Some good news for a change. KXL to get built !!

[alpinebeers]

TC Energy commits to building KXL !!

https://business.financialpost.com/commodities/energy/tc-energy-to-proceed-with-keystone-xl-pipeline-after-1-5b-investment-from-alberta-government

[zabbo]

Just a thought, but have you checked the price of Western Canadian Select in the last couple days? Opened at $4.69 / bbl this morning. At that price, better off to leave it in the ground. :thinking-006: :scared0018:

[alpinebeers]

Just a thought, but have you checked the price of Western Canadian Select in the last couple days? Opened at $4.69 / bbl this morning. At that price, better off to leave it in the ground. :thinking-006: :scared0018:

Good point, why bother looking to the future :thinking-006::snapoutofit:

[zabbo]

Good point, why bother looking to the future :thinking-006::snapoutofit:

Be looking a long way into the future before any pipeline will be doing Alberta any good. Even before the corona mess the oil business here was in the crapper. International issues and a very hostile federal government. Internationally things may improve. Apparently the States is getting involved in the Saudi-Russia scrap. Might help to some extent. Last thing in the world the turd cares about right now is the canadian and especially the Alberta oil industry! The truth reallllly sucks! :)

[alpinebeers]

Be looking a long way into the future before any pipeline will be doing Alberta any good. Even before the corona mess the oil business here was in the crapper. International issues and a very hostile federal government. Internationally things may improve. Apparently the States is getting involved in the Saudi-Russia scrap. Might help to some extent. Last thing in the world the turd cares about right now is the canadian and especially the Alberta oil industry! The truth reallllly sucks! :)

Truth???

Your truth is a far cry from reality. To imply that creating crude oil takeaway in Alberta is a bad thing is ludicrous. Trudeau will have no say in this project now and once its built it will be filled with more Alberta crude hitting the international market which will close the gap in the price we receive.

This is a huge win for Alberta and Canada

[Drewski Canuck]

You're kidding when you say that more Alberta Crude will hit the INTERNATIONAL Market and the differential will disappear.

Since when is the US INTERNATIONAL???? This is the same pipeline hub that will still take Western Canadian Select to the Gulf Coast refineries. If you look REAL CAREFULLY where the TC Keystone XL connects to, on a US MAP, you just might figure out, (but you know what, I really doubt your appreciation of Geography so I will give you a hint)

You Just Might Figure Out that the Nebraska hub, (wait for it!!!!))

IS IN THE MIDDLE OF THE USA!!

However, if we had a pipeline to TIDEWATER, we could sell very heavy grades of crude to the world market, at international prices.

That means no differential as heavy crude is in demand for such things as road paving.

The sad part is again, Canada benefits and Alberta pays for it.

However, I do agree that the best time to get the Feds to reverse their position on the Northern Gateway line to Prince Rupert is now when the Country, and the First Nations, need the economic benefits the most.

Even Justin Trudeau realizes that he will need all the economic activity Canada can muster (THAT MEANS ANY WAY TO RAISE TAX REVENUE) to pay the bill after the Pandemic is over.

Drewski

[sns2]

Be looking a long way into the future before any pipeline will be doing Alberta any good. Even before the corona mess the oil business here was in the crapper. International issues and a very hostile federal government. Internationally things may improve. Apparently the States is getting involved in the Saudi-Russia scrap. Might help to some extent. Last thing in the world the turd cares about right now is the canadian and especially the Alberta oil industry! The truth reallllly sucks! :)

Wow. Don't be a killjoy.

[zabbo]

Truth???

Your truth is a far cry from reality. To imply that creating crude oil takeaway in Alberta is a bad thing is ludicrous. Trudeau will have no say in this project now and once its built it will be filled with more Alberta crude hitting the international market which will close the gap in the price we receive.

This is a huge win for Alberta and Canada

Hope you are right! :)

Not betting on it though.

[alpinebeers]

You're kidding when you say that more Alberta Crude will hit the INTERNATIONAL Market and the differential will disappear.

Since when is the US INTERNATIONAL???? This is the same pipeline hub that will still take Western Canadian Select to the Gulf Coast refineries. If you look REAL CAREFULLY where the TC Keystone XL connects to, on a US MAP, you just might figure out, (but you know what, I really doubt your appreciation of Geography so I will give you a hint)

You Just Might Figure Out that the Nebraska hub, (wait for it!!!!))

IS IN THE MIDDLE OF THE USA!!

However, if we had a pipeline to TIDEWATER, we could sell very heavy grades of crude to the world market, at international prices.

That means no differential as heavy crude is in demand for such things as road paving.

The sad part is again, Canada benefits and Alberta pays for it.

However, I do agree that the best time to get the Feds to reverse their position on the Northern Gateway line to Prince Rupert is now when the Country, and the First Nations, need the economic benefits the most.

Even Justin Trudeau realizes that he will need all the economic activity Canada can muster (THAT MEANS ANY WAY TO RAISE TAX REVENUE) to pay the bill after the Pandemic is over.

Drewski

Wow i'm not sure if your serious or not. KXL will take AB to tide water in the gulf coast and yes some will supply those refiners but a lot of it will be exported. Where do you think this pipeline ends? Im guessing you should know based on your ignorant comment about Geography above but again its hard to tell.

[zabbo]

Wow i'm not sure if your serious or not. KXL will take AB to tide water in the gulf coast and yes some will supply those refiners but a lot of it will be exported. Where do you think this pipeline ends? Im guessing you should know based on your ignorant comment about Geography above but again its hard to tell.

You are correct when you say a lot of oil from XL will be exported from the US. Problem is, the US will pay Alberta/canada $4 /bbl and sell it on the world market at a huge profit. That has already been happening with the current keystone pipeline. Not a bad deal for just showing up! Well, as long as you're not canada or Alberta.

Truth getting in the way again! :)

Wow! Glad my 14 days of isolation are done tomorrow. I can go out to the grocery store for some real excitement. :sHa_shakeshout:

[Big Grey Wolf]

Guys Gateway would be a much better pipeline for Alberta to get world oil prices. However I am happy we at least are getting increased pipeline capacity even if it goes to them Americans. The last export agreement that Trump signed with China included both soya beans for farmers and $52.4 billion of cheap Alberta bitumen.

[hal53]

You're kidding when you say that more Alberta Crude will hit the INTERNATIONAL Market and the differential will disappear.

Since when is the US INTERNATIONAL???? This is the same pipeline hub that will still take Western Canadian Select to the Gulf Coast refineries. If you look REAL CAREFULLY where the TC Keystone XL connects to, on a US MAP, you just might figure out, (but you know what, I really doubt your appreciation of Geography so I will give you a hint)

You Just Might Figure Out that the Nebraska hub, (wait for it!!!!))

IS IN THE MIDDLE OF THE USA!!

However, if we had a pipeline to TIDEWATER, we could sell very heavy grades of crude to the world market, at international prices.

That means no differential as heavy crude is in demand for such things as road paving.

The sad part is again, Canada benefits and Alberta pays for it.

However, I do agree that the best time to get the Feds to reverse their position on the Northern Gateway line to Prince Rupert is now when the Country, and the First Nations, need the economic benefits the most.

Even Justin Trudeau realizes that he will need all the economic activity Canada can muster (THAT MEANS ANY WAY TO RAISE TAX REVENUE) to pay the bill after the Pandemic is over.

Drewski
Uh...the whole reason behind KXL was to ship the oilsands oil to the Texas refineries that could handle it and return the diluent to Ab.

[alpinebeers]

You are correct when you say a lot of oil from XL will be exported from the US. Problem is, the US will pay Alberta/canada $4 /bbl and sell it on the world market at a huge profit. That has already been happening with the current keystone pipeline. Not a bad deal for just showing up! Well, as long as you're not canada or Alberta.

