Dislocation = Opportunity In Enbridge Preferred Shares
Keubiko • 36 Comments
Keubiko • 36 Comments
Fri, May 27, 10:31 AM
- Kinder Morgan (KMI -0.6%) Canada president Ian Anderson tells Financial Post that its Trans Mountain pipeline expansion project will not face the same multi-year delays that have hurt the Northern Gateway pipeline.
- Anderson says KMI expects to begin construction work on Trans Mountain next summer, assuming it receives final federal approval in December; he plans to reach out to aboriginal groups fighting the $6.8B project “very soon,” but also notes that “we never expected unanimity. We will proceed according to federal jurisdiction and decision that we get."
- The comments come a week after the National Energy Board recommended approval of the project, subject to 157 conditions; meanwhile, Enbridge (ENB -0.4%) is seeking a three-year extension for its $6.5B Northern Gateway project, which was conditionally approved by federal regulators in 2014.
- Anderson says he does not expect Trans Mountain will face such a lengthy delay, in part because the legal challenges against KMI’s project were launched earlier in the regulatory process than in the Northern Gateway process.
Thu, May 26, 5:28 PM
- The amount of pollution created by vapor from Canada’s oil sands ranks on par with most major cities in North America, according to a new study by the country’s environmental regulator.
- While the connection between the oil sands’ carbon emissions and climate change is well documented, the study is the first to track the vapor produced in the process and the extent of the resulting pollution.
- Vapor from the bitumen of the oil sands is released into the air when it is dug up in open pit mines and later as the oil is separated out, and once in the atmosphere and exposed to sunlight, the vapors mix with other chemicals to become particles known as secondary organic aerosols; according to the study, the oil sands were rivaled by only the largest metro areas such as Los Angeles in creating the particles; vehicle exhaust and electrical generation are the main sources of the particles in cities.
- Relevant tickers: SU, CVE, IMO, XOM, RDS.A, RDS.B, CNQ, ENB, TRP, PDS, CEO, OTCPK:HUSKF, OTCPK:MEGEF, OTCPK:ATHOF
Wed, May 25, 11:16 AM
- Alberta's government introduced legislation yesterday to implement an economy-wide carbon tax starting next year, part of a broader environmental policy package expected to phase out coal-fired plants in the province and cap emissions from oil sands production.
- The new tax targets all fossil fuel consumption, including gasoline sales and natural gas for home heating; the government says it will levy a tax of C$20/metric ton from next January, which will be increased to C$30 from Jan. 1, 2018.
- Two major oil sands producers, Cenovus Energy (CVE +2.8%) and Suncor Energy (SU +1.9%), have welcomed the move to position the oil-rich province as a leader in environmental stewardship.
- Other relevant tickers: IMO, XOM, RDS.A, RDS.B, CNQ, ENB, TRP, PDS, CEO, OTCPK:HUSKF, OTCPK:MEGEF, OTCPK:ATHOF
Mon, May 23, 5:34 PM
- Mandatory evacuation orders were lifted today for the last of Alberta's oil sands production sites endangered by wildfires, Bloomberg reports, which starts the process of inspections by forestry and health officials to make sure the facilities safe for workers to return.
- Since late Friday, Alberta has removed orders that had prevented all but critical staff from remaining on sites connected with the operations of Suncor Energy (NYSE:SU), ConocoPhillips (NYSE:COP), Enbridge (NYSE:ENB) and Cnooc's (NYSE:CEO) Nexen unit, among others.
- The SU-controlled Syncrude joint venture says it is making progress on a plan to return to operations and will be able to give an update later on the timing for production restart.
- COP, which had shut down production at its Surmont project on May 5, says it has started the process of bringing workers back after getting approval.
Thu, May 19, 5:13 PM
- Kinder Morgan (NYSE:KMI) wins approval from Canada's National Energy Board for its plan to triple the capacity of the Trans Mountain Pipeline linking Alberta’s oil sands with Pacific markets.
- The regulator rules that the $5.4B expansion is in the public interest and should be allowed, but with 157 conditions limiting the project’s effects on the environment and aboriginal communities.
