Wed, Oct. 7, 12:59 PM
- Enbridge (ENB +1.8%) plans to spend $38B through 2019 on new projects including liquids and natural gas lines, as well as power generation and gas processing, despite a "higher degree of risk," CEO Al Monaco tells investors.
- ENB is focusing on expanding “low-cost, incremental” projects such as twinning existing pipelines to provide producers with new transportation capacity as they struggle with low crude prices, Monaco says; its $7.5B Line 3 replacement is the largest project.
- ENB says it is performing early development work on a plan to twin Line 61 which runs from Superior, Wis., to Flanagan, Ill., as expansion of the Mainline system which carries crude from western Canada to Superior and may be increased by 800K bbl/day requires the Line 61 expansion to avoid a bottleneck.
Fri, Oct. 2, 12:34 PM
- The bloom is off the rose for energy MLPs, as the Alerian MLP index hit its lowest level in more than five years this week and is down 30% YTD, far underperforming other yield-oriented indexes such as the MSCI REIT Index, which is down only 6%.
- Negative sentiment around commodities has overwhelmed the old narrative that MLPs fund generous payouts from pipelines backed by fee-based contracts, unsullied by the vagaries of energy prices; even if price risk is mitigated, revenue still takes a hit when less oil or gas flows through a pipeline whether due to increased competition or less drilling.
- Meanwhile, with debt markets increasingly difficult for energy firms, more borrowing comes at a steep price; Enbridge Energy Partners (NYSE:EEP) yesterday closed on $1.6B of new bonds at what S&P called “some of the highest absolute costs in recent years for investment-grade funds."
- MLPs have not bottomed yet, says Cumberland Advisors, noting that banks soon will take a fresh look at the value of energy assets for the purpose of renewing credit lines, which could prompt a washout in the overall energy industry.
- MKM Partners‘ chief market technician Jonathan Krinsky is starting to find some "downside extremes," and says he's buying EPD, ENB, SE, MMP and CQP, but he's selling OKS, DPM, SMLP, GMLP and GLOG.
- Earlier: MLP investors, worried over Williams deal, head for the exits (Sept. 28)
- ETFs: AMLP, AMJ, KYN, MLPL, TYG, SRV, KYE, CEM, MLPI, NML, FEN, NTG, MLPA, KMF, EMLP, FMO, MLPN, SRF, FEI, JMF, CBA, MLPX, GMZ, EMO, MLPS, TTP, CTR, AMU, CEN, GER, AMZA, SMM, MIE, DSE, ENFR, FPL, ATMP, JMLP, MLPW
Thu, Oct. 1, 3:58 PM
- Canadian light synthetic crude and North Dakota Bakken crude for November delivery are rising sharply after Enbridge (ENB +0.4%) gained approval from regulators late yesterday to open its Line 9 crude pipeline.
- ENB has not said when the 300K bbl/day pipeline will start operating but traders say there is demand for light crude in anticipation of the line being filled in the next month or so.
- Light synthetic crude from the oil sands trades at ~$1/bbl above the WTI benchmark, up from $0.10/bbl below WTI yesterday, while Bakken crude delivered to Clearbrook, Minn., trades $0.70 below WTI, up $1.
- Suncor Energy (SU -0.6%), which owns a refinery in Quebec and is one of Line 9's biggest customers, and Valero Energy (VLO +3.6%), which also has a refinery in Quebec, are expected to benefit from being able to replace imported crude with cheaper inland barrels.
- The newly reversed Line 9 will ship mainly light inland crude from Sarnia, Ontario, to Montreal, after previously flowing in the opposite direction, taking imported crude to Ontario.
Tue, Sep. 29, 10:56 AM
- As major oil sands pipeline options drop away, Kinder Morgan’s (KMI -0.4%) Trans Mountain pipeline expansion has become the last big hope to open a new market for western Canadian oil in this decade, Financial Post's Claudia Cattaneo writes.