Truth getting in the way again! :)

Wow! Glad my 14 days of isolation are done tomorrow. I can go out to the grocery store for some real excitement. :sHa_shakeshout:

Its your knowledge of crude pricing that is getting in the way unfortunately :bad_boys_20:

[mac1983]

What better time to build it materials, labor, about everything going into the project will be at all time lows price wise. Obvious to everyone we need every source of revenue going to recover from this pandemic/depression so very little opposition to any projects right now. Plus with absolutely no money going into the oil and gas industry that means depletion, so when the economy picks up look out the price of oil is going to skyrocket. Let's build Northern Gateway and Energy East pronto while it's slow.

[NCC]

You are correct when you say a lot of oil from XL will be exported from the US. Problem is, the US will pay Alberta/canada $4 /bbl and sell it on the world market at a huge profit. That has already been happening with the current keystone pipeline. Not a bad deal for just showing up! Well, as long as you're not canada or Alberta.

Truth getting in the way again! :)

Wow! Glad my 14 days of isolation are done tomorrow. I can go out to the grocery store for some real excitement. :sHa_shakeshout:

If oil stays at $4/bbl, the pipelines will all be empty. I hope all of the refineries are making huge profits as that means they can pay more for crude, but the Redwater upgrader is proving that there's not much money in refineries.

[CaberTosser]

Regardless of current market conditions, it will represent some jobs in a time when those are getting in short supply. That's a good thing. I agree that it just increases capacity to out monopoly customer, and I'd prefer lines to both Canadian coasts first, but far be it from me to suggest not going ahead with it.

[Bigwoodsman]

Wow i'm not sure if your serious or not. KXL will take AB to tide water in the gulf coast and yes some will supply those refiners but a lot of it will be exported. Where do you think this pipeline ends? Im guessing you should know based on your ignorant comment about Geography above but again its hard to tell.

No it won’t. This pipeline will only feed American refineries. Trump wins this one.

BW

[Bigwoodsman]

Regardless of current market conditions, it will represent some jobs in a time when those are getting in short supply. That's a good thing. I agree that it just increases capacity to out monopoly customer, and I'd prefer lines to both Canadian coasts first, but far be it from me to suggest not going ahead with it.

Agreed!

BW

[Bigwoodsman]

If you want to increase the price of WCS crude. Put a 500% tax on all foreign oil and energy supplies.

Canada has never had a leader with big enough balls to do so!

BW

[hal53]

If you want to increase the price of WCS crude. Put a 500% tax on all foreign oil and energy supplies.

Canada has never had a leader with big enough balls to do so!

BW
Brilliant idea!!!!….nobody would think to return the favor...would they?????

[Selkirk]

TC Energy commits to building KXL !!

https://business.financialpost.com/commodities/energy/tc-energy-to-proceed-with-keystone-xl-pipeline-after-1-5b-investment-from-alberta-government




In the long-run, a good thing for sure ❗

But the down-side, is that it took 'Over A Billion Tax-Payer Dollars', to Finally make it happen. :(


Selkirk

[zabbo]

Its your knowledge of crude pricing that is getting in the way unfortunately :bad_boys_20:

Maybe you could splain to me how I have it so wrong??

In the last couple years there have been many oil companies pull out of canada. Encana to name one. Now they are called Ovintiv I believe. Last I heard their stock is in the toilet. Many others have seen the writing on the wall, and moved on as well. Suncor just shut down part of it's Fort Hills mine. Warren Buffet pulled four billion out of " shudder" the qeeeebc LNG pipeline. (Funny, never heard a word from the turd.) Why, because it's impossible to get anything done in canada. We just got back from Mexico two weeks ago. Went with another couple. He is an executive at an oil company downtown. Don't cheer yet . Most, if not all their plays are foreign. Anyway he has two oil related degrees. Geology and geophysics. Took a pay cut last year. No idea how much. No clue what his remuneration is, but when he got back he he was hammered with another 40% pay cut. A buddy of mine, "was" working at Suncor firebag. Spent a few years there myself. Anyway, the project he was on is shut own indefinitely. Basically essential personnel only on site. He scrambled and found something to do with gas in G P. Not sure how long it will last. I know a few other people from the oil industry that are unemployed and don't know when or even if, they are ever going back to work. These are canada only things. Internationally, the corona thing is putting a huge stomp on demand. Far fewer planes in the air, cruise ships (they burn huge amounts of fuel), are being docked and mothballed all over the planet. One bright spot, gas is cheap, but nobody can afford to go anywhere. Morning traffic reports, the cameras have to look real hard to find a vehicle. As requested, maybe you can splain to me who is going to purchase the oil KXL will deliver. Bear in mind, there is lots of cheap, light, sweet, easily refined crude out there. The corona thing won't last forever, but the damage done could last a long time. Governments all over the world are spending billions of dollars they don't have.

Your ball. :)

[CaberTosser]

In the long-run, a good thing for sure ❗

But the down-side, is that it took 'Over A Billion Tax-Payer Dollars', to Finally make it happen. :(


Selkirk


On the other hand, under current conditions it can be built rather inexpensively. The cost of steel I s down, fuel costs are down, excellent access to labor.. There’s definitely worse times to be building in terms of cost.

Do industrial workers now have to fill out for Covid hazards on their FLHA’s every single day?

[alpinebeers]

Maybe you could splain to me how I have it so wrong??

In the last couple years there have been many oil companies pull out of canada. Encana to name one. Now they are called Ovintiv I believe. Last I heard their stock is in the toilet. Many others have seen the writing on the wall, and moved on as well. Suncor just shut down part of it's Fort Hills mine. Warren Buffet pulled four billion out of " shudder" the qeeeebc LNG pipeline. (Funny, never heard a word from the turd.) Why, because it's impossible to get anything done in canada. We just got back from Mexico two weeks ago. Went with another couple. He is an executive at an oil company downtown. Don't cheer yet . Most, if not all their plays are foreign. Anyway he has two oil related degrees. Geology and geophysics. Took a pay cut last year. No idea how much. No clue what his remuneration is, but when he got back he he was hammered with another 40% pay cut. A buddy of mine, "was" working at Suncor firebag. Spent a few years there myself. Anyway, the project he was on is shut own indefinitely. Basically essential personnel only on site. He scrambled and found something to do with gas in G P. Not sure how long it will last. I know a few other people from the oil industry that are unemployed and don't know when or even if, they are ever going back to work. These are canada only things. Internationally, the corona thing is putting a huge stomp on demand. Far fewer planes in the air, cruise ships (they burn huge amounts of fuel), are being docked and mothballed all over the planet. One bright spot, gas is cheap, but nobody can afford to go anywhere. Morning traffic reports, the cameras have to look real hard to find a vehicle. As requested, maybe you can splain to me who is going to purchase the oil KXL will deliver. Bear in mind, there is lots of cheap, light, sweet, easily refined crude out there. The corona thing won't last forever, but the damage done could last a long time. Governments all over the world are spending billions of dollars they don't have.

Your ball. :)


Ill do my best to splain (what are you 5?) my side to you ????


Do you believe we will be in this environment when this pipe is completed? I would wager that the half a dozen or so oil executives that signed off to fill this pipe believe there is a need for it in two years. Not to mention the Canadian Company willing to invest another 10 billion dollars in it.

Sure your 100% right we are in tough times right now but please explain to me how your negativity towards this project is warranted. Do you think this is bad deal for Alberta and Canada? Do you think it will impact us negatively? If so how?

I see the glass as half full and this is a major win for our Country and the Oil industry in Alberta.

[CaberTosser]

In the depression of the 1930’s there were some great infrastructure projects undertaken, anyone ever hear of the Grand Coulee Dam? Hoover Dam? These projects had their detractors that noted there was no market for the power they’d generate, or the irrigation & water they would provide to millions.

Soon we’ll be in an economic position where it might be the ideal time to undertake any big infrastructure project proposed, just like in the Great Depression. Fuel and materials will be cheap and abundant labor will be at the ready.

[zabbo]

Ill do my best to splain (what are you 5?) my side to you ????