- The NEB’s chief environment officer says 93 of the 157 conditions were implemented following hearings held in British Columbia and Alberta.
- In the end, the NEB decided that Trans Mountain would deliver several “important benefits” to Canada, including “increased access to diverse markets for Canadian oil” and “considerable government revenues from the project.”
- The KMI project became more urgent after last year's rejection of the Keystone XL pipeline; other proposals, including Enbridge’s (NYSE:ENB) Northern Gateway and TransCanada’s (NYSE:TRP) Energy East, have been held up amid concerns about increased tanker traffic, spills and climate change.
Mon, May 16, 6:43 PM
- The massive wildfire burning near Fort McMurray, Alberta, is only ~1 km away (1,094 yards) from Enbridge's (NYSE:ENB) Cheecham oil sands transportation terminal.
- However, favorable winds are expected to help push the fire away from the facility, where crude is stored and shipped out from the Athabasca region about 75 km (47 miles) southeast of the Fort McMurray oil sands hub.
- ENB had evacuated the Cheecham terminal on May 4 but on Friday said it was staffed again; the company says the mainlines that carry crude from the region are still operating.
- The fire continues to burn uncontrolled, now covering 285K hectares (704K acres), with officials expecting hot, dry conditions to make firefighting difficult over the next few days.
Thu, May 12, 12:49 PM
- Enbridge (ENB +2.2%) is higher after reporting better than expected Q1 earnings, helped by increased shipments and new projects coming into service.
- ENB says it delivered ~2.5M bbl/day of crude oil through its Canadian mainline system during Q1, up from 2.2M bbl/day in the year-ago quarter, and ~2.7M bbl/day via its Lakehead pipeline system, up from 2.3M bbl/day a year earlier.
- ENB's Q1 results beat expectations on “stronger than expected contributions” from its liquids pipeline business, National Bank Financial says.
- ENB says it is slowly resuming operations after last week's fire-related shutdowns, which reduced deliveries from its regional oil sands pipelines ~900K bbl/day; while the company says it is too early to determine the financial impact of the shutdowns, it does not expect the disruption to have a significant effect on full-year results.
- ENB said yesterday that it restarted its 550K bbl/day Line 18 pipeline following last week's shutdown.
Thu, May 12, 7:08 AM
Wed, May 11, 12:10 PM
- Analysts say the recent spate of investments in renewable energy by the likes of Exxon Mobil (XOM -0.9%) and Total (TOT +0.5%) shows the supermajors recognize the potential for growth in low-carbon sources of energy, but it is too early to know if the moves represent a broader push by oil companies at large to diversify their clean energy holdings.
- XOM last week unveiled a partnership with FuelCell Energy (FCEL -0.9%) to cut the cost of cutting emissions from new and existing fossil fuel plants, Enbridge (ENB -0.5%) yesterday said it would pay $218M for stakes in offshore wind farms, while Total announced a $1.1B deal on Monday to buy battery maker Saft Groupe, complementing its 2011 purchase of a majority stake in solar-panel maker SunPower Corp.
- Oil companies are not the only traditional energy players pushing into clean power: France's Engie (OTCPK:ENGIY) said this week it was buying an 80% stake in California storage company Green Charge Networks.
- Still, the investments are tiny by petroleum industry standards: TOT’s $1.1B deal to buy Saft represents a tiny fraction of its $120B market value, and ENB’s $218M deal equals less than 1% of its 2015 revenue.
Tue, May 10, 7:25 PM
- Canadian oil sands companies near Fort McMurray are beginning to restart their operations, as the out of control wildfire continues to rage but has now moved far enough away from the oil sands' sites to allow the companies to return.
- Royal Dutch Shell (RDS.A, RDS.B) is the first company to resume its operation in the area, restarting production at its Albian mine, and Enbridge (NYSE:ENB) has begun inspecting its facilities and prepares to restart operations shuttered during the blaze.
- Suncor (NYSE:SU) says it has restarted power generation at its Syncrude oil sands mine in Aurora, and CEO Steve Williams says he expects oil sands companies would resume production “in the coming days and maybe a week or so, but you’re not talking longer periods.”
