbridge:

"As a result of our solid business model and our unwavering focus on safety, income and growth, we are one of very few Canadian companies to have a positive return to our shareholders in 2008," said Mr. Daniel. "As we announced in December 2008, we expect our 2009 earnings per share to grow by 20% as we continue to advance our portfolio of liquids pipelines growth projects. At present, our core business operations have been largely unaffected by the crisis in the financial markets and the recent slump in energy prices."

Yield:
Enbridge Inc.(NYSE:ENB)4.09%
Enbridge Energy Partners, L.P.(NYSE:EEP):15.51%

Pembina Pipeline Income Fund:

"For 2009, Pembina has identified $230 million in potential capital projects. This includes approximately $150 million related to the Nipisi and Mitsue Pipelines with the balance directed to the completion of development projects started in 2008, and to other discretionary projects and upgrades. Pembina expects to finance its capital spending program from a combination of undrawn bank facilities, cash flow from operations, Pembina's Premium Distribution, Distribution Reinvestment and Optional Cash Purchase Plan and from additional financing.

Pembina's Board of Directors, following a strategic review in response to the enactment of legislation introducing the taxation of specified investment flow-through entities, such as income trusts, has approved plans to convert from trust to corporate form at some time prior to the January 1, 2011 effective date of trust tax. Further, based on internal projections and certain assumptions, Pembina expects that it will be able to sustain its current distribution objective of $1.56 per Trust Unit annually over the next five years (in the form of a dividend after corporate conversion). Pembina's proven business strategy and premium assets, together with well developed growth initiatives, are expected to produce the solid, sustainable results that Pembina projects will support this commitment."

Yield:(TSX:PIF.UN)12.6%

TransCanada:

“TransCanada made significant progress on a number of major projects in 2008, including the Keystone oil pipeline system, the North Central Corridor expansion, the Bruce Power refurbishment, and three large-scale, gas-fired power plants. These major projects are all under construction today. In 2009, we expect to invest approximately $6 billion in these and other capital projects. The strong cash flow generated by our operating assets, along with recently completed debt and common equity issues, mean we are well-positioned to fund our sizable capital program. Looking forward, we expect to generate strong, long-term financial returns for our shareholders as a result of our growing portfolio of high-quality energy infrastructure assets, our proven project development and execution capabilities, and our strong financial position.”

Yield:
TransCanada Corporation (USA)(NYSE:TRP)5.18%
TC Pipelines LP.(NASDAQ:TCLP)11.74%

Kinder Morgan Energy Partners

"KMP previously announced that it expects to declare cash distributions of $4.20 per unit for 2009, a 4.5 percent increase over 2008. "We continue to be well positioned for future growth and anticipate that our business segments will generate over $3 billion of earnings before DD&A in 2009," Kinder said. "Growth will be driven by the continuation of our substantial capital investment program, which includes both expansions of existing assets along with new projects. As examples, we have three major natural gas projects scheduled to begin service in 2009."

The 2009 budget assumes an average West Texas Intermediate (WTI) crude oil price of $68 per barrel for the year. The majority of cash generated by KMP is fee based and is not sensitive to commodity prices. In its CO2 segment, the company hedges the majority of its oil production but does have exposure to unhedged volumes, most of which are natural gas liquids. For 2009, every $1 change in the average WTI crude oil price per barrel is expected to impact the CO2 segment by approximately $6 million (or about 0.2 percent of our combined business segments' anticipated distributable cash flow). If the average WTI crude oil price per barrel in 2009 were the same as the price experienced in 2008 (about $100 per barrel), then KMP would generate distributable cash flow that could support cash distributions of approximately $4.52 per unit for 2009. This sensitivity to the WTI price is very similar to what the company experienced in 2008."

Yield:(NYSE:KMP)10.09%

El Paso Pipeline Partners L.P.

"Building on a successful 2008, the partnership also announced future outlook highlights. In 2009, the partnership expects to generate approximately $180 million of distributable cash flow. This represents an increase of more than 20 percent over 2008, due to higher interests in its equity pipelines CIG and SNG, and recently completed expansion projects.

The partnership expects to spend $64 million in expansion capital, and $2 million in maintenance capital.

CIG and SNG are expected to spend total growth capital of approximately $200 million for expansion projects in 2009, which will be funded by amounts recovered from notes receivable under the cash management program with El Paso, and by capital contributions from their partners, including El Paso Pipeline Partners. The partnership anticipates its share of such capital contributions to be approximately $40 million in 2009."

Yield:(NYSE:EPB)7.62%