Do you believe we will be in this environment when this pipe is completed? I would wager that the half a dozen or so oil executives that signed off to fill this pipe believe there is a need for it in two years. Not to mention the Canadian Company willing to invest another 10 billion dollars in it.

Sure your 100% right we are in tough times right now but please explain to me how your negativity towards this project is warranted. Do you think this is bad deal for Alberta and Canada? Do you think it will impact us negatively? If so how?

I see the glass as half full and this is a major win for our Country and the Oil industry in Alberta.

Wow. I was really looking forward to your "explanation" regarding how world crude prices work. Anyway I don't believe I said this is a bad deal for canada or Alberta. At this point I don't see any reason to be popping Champagne corks. Too bad it wasn't completed ten years ago. Even five would have been nice. As I said, canada and Alberta will still be selling oil at cut rate prices to the US. They will export it at world prices and make great profit just for being there. Trump has already made a deal to export oil to China. Northern Gateway, Energy East or TMX would be a whole lot bigger reason to be excited. Bad enough that world oil prices are in the toilet, but we have a federal government that is determined to complete his ancestors (father's) dream of destroying the Alberta oil industry. This corona thing has just gotten started and likely to get much worse before it gets better. The economic / financial fall out will last far longer. If I was to "wager" I'd be thinking a lot more than two years. I truly hope your major win for canada's/Alberta's oil industry is right. Like I said before, I wouldn't "wager" on it! :)

[Bigwoodsman]

Brilliant idea!!!!….nobody would think to return the favor...would they?????

How much oil is Canada exporting to Venezuela or Saudi Arabia or any of those that Canada imports oil from?

BW

[Drewski Canuck]

Alpinebeers,

You bet I am sarcastic and if that offends you, too bad. How many families have you seen destroyed in Alberta since the 2014 oil crash? If you have seen what I have seen, you would be as sarcastic as me.

You see, I am so vicious because I care about my family in Alberta, and all the other families in Alberta, who will be paying for Trudeau's abuse of the West for Decades.

If you have any pull to get the North West Coast line built, use it and quit with your naïve comments.

If you think that Alberta will get International price IFFF any of our oil gets loaded from the Gulf Coast, we will not see one nickel of benefit for the price. The Oil is US Oil the second it crosses the border, and it will be the US purchasers who will take the profit, not Alberta producers.

Do you finally get the point of my post?

If JT is your Brother, or you are JT, grab a brain and get the Northern Gateway line built while we have the chance to get it done with no opposition.

Now that the Hereditary Chief / Non Hereditary Chief has testified in the House of Commons that the Government of Canada was played by self interested con artists playing the FN Monarchy card, we can move forward.

With support of all the stake holders on the route to Prince Rupert, Alberta can safely sell its Oil to the World Market for a change, without US exploitation.

Call it Job Creation, call it Nation building, call it a Tax Windfall (Liberals love to spend tax money) but get the Northern Gateway Line built now. It is the only hope to get a fair price for Alberta Oil. Keystone XL is just an extension of the give away to the US.

Drewski

[RandyBoBandy]

Alpinebeers,

You bet I am sarcastic and if that offends you, too bad. How many families have you seen destroyed in Alberta since the 2014 oil crash? If you have seen what I have seen, you would be as sarcastic as me.

You see, I am so vicious because I care about my family in Alberta, and all the other families in Alberta, who will be paying for Trudeau's abuse of the West for Decades.

If you have any pull to get the North West Coast line built, use it and quit with your naïve comments.

If you think that Alberta will get International price IFFF any of our oil gets loaded from the Gulf Coast, we will not see one nickel of benefit for the price. The Oil is US Oil the second it crosses the border, and it will be the US purchasers who will take the profit, not Alberta producers.

Do you finally get the point of my post?

If JT is your Brother, or you are JT, grab a brain and get the Northern Gateway line built while we have the chance to get it done with no opposition.

Now that the Hereditary Chief / Non Hereditary Chief has testified in the House of Commons that the Government of Canada was played by self interested con artists playing the FN Monarchy card, we can move forward.

With support of all the stake holders on the route to Prince Rupert, Alberta can safely sell its Oil to the World Market for a change, without US exploitation.

Call it Job Creation, call it Nation building, call it a Tax Windfall (Liberals love to spend tax money) but get the Northern Gateway Line built now. It is the only hope to get a fair price for Alberta Oil. Keystone XL is just an extension of the give away to the US.

Drewski

:happy0034::happy0034:

[Bigwoodsman]

Alpinebeers,

You bet I am sarcastic and if that offends you, too bad. How many families have you seen destroyed in Alberta since the 2014 oil crash? If you have seen what I have seen, you would be as sarcastic as me.

You see, I am so vicious because I care about my family in Alberta, and all the other families in Alberta, who will be paying for Trudeau's abuse of the West for Decades.

If you have any pull to get the North West Coast line built, use it and quit with your naïve comments.

If you think that Alberta will get International price IFFF any of our oil gets loaded from the Gulf Coast, we will not see one nickel of benefit for the price. The Oil is US Oil the second it crosses the border, and it will be the US purchasers who will take the profit, not Alberta producers.

Do you finally get the point of my post?

If JT is your Brother, or you are JT, grab a brain and get the Northern Gateway line built while we have the chance to get it done with no opposition.

Now that the Hereditary Chief / Non Hereditary Chief has testified in the House of Commons that the Government of Canada was played by self interested con artists playing the FN Monarchy card, we can move forward.

With support of all the stake holders on the route to Prince Rupert, Alberta can safely sell its Oil to the World Market for a change, without US exploitation.

Call it Job Creation, call it Nation building, call it a Tax Windfall (Liberals love to spend tax money) but get the Northern Gateway Line built now. It is the only hope to get a fair price for Alberta Oil. Keystone XL is just an extension of the give away to the US.

Drewski

Amen!!

BW

[sjemac]

Lay of 20,000 that were working. Then announce an approval of nobody who will be working anytime soon. Rolly Polly Ollie is still selling used cars.

[Abe Johnsen]

We were all p!ssed when skippy bought a pipeline to nowhere, but now what 7 billion imaginary $ for a pipeline going south ? Where we’re going to be bent over for every barrel? It’s beyond stupid for government to get more involved then the regulatory process, let the private sector run the business side . A complete cluster f .. one customer that always works right


Sent from my iPhone using Tapatalk

[OL_JR]

I get a kick out of the shortsightedness of people. It wasn't that long ago that the energy prophets were preaching that we were running out of oil. It will never go below $100 a barrell again. Fill up soon as gas will be $2.00 a litre before you know it.

It's been ****ty, I get it. I work in the energy industry and trust me the higher ups have been doing there due diligence in using the mantra to fill their boots so to speak.

We are in a dip right now but global demand in the long term will keep climbing and this pipeline is a good thing. No better time to build it.

[flyrodfisher]

We are in a dip right now but global demand in the long term will keep climbing and this pipeline is a good thing. No better time to build it.

I'm torn on this one.
It may be a good time to build it....but...it may be sitting empty for some time.

For example; https://ca.finance.yahoo.com/news/canadian-crude-cheap-costs-more-203212801.html

From the above link;
"Canadian heavy crude has become so cheap that the cost of shipping it to refineries exceeds the value of the oil itself, a situation that may result in even more oil-sands producers shutting operations."

"Enbridge charges between about $7 to a little over $9 a barrel to ship heavy oil to Texas, excluding additional charges such as for power, according to tariff documents."

[alpinebeers]

Alpinebeers,

You bet I am sarcastic and if that offends you, too bad. How many families have you seen destroyed in Alberta since the 2014 oil crash? If you have seen what I have seen, you would be as sarcastic as me.

You see, I am so vicious because I care about my family in Alberta, and all the other families in Alberta, who will be paying for Trudeau's abuse of the West for Decades.

If you have any pull to get the North West Coast line built, use it and quit with your naïve comments.

If you think that Alberta will get International price IFFF any of our oil gets loaded from the Gulf Coast, we will not see one nickel of benefit for the price. The Oil is US Oil the second it crosses the border, and it will be the US purchasers who will take the profit, not Alberta producers.