- Alberta Premier Notley says there was no damage to oil sands facilities north of Fort McMurray, although the fire caused minor damage to Nexen’s (NYSE:CEO) oil sands facility south of the city and to ENB’s above-ground facilities along its pipelines in the area.
- The decline to production reportedly reached at least 839K bbl/day, or close to one-third of Canada’s overall daily production, before Shell's restart.
- While ~2,400 homes and buildings were destroyed by fire, officials say ~90% of buildings in Fort McMurray, including schools and a hospital, remain intact; two people died in accidents related to evacuating the fires.
- Other relevant tickers: XOM, IMO, COP, OTCPK:HUSKF, OTCPK:ATHOF, CNQ, CVE, OTCPK:MEGEF, OTCPK:IPPLF, OTC:KEYUF, TRP, PSX, STO
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM
Tue, May 10, 7:58 AM
- Enbridge (ENB, EEP) agrees to acquire a 50% interest in Eolien Maritime France, a French offshore wind development company, from Dong Energy for C$282M.
- Enbridge and a subsidiary of Electricite de France will co-develop three large-scale offshore wind farms off the coast of France that would produce a combined 1,428 MW of power; development of the three projects is already underway, although construction is still subject to final investment decisions and regulatory approvals.
- The deal is ENB’s second investment in European offshore wind after buying a 25% stake in EON’s 400 MW Rampion project off the coast of Sussex, England, last year for C$750M.
Mon, May 9, 3:19 PM
- Crude oil prices erased all of Friday's gains and more, as June futures ended the pit session 2.7% lower to $43.55/barrel even as the massive wildfires in the heart of Canada's oil sands continue to spread, albeit more slowly.
- But positioning in the oil market is very stretched, and analysts say speculators already hold the largest number of wagers for a rise in WTI futures since last summer and near-record high bullish bets on Brent, so the scope for further gains was limited without more clarity on the extent of damage to oil facilities or supply outages.
- The sacking of Ali al-Naimi as head of Saudi Arabia’s oil ministry also may be a reason why oil prices failed to maintain early gains, as successor Khalid al-Falih, the former head of Aramco, is expected to follow the strategy of protecting the country’s market share.
- Yesterday, Cnooc’s Nexen (NYSE:CEO) operations to the south of Fort McMurray reportedly suffered minor damage, while Suncor (NYSE:SU) says its facilities have not been damaged and is beginning to implement a plan for a return to operations.
- Other relevant tickers: RDS.A, RDS.B, XOM, IMO, COP, OTCPK:HUSKF, OTCPK:ATHOF, CNQ, CVE, OTCPK:MEGEF, ENB, OTCPK:IPPLF, OTC:KEYUF, TRP, PSX, STO
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, UGA, USL, DNO, OLO, UHN, SZO, OLEM
- Now read Fort McMurray situation getting better - oil markets daily
Sat, May 7, 12:32 AM
- The devastating wildfires in and around Alberta's Fort McMurray may double in size to 2K sq. km over the weekend and burn for weeks, officials say.
- Bank of Montreal has cut its Q2 Canadian GDP growth estimate to zero from 1.5%, citing “severe disruptions to oil production” due to the fires, and said the estimate was just a placeholder dependent on more information on the scope of the disaster.
- Royal Bank of Canada estimates that as much as 1M bbls/day of production has been shut, or ~40% of oil sands output, as companies including Suncor (NYSE:SU), Shell (RDS.A, RDS.B), Exxon (NYSE:XOM) subsidiary Imperial Oil (NYSEMKT:IMO), ConocoPhillips (NYSE:COP), Husky Energy (OTCPK:HUSKF) and Athabasca Oil (OTCPK:ATHOF) cut production.
- The fire is said to be “at the gates” of Nexen’s (NYSE:CEO) Long Lake project, but a few companies including Canadian Natural Resources (NYSE:CNQ), Cenovus (NYSE:CVE) and MEG Energy (OTCPK:MEGEF) say their production has been unaffected so far.
- Among pipeline companies, no assets have incurred significant damage, but Enbridge (NYSE:ENB) shut all pipelines in and out of Cheecham Terminal, Inter Pipeline (OTCPK:IPPLF) shut parts of its system in the province, and Keyera's (OTC:KEYUF) South Cheecham rail and truck terminal is shut down; TransCanada (NYSE:TRP) says it does not expect the fires to affect deliveries of natural gas.
