May 7, 2014, 12:41 PM
- The price of crude from Alberta’s oil sands has surged nearly 60% since November, as new pipelines connect producers with refineries on the U.S. Gulf coast, meaning Canadian producers can begin to see a better return on investment while U.S. refineries can lessen their reliance on oil from Mexico and Venezuela.
- It also lessens the importance of the Keystone XL pipeline (TRP), WSJ's Ben Winkley writes, making it that much easier for the White House to delay a decision to clear the project.
- Traders say the current price gap of ~$20 between Alberta crude and benchmark WTI is about right, so with just a handful of refineries set up to receive tar sands crude, more transport capacity may not be needed, Winkley suggests.
- ETFs: USO, OIL, UCO, SCO, DTO, DBO, CRUD, USL, DNO, UWTI, DWTI, SZO, OLO, OLEM, TWTI
May 2, 2014, 12:59 PM
- TransCanada (TRP -0.4%) ticks lower even after reporting strong gains for adjusted Q1 earnings, cash flow and revenue as harsh winter weather conditions helped pipeline demand.
- TRP attributes the gains to higher earnings from its NGTL System, Keystone, Bruce Power, U.S. power, and natural gas storage operations.
- TRP says it expects to place ~C$3.6B of assets into service this year, including its recently completed 485-mile extension of its Keystone pipeline system from Cushing, Okla., to the U.S. Gulf coast.
- Meanwhile, Natural Resources Minister Greg Rickford says Canada is not considering a NAFTA challenge after the U.S. delayed its decision on approving Keystone XL (earlier).
May 2, 2014, 9:22 AM
May 2, 2014, 8:32 AM
May 1, 2014, 5:30 PM
May 1, 2014, 2:18 PM
- Fifty-six U.S. senators - all 45 Republicans in the chamber and 11 Democrats - have introduced legislation that would provide immediate congressional approval of the stalled Keystone XL pipeline (TRP +0.3%) project
- It remains unclear whether the bill would even get a vote in the Senate, where 60 votes are needed to clear procedural hurdles against legislation.
Apr. 30, 2014, 7:35 PM
- While Pres. Obama seeks to delay a decision on the Keystone XL pipeline until after the November midterm elections, Canada's government reportedly is considering launching a challenge under NAFTA.
- The government, acting alone or with TransCanada (TRP) and perhaps pipeline shippers, is said to be weighing its legal options for challenging the U.S. handling of the pipeline. but no decision has been made on how to proceed.
- Unlike other cross-border pipelines, whose approvals were given in a short time, TRP could make the case that Keystone is being treated differently than comparable pipeline applications and denying it "fair and equitable treatment" under NAFTA, according to a leading international trade lawyer.
Apr. 30, 2014, 2:49 PM
- Royal Dutch Shell (RDS.A +3%) is raising its stake in the proposed Canada LNG project on British Columbia's coast at Kitimat to 50% after two of the Asian partners pared their interests.
- Mitsubishi and Korea Gas had each owned 20%, and they now own 15% each, while PetroChina (PTR) maintains its 20% interest; Shell had owned 40%.
- Shell says early engineering work on the multi-billion dollar project is set to begin and would take up to two years to complete, but a final investment decision is still months away; it is partnering with TransCanada (TRP) on a proposed pipeline to carry gas to the coast.
- LNG Canada is designed to process 1.7B cf/day of gas in its first phase.
Apr. 28, 2014, 7:15 PM
- A U.S. Senate vote on the Keystone XL pipeline (TRP) as soon as next week reportedly is under discussion by top Democrats, who are weighing the political implications of holding a vote on approval of the controversial pipeline in defiance of Pres. Obama.
- A vote on Keystone may offer a strong boost to red-state Democrats in tough races this fall, allowing them to be seen as defying the White House in support of a project viewed favorably back home.
- An aide to Louisiana Sen. Landrieu, the new Senate Energy Committee chair who has frequently criticized Obama for delaying a decision on Keystone, says she will push for a binding vote to approve the project.
Apr. 23, 2014, 11:36 AM
- The latest Keystone XL delay is having an unintended consequence: the revival of the effort in Congress to bypass the White House by forcing approval of the project.
- Forcing approval would be difficult; Senate backers admit they still are a few votes short of the 60 needed to advance the bill, two-thirds of the Senate - 67 members - would be needed to override a likely presidential veto, and Senate Majority Leader Harry Reid so far has declined to bring up legislation that could embarrass Pres. Obama on Keystone (TRP).