Do you finally get the point of my post?

If JT is your Brother, or you are JT, grab a brain and get the Northern Gateway line built while we have the chance to get it done with no opposition.

Now that the Hereditary Chief / Non Hereditary Chief has testified in the House of Commons that the Government of Canada was played by self interested con artists playing the FN Monarchy card, we can move forward.

With support of all the stake holders on the route to Prince Rupert, Alberta can safely sell its Oil to the World Market for a change, without US exploitation.

Call it Job Creation, call it Nation building, call it a Tax Windfall (Liberals love to spend tax money) but get the Northern Gateway Line built now. It is the only hope to get a fair price for Alberta Oil. Keystone XL is just an extension of the give away to the US.

Drewski


All I got from this message is you have some serious anger issues.

No one is going to tell me that getting more crude of of Alberta is a bad thing I’m sorry.

Some people will look for anything to complain about it seems.


Sent from my iPhone using Tapatalk

[Smoky buck]

It is good long term to get this pipeline built but short term with oil prices it’s not going to boost the oil industry. Like others have mentioned this will not improve the price Canada gets for oil because it is still selling to the US market. This only creates a more efficient and safer way to increase the amount of oil we can ship to that market.

I won’t be jumping for joy thinking this pipeline will solve a thing but I see potential for when oil prices improve. The problem is when will oil prices reach a level that it is profitable to utilize this pipeline?

[Penner]

We currently have a -300k BBL per day pipeline deficit. Trans Mountain if ever built is ~900k BBL per day which replaces the existing ~300k BBL per day line. At current production capacity, 1/2 of Trans Mountain capacity is already spoken for (should sneak a second line in there while the trench is open). Pushing XL will open up additional capacity (~800k BBL) which will eliminate one issue that currently exists with regards to investing in the Alberta oil patch which is having the ability to get product to market regardless of where that market is. Certainly an Energy East or Northern Gateway would be have preferred but next to zero chance those ever happens due to the social ideologies that unfortunately exist in our World today. And the US is the biggest consumer of Oil today (almost twice that of China) so no better customer than that.

FYI most major producers in Alberta sell synthetic blended crude which does not sell at WCS, it sells closer to WTI and for certain blends, even higher. This is why when the NDP cut production a few years back there was backlash in the industry as it hurt more producers then it helped. Also note as the price per BBL is depressed the price for diluent is also depressed helping to reduce production costs to some extent.

End of day Kudos on the investment and getting this P/L going. End of day just need the Republicans to get another term or kiss the $1B goodbye... guess I’m saying we need Trump for 4 more years (and that just feels so wrong for some reason). End of day we need to plan for the future as failing to plan today is planning to fail tomorrow whether that be 5 weeks, 5 months, or 5 years from now.

[zabbo]

Ill do my best to splain (what are you 5?) my side to you ????


Do you believe we will be in this environment when this pipe is completed? I would wager that the half a dozen or so oil executives that signed off to fill this pipe believe there is a need for it in two years. Not to mention the Canadian Company willing to invest another 10 billion dollars in it.

Sure your 100% right we are in tough times right now but please explain to me how your negativity towards this project is warranted. Do you think this is bad deal for Alberta and Canada? Do you think it will impact us negatively? If so how?

I see the glass as half full and this is a major win for our Country and the Oil industry in Alberta.

After garnering a bit more information regarding this "monumental win" for Alberta and canada, I find out Alberta is contributing 1.5 billion to the project. If that isn't enough, we are also giving loan guarantees for another six billion dollars. If I was one of those six execs or the canadian company, T C pipelines, I'd be all over pushing this project ahead too! The execs you are so willing to "wager" believe there will be a need for this in two years are very willing to "wager" over seven billion Alberta tax dollars, that two years from now this whole mess will be a distant memory in the rear view mirror. I truly hope that is the truth. The Alberta oil business has been boom and bust for seventy or more years. Ever see the old bumper sticker?, "Please God, let there be another boom. This time I promise I won't pizz it away!" This "bust" is so very different from any of those in the past. Over the last few months, he international oil business has been a mess. In the past two or three weeks the entire planet has been turned upside down and inside out. Globally, governments are pledging well over 5 trillion dollars to shore up economies in chaos. This money is all going on a credit card that's already stretched to the limit.

Alpine, if I've rained on your parade, I truly am sorry. My intention is not be negative or a killjoy. Just to tell it like I see it, without any sugar coating. 2023 is the expected completion date and I sure hope, for all our sake, the pipe runneth over and the money flows freely. In the mean time hang on tight, cause it's going to be a rough ride! Sure hope it won't be a long one as well! :)

[Drewski Canuck]

Many years ago A Survey Company President told me a very obvious truth.

"You have to get up pretty early in the morning to get the best of an American."

Make the US your only Customer, and the US will make sure they can keep the prices down by manipulating the market. Plain and Simple.

Now Alpinebeers, do you understand the problem with committing to push more into the pot when you already hold a losing poker hand?

But if some other NATION was willing to buy our oil, at world market price, and the other Major Customer saw that there was competition in the market place, what do you think would happen? Ever go to an Auction and see two guys paying more than new for some piece of junk because they both needed / wanted it? That is how the seller gets a fair price: Competition.

Now call your buddy JT and straighten him out before Alberta spends another 7 Billion.

Drewski

[bessiedog]

All I got from this message is you have some serious anger issues.

No one is going to tell me that getting more crude of of Alberta is a bad thing I’m sorry.

Some people will look for anything to complain about it seems.


Sent from my iPhone using Tapatalk


Actually.... Drewskie is prolly one of the smartest guys on this board. And i'm not April Fooling either.

Dude is selfless in offering help and resources to many members here on this Board... including me. So shut the anger issue idea down.... it ain't there.

He might not be up to suffering fools today.... of all days... heh

I'd really consider the idea that Drewskie is just seeing things a little clearer and better than you bub.

[Big Grey Wolf]

Drewski for Prime Minister!

[alpinebeers]

Many years ago A Survey Company President told me a very obvious truth.

"You have to get up pretty early in the morning to get the best of an American."

Make the US your only Customer, and the US will make sure they can keep the prices down by manipulating the market. Plain and Simple.

Now Alpinebeers, do you understand the problem with committing to push more into the pot when you already hold a losing poker hand?

But if some other NATION was willing to buy our oil, at world market price, and the other Major Customer saw that there was competition in the market place, what do you think would happen? Ever go to an Auction and see two guys paying more than new for some piece of junk because they both needed / wanted it? That is how the seller gets a fair price: Competition.

Now call your buddy JT and straighten him out before Alberta spends another 7 Billion.

Drewski


Why do you assume JT is my buddy? Im the farthest thing from a liberal and resent the comment. Statements like that make your arguments juvenile and worthless no matter how good they may be.

Again I think this is a win for Alberta and Canada, you have your opinions I have mine and they seem to differ. So be it

[MK2750]

Many years ago A Survey Company President told me a very obvious truth.

"You have to get up pretty early in the morning to get the best of an American."

Make the US your only Customer, and the US will make sure they can keep the prices down by manipulating the market. Plain and Simple.

Now Alpinebeers, do you understand the problem with committing to push more into the pot when you already hold a losing poker hand?

But if some other NATION was willing to buy our oil, at world market price, and the other Major Customer saw that there was competition in the market place, what do you think would happen? Ever go to an Auction and see two guys paying more than new for some piece of junk because they both needed / wanted it? That is how the seller gets a fair price: Competition.

Now call your buddy JT and straighten him out before Alberta spends another 7 Billion.

Drewski

Of course you are right but there are a couple of factors that one has to consider.

Texas and the rest of the oil industry is an enormous economic driver and has an enormous political pull. They are struggling and have been for some time. As an oil producing Province we forget that low oil and gas prices are a good thing for big industry. Trump knows this of course but he is rightfully getting major blow back as industry struggles and the goose that lays the golden eggs is no longer laying.