- SU, Phillips 66 (NYSE:PSX) and Statoil (NYSE:STO) have declared force majeure on supplies from the region.
Fri, May 6, 2:13 PM
- Enbridge (ENB +0.4%) asks Canada's National Energy Board for a three-year extension of its Northern Gateway project permit to continue talks with First Nations and other groups in British Columbia.
- ENB and 31 aboriginal equity partners say they need the additional time to secure legal and regulatory certainty.
- ENB is required to start construction by the end of this year as one of the 209 conditions attached to the 2014 federal approval of the project, but the project has faced opposition from communities along the Alberta-to-Kitimat route.
- Now read Enbridge's Northern Gateway may get second chance as Trudeau wavers
Thu, May 5, 6:38 PM
- Alberta's raging wildfire has caused Canadian crude oil output to drop by at least 475K bbl/day, or nearly 20% of Canada's 2.5M barrels in total oil sands production - much of it typically sent to U.S. refineries.
- While no oil operations have sustained damage from the fires, many operators have cut output amid evacuations of non-essential staff, pipeline outages and the risk from encroaching fire.
- The amount of daily oil production threatened by the Canadian fires would be enough to nearly wipe out the world's oversupply, says Tim Pickering of Auspice Capital Advisors, calling the blaze "the most important issue in oil today."
- The Bank of Nova Scotia says the destruction of property and loss of production could mean "very little" GDP growth during Q2 for the overall Canadian economy and that the damage to infrastructure will slow the recovery in the country's oil patch.
- In the latest of a series of plant closures, ConocoPhillips (NYSE:COP) today shut down its Surmont oil sands site that produces 50K bbl/day and evacuated all staff, and Suncor (NYSE:SU) cut output at its 350K bbl/day Syncrude mining operation and its 203K bbl/day Firebag well site without specifying how much.
- Other relevant tickers include: RDS.A, RDS.B, IMO, XOM, CNQ, ENB, PBA, CEO, OTCPK:HUSKF, OTCPK:IPPLF.
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM
Wed, May 4, 11:18 PM
- The huge wildfire (I, II) that already has forced more than 80K people to flee their homes in and around Fort McMurray and disrupted oil sands operations in Alberta reportedly is set to expand.
- Wildfire officials say the blaze probably will grow to 100 sq. km (40 sq. miles) from ~80 now, and that although lower temperatures may aid firefighters tomorrow, the fire is expected to last at least until the weekend.
- WTI crude oil prices have jumped past $45/bbl overnight as the fire disrupts oil sands production.
- Alberta oil sands producers are not yet in the fire's path but have cut or halted operations because of evacuations: Royal Dutch Shell’s (RDS.A, RDS.B) Canadian unit shut its Albian Sands mining operations which produce ~255K bbl/day, Suncor (NYSE:SU) cut production at all of its oil sands sites, Inter Pipeline (OTCPK:IPPLF) partially closed its 540K bbl/day Polaris pipeline system and its 346K bbl/day Corridor system, Husky Energy (OTCPK:HUSKF) cut output at its Sunrise oil sands plant by two-thirds to 10K bbl/day, Exxon’s (NYSE:XOM) Imperial Oil (NYSEMKT:IMO) Canadian unit says production has not yet been affected, and operations by Enbridge (NYSE:ENB), Pembina Pipeline (NYSE:PBA) and Canadian Natural Resources (NYSE:CNQ) apparently have not been affected.
- The inferno is shaping up to be worse than the Slave Lake fire of 2011, one of the most costly natural disasters in Canada’s history, and is a severe blow to an area already devastated by job losses stemming from low energy prices.
Enbridge, Inc. transports, generates and distributes energy in Canada and U.S. The company is involved in natural gas transmission and midstream businesses. It operates through five business segments: Liquids Pipelines, Gas Distribution, Gas Pipelines, Processing and Energy Services, Sponsored... More
Sector: Basic Materials
Industry: Oil & Gas Pipelines
Other News & PR