- With Enbridge’s (ENB -1%) proposed Northern Gateway stuck trying to increase aboriginal support in British Columbia, TransCanada’s (TRP +1.1%) Keystone XL expected to be rejected soon by the U.S., the start date for TRP’s Energy East proposal pushed back to 2020 at the earliest and a marine terminal at Cacouna, Que., cancelled, only the $5.4B Trans Mountain expansion remains on track for completion in 2018.
- The project is far from a slam dunk, embroiled in controversy due to worries about a spill and increased oil tanker traffic, and has become a big flashpoint in the upcoming federal election; reflecting the tension, the National Energy Board's review is taking longer than the legislated 15-month time limit.
- "People worried about Canada’s supposedly tarnished environmental reputation should consider the huge damage done to Canada as an investment destination due to endless and unpredictable regulatory reviews," Cattaneo writes.
Mon, Sep. 21, 10:09 AM
- A coalition of Canadian First Nations, environmentalists and companies including Suncor Energy (NYSE:SU) calls for industry and government to seek aboriginal consent when working with indigenous groups.
- The report from the Boreal Leadership Council says Canada's principle of free, prior and informed consent - the right of native people to offer or withhold consent to development that might impact their territories - is crucial to ensuring the country's vast natural resources can be extracted.
- Disputes with First Nations groups have contributed to delays on some major energy infrastructure projects, such as Enbridge's (NYSE:ENB) Northern Gateway pipeline to Canada's Pacific coast.
Mon, Sep. 14, 5:37 PM
- The Minnesota Court of Appeals reverses a regulator's decision to grant a certificate of need for Enbridge's (ENB, EEP) proposed Sandpiper oil pipeline, saying the state's public utilities commission must complete an environmental impact statement before the certificate can be issued.
- Minnesota regulators granted the certificate in June, saying the $2.6B, 610-mile pipeline from North Dakota's Bakken oil fields to Superior, Wis., was necessary and in the public interest, but the court said the certificate constituted a major governmental action, so state law requires the environmental impact statement be completed before that certificate is granted.
Thu, Sep. 3, 12:38 PM
- Holly Energy Partners (HEP +0.3%) agrees to acquire Enbridge’s (ENB +2.8%) 50% stake in the Frontier Pipeline for an undisclosed amount.
- The Frontier pipeline is a 296-mile crude oil route that runs from Casper, Wyo., to Frontier Station, Utah, and has a capacity of 72K bbl/day; the line brings Canadian and Rocky Mountain crude oils south to refineries in the Salt Lake City area.
- Plains All American (PAA +1.5%) owns the remaining 50% interest and will continue to operate the Frontier line.
Fri, Aug. 28, 2:28 PM
- Alberta's new government launches its royalty review panel, and says it will not raise oil and gas royalty rates until the end of 2016.
- The specter of a higher government take is spooking the industry, especially with oil prices recently hitting more than six-year lows; some have argued the royalty review should be deferred until the outlook improves, while others would prefer to just get it over with.
- Related tickers: SU, ENB, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
Fri, Aug. 14, 11:41 AM
- Moving oil and gas by pipeline was 4.5x safer than moving the same volume the same distance by rail in the decade ended in 2013 in Canada, according to a new study by the Fraser Institute.
- “I hope it becomes better understood that saying ‘No’ to a pipeline is saying ‘Yes’ to rail, and that is to increase the risk to the environment and human health and not decrease it,” says the study's lead author.
- Crude-by-rail shipments in North America have skyrocketed in recent years as rising volumes from Alberta oil sands and U.S. shale oil plays outstrip the capacity of current pipelines.
- Canadian producers have waited seven years for the approval of the Keystone XL pipeline (NYSE:TRP), but the author says the safety study has just as much application in considering the Trans Mountain (NYSE:KMI) and Northern Gateway (NYSE:ENB) projects to the Canadian west coast and the Energy East pipeline to access Canada's east coast.
Fri, Aug. 14, 10:37 AM
- The Alliance Pipeline, a natural gas conduit that runs from northeastern B.C. to the Chicago area, is back in service after a six-day outage following a release of hydrogen sulphide gas into the system resulted in a shutdown of the line.