Trudeau is no doubt also starting to figure out (or hopefully will eventually) exactly how we escaped the the 2008 down turn and how vital the oil industry is to all Canadians.

The US is planning a 2 trillion dollar infrastructure splurge to help the country recover. They will need enormous amounts of oil as Trump is talking about paving every road and fixing every bridge until things pick up.

He is also rattling the sabres towards Russia and the Saudis over this oil game. He does have the balls to put on tariffs and Trudeau will have an opportunity to follow suit. If he is too stupid (which is also likely) we will benefit from the price increases anyway.

The ideal scenario of course is to get both done as soon as it is safe to do so. The massive debt we are incurring may force these projects forward with little resistance. With selling alternatives the volume will be flowing and that is all that matters to us working folks anyway.

Using your poker analogy; No matter how smart you are, you still have to play the cards that you are dealt. Kenney has some smart guys advising him. This may not be the ideal scenario but it is better than folding IMO. What has waiting for some better cards gotten us so far?

[sns2]

Of course you are right but there are a couple of factors that one has to consider.

Texas and the rest of the oil industry is an enormous economic driver and has an enormous political pull. They are struggling and have been for some time. As an oil producing Province we forget that low oil and gas prices are a good thing for big industry. Trump knows this of course but he is rightfully getting major blow back as industry struggles and the goose that lays the golden eggs is no longer laying.

Trudeau is no doubt also starting to figure out (or hopefully will eventually) exactly how we escaped the the 2008 down turn and how vital the oil industry is to all Canadians.

The US is planning a 2 trillion dollar infrastructure splurge to help the country recover. They will need enormous amounts of oil as Trump is talking about paving every road and fixing every bridge until things pick up.

He is also rattling the sabres towards Russia and the Saudis over this oil game. He does have the balls to put on tariffs and Trudeau will have an opportunity to follow suit. If he is too stupid (which is also likely) we will benefit from the price increases anyway.

The ideal scenario of course is to get both done as soon as it is safe to do so. The massive debt we are incurring may force these projects forward with little resistance. With selling alternatives the volume will be flowing and that is all that matters to us working folks anyway.

Using your poker analogy; No matter how smart you are, you still have to play the cards that you are dealt. Kenney has some smart guys advising him. This may not be the ideal scenario but it is better than folding IMO. What has waiting for some better cards gotten us so far?

Great post ^^^^

[bessiedog]

Yup

Very good analysis by MK :)

[bsmitty27]

Kenney has some smart guys advising him. This may not be the ideal scenario but it is better than folding IMO. What has waiting for some better cards gotten us so far?

I hope he has gotten some smarter people advising him because everything that man touched up untill now turned to ****!
Brad

[Drewski Canuck]

Sometimes in life, you get a chance to turn back time.

Now is the time to turn back the Northern Gateway decision. Trans Mountain will flow some oil to Vancouver, but the Vancouver ports are already clogged, and with an endangered resident pod of Killer whales, it will not make a good oil tanker route.

PLAY THE WHALE CARD NOW!

The Port of Prince Rupert is perfectly situated for large tanker traffic, and is sheltered because of the barrier islands. Tankers get out into the open Pacific with ease compared to Vancouver.

All the Engineering and consultation on Northern Gateway is already done, so mobilization can be done quickly.

DO NOT endorse selling all our future capacity to the Gulf Coast Refineries. They have been reaping massive profits, by taking the oil that the US Owners have produced in Alberta's Oil Sands, and sold to their own Refineries for a song.

The Oil money is not being made in Canada, is not being paid in Canada, and is not being taxed in Canada. That is the problem when the game is rigged from the start.

If I offend Alpinebeers for association with Justin "Off Shore Trust Fund" Trudeau, I am truly sorry and apologize.

The point is simple: Everyone should be contacting the Feds to demand that Northern Gateway be built now.

Do not hang your hat on the KXL line, especially when it means more of the same treatment by the Multi National refiners on the Gulf Coast who are exploiting this price differential that they have created by NOT paying fair market value.

Drewski

[MountainTi]

A little lesson on oil pricing for those interested in reading. Will learn a thing or two if you take the time. It is not black and white as so many assume.

And yes, KXL is a good thing, and MUCH needed.


https://www.oilsandsmagazine.com/market-insights/crude-oil-pricing-differentials-why-alberta-crude-sells-at-deep-discount-to-wti


I spent a lifetime in the upstream/exploration side of things. Lately I'm hanging out further downstream (processing). Definitely learning all products coming out of the ground aren't created equal.

[elk eater]

Even Justin Trudeau realizes that he will need all the economic activity Canada can muster (THAT MEANS ANY WAY TO RAISE TAX REVENUE) to pay the bill after the Pandemic is over.

Drewski

The pandemic will balance itself !!! Won’t it :thinking-006:

[flyrodfisher]

A little lesson on oil pricing for those interested in reading. Will learn a thing or two if you take the time. It is not black and white as so many assume.

And yes, KXL is a good thing, and MUCH needed.


https://www.oilsandsmagazine.com/market-insights/crude-oil-pricing-differentials-why-alberta-crude-sells-at-deep-discount-to-wti


I spent a lifetime in the upstream/exploration side of things. Lately I'm hanging out further downstream (processing). Definitely learning all products coming out of the ground aren't created equal.

Great link.
THX for that Mountainti.
It is a bit dated with respect to production and demand numbers but still gives an excellent explanation of crude types and refinery needs/destinations for those that are not familiar with the business.

One of the problems the industry will face very very quickly is the fact that tanks are full across North America and tankers across the globe are being used as floating storage. Demand has dropped in the order of 20% due to the effects of Covid.
Producers will and are already shutting in production...there is just no home for all the oil right now...things are starting to back up.
Currently about 125,000bpd are shut in, with analysts expecting 300,000bpd to be shut in for the second quarter. Much of that will be oil sands...Suncor has already shut down one train at Ft Hills.

The question is...how long will the effects of Covid last in reducing demand?
Will demand ever come back to pre-Covid levels?...if so how long will it take?

How long will that shiny new pipeline sit empty?
Are governments/companies willing to take that gamble?...especially now?

I don't think anyone really knows the answer....

[MountainTi]

Great link.
THX for that Mountainti.
It is a bit dated with respect to production and demand numbers but still gives an excellent explanation of crude types and refinery needs/destinations for those that are not familiar with the business.

One of the problems the industry will face very very quickly is the fact that tanks are full across North America and tankers across the globe are being used as floating storage. Demand has dropped in the order of 20% due to the effects of Covid.
Producers will and are already shutting in production...there is just no home for all the oil right now...things are starting to back up.
Currently about 125,000bpd are shut in, with analysts expecting 300,000bpd to be shut in for the second quarter. Much of that will be oil sands...Suncor has already shut down one train at Ft Hills.

The question is...how long will the effects of Covid last in reducing demand?
Will demand ever come back to pre-Covid levels?...if so how long will it take?

How long will that shiny new pipeline sit empty?
Are governments/companies willing to take that gamble?...especially now?

I don't think anyone really knows the answer....

How much of a slowdown is that for Ft. Hills? By that I mean how many trains they run?

[flyrodfisher]

How much of a slowdown is that for Ft. Hills? By that I mean how many trains they run?

Ft Hills goes from 2 trains down to 1.
I think that is a reduction of close to 100,000bpd

[flyrodfisher]

Talk that Ft Hills might be totally shut down....

https://www.bnnbloomberg.ca/massive-new-mine-owned-by-suncor-teck-could-be-oil-sands-first-victim-of-price-war-1.1416022

[elk eater]

So you build the KXL and start on it now when we could use the jobs and the price to build it will be at an all time low. All good right. Then you start to move product to the US at a cheap price but we still profit, just marginally. Now if you get the Northern Gateway or Energy East pipeline or at least any pipe to tide water wouldn’t it be nice to have an existing pipeline to the Americans who have an insatiable thirst for oil. Seems to me as soon as you turn the valve east or west the price of our oil to our American counterparts is gonna go up. They don’t want to pay send it to tidewater. Pretty sure they will pay up. Don’t see how we can lose. The worlds need for oil is not going away anytime soon.