- But the oil isn't going to stay in the ground, and transporting oil by rail has more than doubled in the last three years; at the NTSB's Rail Safety Forum this week, regulators and industry reps are discussing everything from tank-car design to emergency response planning.
Apr. 22, 2014, 7:21 PM
- Alaska’s legislature has approved Gov. Parnell’s plan to join four energy companies - XOM, BP, COP and TRP - in moving ahead on plans to build infrastructure to transport and market 35T cf of North Slope gas to be shipped by an 800-mile pipeline to a liquefied natural gas export plant.
- If the $45B-$65B project comes to fruition, gas could hit local and foreign markets in the mid-2020s, according to the state’s projections.
- The state would retain ownership of 25% of the LNG plant, which is planned at Nikiski in south central Alaska.
Apr. 22, 2014, 10:42 AM
- A court challenge holding up the Keystone XL (TRP +0.6%) pipeline should be dismissed, Nebraska Gov. Dave Heineman says as he asks the state’s top court to throw out a trial judge’s February ruling that the route for the pipeline was approved without proper authority.
- The Nebraska Supreme Court may not hear the case until at least September and probably will not rule until after November's congressional elections; if the court upholds the trial outcome, Keystone would need to apply to the state’s Public Service Commission for approval in a process that could take as much as seven months.
- The trial judge erred in allowing a challenge by three property owners to move forward because they hadn’t shown they had been injured as taxpayers by the state’s plan, the governor said in a court filing yesterday.
Apr. 21, 2014, 11:22 AM
- TransCanada (TRP -3.6%) shares suffer their biggest loss in more than two years after the Obama administration delays making a recommendation on the Keystone XL pipeline until legal questions about the way the route was approved through Nebraska are resolved - which could extend into next year.
- Morningstar's David McColl says the delay will raise the costs to build the pipeline, though probably not enough to kill it.
- While RBC Capital continues to believe the project has a present value of ~$5/share, the firm notes it included only half that value ($2.50/share) in its valuation and believes the market has ascribed even less value; as such, despite some downward pressure on the share price, the weakness should not be material (Briefing.com).
Apr. 19, 2014, 12:05 AM
- The Obama administration is indefinitely extending its review of the Keystone XL pipeline (TRP), probably delaying a decision on the project until after November's U.S. midterm elections.
- The State Department - which has had the project under review for nearly six years - says it needs more time to prepare its recommendation to Pres. Obama because of ongoing litigation in Nebraska that is unlikely to be resolved before next year; the department was set to close a review process with eight other federal agencies on May 7.
- Pipeline supporters are criticizing the delay as a political ploy, but the move looks likely to keep environmental activist money flowing into the election races; billionaire Tom Steyer, who has pledged to spend $100M to support candidates who back strong policies to fight climate change, is praising the delay as "good news."
- ETFs: XLE, ERX, OIH, VDE, ERY, DIG, DUG, IYE, PXJ, PXI, PSCE, FENY, FXN, RYE, DDG
Apr. 16, 2014, 10:48 AM
- Alberta looks likely to implement energy efficiency measures when it revamps its climate-change policy to win support for its oil sector, an about-face on the former premier’s vow that the province wouldn’t enact new rules until the U.S. did.
- The province plans to have new regulations on emissions in the near future and may include a higher carbon price, Alberta's environment minister says.
- The struggle by Alberta’s oil producers for access to new markets, as reflected in U.S. delays in approving the Keystone XL (TRP) pipeline, comes amid opposition to oil sands bitumen because of its higher carbon intensity and concerns around air and water pollution.
- Relevant companies include ECA, ENB, EEP, STO, XOM, IMO, SU, CVE, PGH, BP, CNQ, BTE, DVN, IVAN, AAV, RDS.A, RDS.B, PTR, ATHOF
Apr. 11, 2014, 2:34 PM
- "The best MLP you've never heard of" is Niska Gas Storage Partners (NKA +3.5%), according to a favorable profile by StreetAuthority's Daniel Cross, who says NKA stands out with a price-to-free cash flow ratio of ~14 while vs. a negative average for the industry, and a 9.6% dividend yield.
- This strength gives NKA the ability to make acquisitions and capital expenditures to grow at a much faster pace than other utility companies, Cross writes.
- Competitors such as Buckeye Partners (BPL) and TransCanada (TRP) also should also benefit from the rising tide in natural gas production since both companies trade at roughly NKA's P/E, but neither offers NKA's potential for double digit growth, according to Cross.
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