- Natural gas processor and transporter Keyera (OTC:KEYUF) says an “operational upset” during maintenance at its Simonette plant in Alberta caused the problem.
- A number of western Canada producers had to suspend operations while the Alliance Pipeline, owned by an Enbridge (NYSE:ENB) affiliate and Veresen (OTC:FCGYF), was out of commission.
- The pipeline carries 1.6B cf/day of natural gas and ~20% of Canada’s net exports of natural gas to the U.S.
Thu, Aug. 13, 12:45 PM
- A key pipeline for delivering Canadian oil to the U.S. remains shut for a third day, leaving heavy crude stranded in Alberta and keeping its price in the cash market at ~$20 below the WTI benchmark.
- A small leak near Shelbina, Mo., coming from Enbridge’s (ENB -1.1%) Spearhead pipeline, which runs from Flanagan, Ill., to the Cushing, Okla., crude hub forced the shutdown Tuesday of the 193.3K bbl/day pipeline as well as a closing of the parallel Flanagan South pipeline, an even larger 585K bbl/day line that runs from Pontiac, Ill., to Cushing.
- ENB expects operations at Flanagan South to resume today, but does not know when Spearhead may return to service, as it continues to investigate the cause of the spill in Missouri.
- Operational problems at BP's (BP -1.5%) Whiting, Ind., refinery also keep the pressure on prices for Canada’s heavy crude as barrels continue to get backed up.
- Other related tickers: SU, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- Earlier: Canadian oil sands price nears $20/bbl, cut in half since July 1
Wed, Aug. 12, 12:27 PM
- Crude oil from Canada’s tar sands has slumped to $23/bbl, chopped in half since July 1 and widening its discount to West Texas Intermediate to nearly $20/bbl, due to a combination of steadily rising production, pipeline constraints and an unexpected outage at a U.S. refinery.
- The price plunge has done little to curb output because oil sands projects require years to plan, construct and pay back; Imperial Oil (NYSEMKT:IMO) recently doubled production capacity at its Kearl oil sands project to 220K bbl/day, and Canadian Natural Resources (NYSE:CNQ) last week said it was built to withstand low commodity prices even as it lost C$405M in Q2.
- At current oil prices, typical oil sands producers are just covering their operating costs, while companies with higher operating costs are “losing money with each barrel they’re producing," says the VP of energy research at ARC Financial in Calgary.
- The results have spilled beyond the oil market into Canada’s economy, forcing the central bank to twice cut interest rates, driving the Canadian dollar to a decade low and impacting the debate ahead of October's federal election.
- Other related tickers: TRP, ENB, SU, CVE, TCK, CEO, OTCPK:HUSKF
Fri, Jul. 31, 7:04 AM
Thu, Jul. 30, 5:30 PM
Tue, Jul. 28, 1:12 PM
- Canada oil sands pipeline projects look doomed after the recent Nexen oil spill leaves "two big football fields of black goo," according to a Bloomberg analysis.
- A rupture in a line operated by the Cnooc (NYSE:CEO) unit that spewed 31K barrels of bitumen, waste water and sand has ignited outrage from communities along pipeline routes and is strengthening opposition that already has stalled every major crude export project from Canada and may lead to stricter regulations, the report says.
- The Alberta Energy Regulator could consider new requirements including scheduled and random inspections of pipelines during construction and while in operation, as well as better spill detection technology; meanwhile, the spill gets bad press in Canadian newspapers every day.
- Related tickers: TRP, ENB, SU, IMO, CNQ, CVE, TCK, OTCPK:HUSKF, OTCQX:COSWF
Wed, Jul. 15, 7:45 PM
- Canada's National Energy Board concludes that Enbridge (NYSE:ENB) is operating safely, despite finding violations of rules designed to identify threats to the public and protect whistleblowers.
- While the report finds that ENB had failed to introduce an explicit policy to encourage employees to identify hazards, incidents and near-misses, it said the company's existing programs and processes are successful at protecting people, the environment and its pipelines.
- The comprehensive audit, which examined six areas of ENB's operations over a 15-month period, is conducted annually by the regulator.
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