[Drewski Canuck]

So you build the KXL and start on it now when we could use the jobs and the price to build it will be at an all time low. All good right. Then you start to move product to the US at a cheap price but we still profit, just marginally. Now if you get the Northern Gateway or Energy East pipeline or at least any pipe to tide water wouldn’t it be nice to have an existing pipeline to the Americans who have an insatiable thirst for oil. Seems to me as soon as you turn the valve east or west the price of our oil to our American counterparts is gonna go up. They don’t want to pay send it to tidewater. Pretty sure they will pay up. Don’t see how we can lose. The worlds need for oil is not going away anytime soon.

Amen! We have to turn the TIDE (WATER) NOW!

Drewski

[ESOXangler]

I would much rather see the investment going to increasing our refining capabilities. Sure refineries cost more but the end result is alot of profit. And they provide alot more man hours over their lifetime than the pipeline will.

[Drewski Canuck]

For Western Canada, we have plenty of Refinery Capacity. With the Government's own Refinery coming on stream, there will be plenty of Diesel, and the market for the finished product is not there. Then the question is how do you ship the product to a market, when there is no pipeline to the market?

The US has plenty of refinery capacity, so we will not sell finished product to them.

To get royalty dollars and wages paid in the patch, the path of least resistance, other than from 5 Hereditary eco terrorists and a bunch of fools in Ottawa, is the Northern Gateway Pipeline.

Drewski

[Big Grey Wolf]

Drewski is right we need "Northern Gateway or Bust" for Alberta and Canada's future. If any terrorists in BC stand in the way we need to send in the military to protect the right of way. We will have a major Corona bill$$ to pay and windmills will never pay it.

[MK2750]

Someone help me here because I don't understand. If energy east is being held up by Quebec why don't we just go as far as Ontario. There are people starving for jobs in northern Ontario and if the polling maps are correct there would be little resistance until just north of Toronto. Build refineries in northern or even central Ontario and that market would be ours.

I know we would ideally go right to NB where the existing refineries are but we do not have to completely abandon them. They could be ( the Irvings etc.) important investors with proven experience.

The french could continue to have no appetite for a pipe line and watch their energy prices soar, while the folks of Ontario could enjoy jobs and a much needed reduction in cost of living.

[hal53]

Someone help me here because I don't understand. If energy east is being held up by Quebec why don't we just go as far as Ontario. There are people starving for jobs in northern Ontario and if the polling maps are correct there would be little resistance until just north of Toronto. Build refineries in northern or even central Ontario and that market would be ours.

I know we would ideally go right to NB where the existing refineries are but we do not have to completely abandon them. They could be ( the Irvings etc.) important investors with proven experience.

The french could continue to have no appetite for a pipe line and watch their energy prices soar, while the folks of Ontario could enjoy jobs and a much needed reduction in cost of living.
Investors don't have the will to wait the length of time it takes to get a refinery approved, let alone get it online. I couldn't imagine the goat roping they would have to go through to get one built in Ontario

[zabbo]

A little lesson on oil pricing for those interested in reading. Will learn a thing or two if you take the time. It is not black and white as so many assume.

And yes, KXL is a good thing, and MUCH needed.


https://www.oilsandsmagazine.com/market-insights/crude-oil-pricing-differentials-why-alberta-crude-sells-at-deep-discount-to-wti


I spent a lifetime in the upstream/exploration side of things. Lately I'm hanging out further downstream (processing). Definitely learning all products coming out of the ground aren't created equal.

A good read MountainTI. Thanks for posting. Some interesting points regarding quality, refining capabilities and price. You checking this out Alpine?? One thing I have to point out though, it was last updated Dec.13, 2018. I think it would be fair to say, much has changed since then. Unfortunately, not for the better. Especially over the last 3 to 4 weeks. To make an investment the magnitude of KXL, especially with huge amounts Alberta Tax dollars on the line seems very risky to me. The current global economic situation says, overall demand for oil has dropped and will continue to do so for some time to come. The U S has pumped 2 trillion dollars into their economy, with more expected and the markets are still staggering! April 1st the DOW took another 900 point dive. Unfortunately that's not an April fools joke. Overall, world governments have pledged well over 5 trillion and markets are still stalled or dropping. To hear this pipeline was a go ten years ago, I would have been popping Champagne corks! Even five years ago. Today? It might prove to be good deal five years from now. Sure hope so! In the mean time we talk about all the jobs created. A quick glance at the map shows the vast majority of this pipe will be south of the 49th. I can assure you there will be very few if any Canadians working that section. There may still be hurdles to overcome. A democratic U S government in the fall will probably stomp the whole thing. I'm not positive, but I believe there are still some environmental and native issues to be settled south of the border. If all that isn't bad enough, we now have to contend with covid-19 safety issue for those who will actually build the pipe. At the moment, that alone is a formidable issue. :scared0018:

As my old boy scout leader used to say, "Prepare for the worst, hope for the best!" :thinking-006:

[MountainTi]

A good read MountainTI. Thanks for posting. Some interesting points regarding quality, refining capabilities and price. You checking this out Alpine?? One thing I have to point out though, it was last updated Dec.13, 2018. I think it would be fair to say, much has changed since then. Unfortunately, not for the better. Especially over the last 3 to 4 weeks. To make an investment the magnitude of KXL, especially with huge amounts Alberta Tax dollars on the line seems very risky to me. The current global economic situation says, overall demand for oil has dropped and will continue to do so for some time to come. The U S has pumped 2 trillion dollars into their economy, with more expected and the markets are still staggering! April 1st the DOW took another 900 point dive. Unfortunately that's not an April fools joke. Overall, world governments have pledged well over 5 trillion and markets are still stalled or dropping. To hear this pipeline was a go ten years ago, I would have been popping Champagne corks! Even five years ago. Today? It might prove to be good deal five years from now. Sure hope so! In the mean time we talk about all the jobs created. A quick glance at the map shows the vast majority of this pipe will be south of the 49th. I can assure you there will be very few if any Canadians working that section. There may still be hurdles to overcome. A democratic U S government in the fall will probably stomp the whole thing. I'm not positive, but I believe there are still some environmental and native issues to be settled south of the border. If all that isn't bad enough, we now have to contend with covid-19 safety issue for those who will actually build the pipe. At the moment, that alone is a formidable issue. :scared0018:

As my old boy scout leader used to say, "Prepare for the worst, hope for the best!" :thinking-006:

It will be over 2 years before there is a drop of oil that flows thru the KXL. These large projects aren't built on todays oil prices, but for the long term pricing. There is already a lot of pipe in the ground

[mac1983]

Someone help me here because I don't understand. If energy east is being held up by Quebec why don't we just go as far as Ontario. There are people starving for jobs in northern Ontario and if the polling maps are correct there would be little resistance until just north of Toronto. Build refineries in northern or even central Ontario and that market would be ours.

I know we would ideally go right to NB where the existing refineries are but we do not have to completely abandon them. They could be ( the Irvings etc.) important investors with proven experience.

The french could continue to have no appetite for a pipe line and watch their energy prices soar, while the folks of Ontario could enjoy jobs and a much needed reduction in cost of living.

The Energy East pipeline was going to extend an existing 42 inch pipeline that started in Alberta and ended roughly at the Ontario/Quebec border. It would add roughly 1600 km to the existing 3000 km of pipe. It would go through Quebec and New Brunswick and terminate at tidewater at the Irving Refinery at Saint John New Brunswick and add roughly 1.1 million barrels per day to our export capacity. But Quebec cancelled it because they prefer Saudi Oil over ours.

[NCC]

I would much rather see the investment going to increasing our refining capabilities. Sure refineries cost more but the end result is alot of profit. And they provide alot more man hours over their lifetime than the pipeline will.


From the Calgary Herald in regards to the Sturgeon Refinery:

"According to Alberta budget documents released last week, the province has paid about $466 million in debt-servicing costs since June 2018 tied to its commitments to the $9.9-billion refinery, located northeast of Edmonton.

The Alberta Petroleum Marketing Commission (APMC), a Crown corporation, has been making payments averaging $27 million a month related to the financing of the facility. These payments are occurring even though the refinery still is not processing the government’s bitumen at the facility — or generating revenue for the province from its refining operations — due to startup issues."

According to the article, the AB Government is due to start making another $21 million monthly payment in June, for a total payment of $48 million/month. I don't think we can afford to build any more refineries.

[MountainTi]

Investors don't have the will to wait the length of time it takes to get a refinery approved, let alone get it online. I couldn't imagine the goat roping they would have to go through to get one built in Ontario

Aside from Redwater, it's been a while....

https://www.oilsandsmagazine.com/projects/canadian-refineries

[ESOXangler]

From the Calgary Herald in regards to the Sturgeon Refinery:

"According to Alberta budget documents released last week, the province has paid about $466 million in debt-servicing costs since June 2018 tied to its commitments to the $9.9-billion refinery, located northeast of Edmonton.

The Alberta Petroleum Marketing Commission (APMC), a Crown corporation, has been making payments averaging $27 million a month related to the financing of the facility. These payments are occurring even though the refinery still is not processing the government’s bitumen at the facility — or generating revenue for the province from its refining operations — due to startup issues."

According to the article, the AB Government is due to start making another $21 million monthly payment in June, for a total payment of $48 million/month. I don't think we can afford to build any more refineries.

Yeah what the herald doesnt take into account is the sturgeon refinery is in some regards a pilot project. Once the gasifier is proven and it will be it's going to be able to supply it's own H2 plus capture a pile of CO2 emissions. Coupled up with a LC Finer and it's going to be printing money. Its already breaking even making 40000 bbl/d using sco. Once it switches to bitumin itll be alot more productive.

[zabbo]

It will be over 2 years before there is a drop of oil that flows thru the KXL. These large projects aren't built on todays oil prices, but for the long term pricing. There is already a lot of pipe in the ground

Yes, I understand this is looking into the future for pricing. Two years from now I have serious doubts the global economic situation will have improved. Virtually every country on the planet is in hock up past their ears. With that in mind I doubt the price of oil will improve a whole bunch. Any country that has oil to export is starving for cash and they will sell at any price they can get. Think Venezuela, Iran, other OPEC countries. Saudi and Russia are currently in a price war. The Saudis are threatening to open the taps even more. Who knows how or where that will end up. The Chinese economy is slowing as is their demand for oil. That was happening before corona. The economic / financial damage done buy Corona is a wild card, but I'm guessing it will take at least 5 years and probably many more to get over that hump. In the last couple weeks over 2 million Canadians have filed for E I! It will take a long time for that bubble to work it's way through the system. I have said before this "bust" is like no other we have ever seen. The tourist industry, even on a local scale is non existent. It will be a long time before people start regularly jumping on airplanes for a holiday. The cruise ship industry will probably never be what it was 5 weeks ago. If this pipe does in fact proceed, I sure hope the good folks of Alberta don't get burned. That's something we really can't afford right now. :thinking-006:

JMHO

[hal53]

Yes, I understand this is looking into the future for pricing. Two years from now I have serious doubts the global economic situation will have improved. Virtually every country on the planet is in hock up past their ears. With that in mind I doubt the price of oil will improve a whole bunch. Any country that has oil to export is starving for cash and they will sell at any price they can get. Think Venezuela, Iran, other OPEC countries. Saudi and Russia are currently in a price war. The Saudis are threatening to open the taps even more. Who knows how or where that will end up. The Chinese economy is slowing as is their demand for oil. That was happening before corona. The economic / financial damage done buy Corona is a wild card, but I'm guessing it will take at least 5 years and probably many more to get over that hump. In the last couple weeks over 2 million Canadians have filed for E I! It will take a long time for that bubble to work it's way through the system. I have said before this "bust" is like no other we have ever seen. The tourist industry, even on a local scale is non existent. It will be a long time before people start regularly jumping on airplanes for a holiday. The cruise ship industry will probably never be what it was 5 weeks ago. If this pipe does in fact proceed, I sure hope the good folks of Alberta don't get burned. That's something we really can't afford right now. :thinking-006:

JMHO
Inspite of your ongoing doom and gloom I can tell you that what ever happens to Alberta in the next few years , we will be a heckuva lot worse off if we don't have the pipelines

[zabbo]

Inspite of your ongoing doom and gloom I can tell you that what ever happens to Alberta in the next few years , we will be a heckuva lot worse off if we don't have the pipelines

Yes, at the moment I do see things as very bad. Maybe I watch too many news and financial reports. 14 days of isolation get pretty boring. Hope for all our sake that I am wrong all the way. That said, pipelines that carry oil nobody can afford or wants to buy are not an asset, They are a liability. :thinking-006:

[alpinebeers]

A good read MountainTI. Thanks for posting. Some interesting points regarding quality, refining capabilities and price. You checking this out Alpine?? One thing I have to point out though, it was last updated Dec.13, 2018. I think it would be fair to say, much has changed since then. Unfortunately, not for the better. Especially over the last 3 to 4 weeks. To make an investment the magnitude of KXL, especially with huge amounts Alberta Tax dollars on the line seems very risky to me. The current global economic situation says, overall demand for oil has dropped and will continue to do so for some time to come. The U S has pumped 2 trillion dollars into their economy, with more expected and the markets are still staggering! April 1st the DOW took another 900 point dive. Unfortunately that's not an April fools joke. Overall, world governments have pledged well over 5 trillion and markets are still stalled or dropping. To hear this pipeline was a go ten years ago, I would have been popping Champagne corks! Even five years ago. Today? It might prove to be good deal five years from now. Sure hope so! In the mean time we talk about all the jobs created. A quick glance at the map shows the vast majority of this pipe will be south of the 49th. I can assure you there will be very few if any Canadians working that section. There may still be hurdles to overcome. A democratic U S government in the fall will probably stomp the whole thing. I'm not positive, but I believe there are still some environmental and native issues to be settled south of the border. If all that isn't bad enough, we now have to contend with covid-19 safety issue for those who will actually build the pipe. At the moment, that alone is a formidable issue. :scared0018:

As my old boy scout leader used to say, "Prepare for the worst, hope for the best!" :thinking-006:


Im glad we can at least agree it will be a good thing for us all when its built

[zabbo]

Im glad we can at least agree it will be a good thing for us all when its built

Thinking the jury will be out for 2 or 3 years on that. :thinking-006:


As I have said in a few posts, sure hope you're right! This is one humble pie I'd be very happy to eat all of!

[MountainTi]

102% jump in WCS price today (along with climbs in most other blends as well). Interesting. Will it hold?

I try to be more optimistic than many, but not sure on this one. Could go either way. Hoping the panic bottomed it out and is on the rise

[zabbo]

102% jump in WCS price today (along with climbs in most other blends as well). Interesting. Will it hold?

I try to be more optimistic than many, but not sure on this one. Could go either way. Hoping the panic bottomed it out and is on the rise

Me too! Haven't look at my investment portfolio for a few days. :scared0018:

[Big Grey Wolf]

Very simple solution, put 30% duty on All foreign oil including US product. Quebec would get the message very quickly and build last phase of pipeline.
We could also wave a few barrels of $5 oil in front of them.

[MountainTi]

Some of todays closing prices

162440

[NCC]

Yeah what the herald doesnt take into account is the sturgeon refinery is in some regards a pilot project. Once the gasifier is proven and it will be it's going to be able to supply it's own H2 plus capture a pile of CO2 emissions. Coupled up with a LC Finer and it's going to be printing money. Its already breaking even making 40000 bbl/d using sco. Once it switches to bitumin itll be alot more productive.

I hope you’re right. As soon as they start printing money there will be other investors building refineries and the government can sell their share of the refinery.

[flyrodfisher]

Yeah what the herald doesnt take into account is the sturgeon refinery is in some regards a pilot project. Once the gasifier is proven and it will be it's going to be able to supply it's own H2 plus capture a pile of CO2 emissions. Coupled up with a LC Finer and it's going to be printing money. Its already breaking even making 40000 bbl/d using sco. Once it switches to bitumin itll be alot more productive.

Initial estimated capital cost was $4 Billion
Capital cost to date is $9.9 Billion..... a 148% cost over run....
Add to that county & provincial tax concessions and funding,

They have NOT yet processed one drop of bitumen.
They are not breaking even processing the SCO

It will take a while till this baby pays for itself.…..

[ESOXangler]

Initial estimated capital cost was $4 Billion
Capital cost to date is $9.9 Billion..... a 148% cost over run....
Add to that county & provincial tax concessions and funding,

They have NOT yet processed one drop of bitumen.
They are not breaking even processing the SCO

It will take a while till this baby pays for itself.…..

How do you know it's not breaking even? Would love to hear.

[flyrodfisher]

From the Calgary Herald article;

“In an ideal world, you would be processing bitumen, making a margin and that would cover the debt payments. But since we’re not doing that, we still are having to pay the debt and that’s racking up losses on APMC’s books,” said Richard Masson, former chief executive of the Crown corporation.

In other words they are NOT making a margin at all and are unable to make the debt principal payments that start this summer.

[ESOXangler]

From the Calgary Herald article;

“In an ideal world, you would be processing bitumen, making a margin and that would cover the debt payments. But since we’re not doing that, we still are having to pay the debt and that’s racking up losses on APMC’s books,” said Richard Masson, former chief executive of the Crown corporation.

In other words they are NOT making a margin at all and are unable to make the debt principal payments that start this summer.

Bah I thought you meant something other than the same article.

Shes keeping the lights on this I know for certain.

[flyrodfisher]

Bah I thought you meant something other than the same article.

Shes keeping the lights on this I know for certain.

From the Herald;
https://calgaryherald.com/opinion/columnists/opinion-ucp-government-inherits-sturgeon-upgrader-nightmare/

"NWR Sturgeon refinery has been processing synthetic crude oil into diesel and other products since November 2017. It has used the net income from the proceeds of this to pay the operating costs as well as the commissioning costs for the still not operating gasifier. But none of this net income has been paid to the government of Alberta or CNRL"


From the Herald;
https://calgaryherald.com/business/energy/varcoe-kenney-concerned-about-more-cost-overruns-and-delays-at-sturgeon-refinery/

“The money has been flowing all one way — it’s all going in and to date, there’s been nothing coming out.”

[zabbo]

Initial estimated capital cost was $4 Billion
Capital cost to date is $9.9 Billion..... a 148% cost over run....
Add to that county & provincial tax concessions and funding,

They have NOT yet processed one drop of bitumen.
They are not breaking even processing the SCO

It will take a while till this baby pays for itself.…..

This! One of my biggest concerns regarding government involvement in any project. Business invests money to make money. Government generally invests money to spend money. If this is such a good deal right now, why is there a need for the taxpayers of Alberta to put up 1.5 billion tax dollars. On top of that 6 billion in loan guarantees? :thinking-006: :scared0018:

[ESOXangler]

This! One of my biggest concerns regarding government involvement in any project. Business invests money to make money. Government generally invests money to spend money. If this is such a good deal right now, why is there a need for the taxpayers of Alberta to put up 1.5 billion tax dollars. On top of that 6 billion in loan guarantees? :thinking-006: :scared0018:

Why does everyone always think businesses run things effectively? So many of our major corporations demand at some point and time government welfare of some type.

I'm not opposed to using tax payers dollars to "help out" occasionally but chippin' in 1.5 to start and then guaranteeing loans is kind of crazy. Especially giving that we are scaling but education and slowly privatizing health care.

We are witnessing an oligarchy take advantage of us. If a person was truly an Alberta they should be absolutely disgusted with what's been going on. We should be focusing on our future. Education, small business incentives, hell we should be throwing money in to nuclear technology, and working like hell to diversify. Not throwing 7 billion into a pipe that slurries away raw product.

[zabbo]

Why does everyone always think businesses run things effectively? So many of our major corporations demand at some point and time government welfare of some type.

I'm not opposed to using tax payers dollars to "help out" occasionally but chippin' in 1.5 to start and then guaranteeing loans is kind of crazy. Especially giving that we are scaling but education and slowly privatizing health care.

We are witnessing an oligarchy take advantage of us. If a person was truly an Alberta they should be absolutely disgusted with what's been going on. We should be focusing on our future. Education, small business incentives, hell we should be throwing money in to nuclear technology, and working like hell to diversify. Not throwing 7 billion into a pipe that slurries away raw product.

Businesses that don't run things efficiently usually aren't around very long. Survival of the fittest. Some, maybe even many businesses ask for government assistance. Some, bombardier, snc lavalin, air canada, cbc, auto manufacturers, get that assistance. Others not so much. Can you say canadian oil business? Funny how the geographic location seems to be the common denominator regarding which businesses get assistance and which ones don't. :thinking-006:

[ESOXangler]

Businesses that don't run things efficiently usually aren't around very long. Survival of the fittest. Some, maybe even many businesses ask for government assistance. Some, bombardier, snc lavalin, air canada, cbc, auto manufacturers, get that assistance. Others not so much. Can you say canadian oil business? Funny how the geographic location seems to be the common denominator regarding which businesses get assistance and which ones don't. :thinking-006:

Look up ExxonMobil, shell's, apple, or any major corporation. Its across the world they get help. Capitalism is gone.

[zabbo]

Look up ExxonMobil, shell's, apple, or any major corporation. Its across the world they get help. Capitalism is gone.

Yes, I wouldn't doubt the corporations named may have received government aid of some sort. I have to say though, none of the ones you mention are canadian. I freely agree many corporations get assistance. As posted even canadian ones. Just seems odd that other than the fact the turd purchased TMX, it seems he has done everything in his power to destroy the canadian oil industry. Carbon tax, driving away investment with never ending environmental challenges, First Nations issues and on and on. The apple doesn't fall far from the tree. :)

[flyrodfisher]

Just a few numbers....a simplistic calculation

Using $9,700,000,000 capital cost
Interest payments are approx $300,000,000 per year equals $25,000,000 per month equals $800,000 per day equals $20 per refined barrel

Paying off the principal over 30 years equals about $323,000,000 per year equals $27,000,000 per month equals $900,000 per day equals $22.50 per refined barrel


Paying off the principal over 10 years equals about $970,000,000 per year equals $81,000,000 per month equals $2,700,000 per day equals $67.50 per barrel


So....just to pay off the debt on this refinery will cost;
$42.50 per refined barrel over 30 years or
$87.50 per refined barrel over 10 years

add to that the operating costs to refine
add to that the raw bitumen or SCO input costs
add to that royalties
add to that transportation costs
add to that taxes
add to that other infrastructure costs...roads, powerline, pipelines, etc


Don't think I will live long enough to see this baby make money...

PS...I'm not going to get into nit picking the numbers....just trying to show how large the debt servicing costs on this project are.
BTW...at $200,000+ per refined barrel, this is one of the most expensive refineries ever built

[pikeman06]

Ive worked on big pipeline projects my whole life and I was always blown away by the cost and money associated with such projects till I got in the position to actually see projected revenues etc. The 42 inch alliance line put in in the 90's was paid for (line installation costs) on 22 days they told me. This transmountain I'm working on right now at 800000 barrels a day at let's realistically say 40 dollars a barrel is 36 million dollars a day. Per day. Don't think anyone is gonna let the Saudis and russians get away with what they are doing to the world's oil supply and value it's akin to dropping a bomb in the western world's wallets and economies. When it's all said and done there will be boycotts and possibly bloodshed over the move they made at such a time. You just don't hear much about it because of the enormity of the current situation in the world. But to pick such a time to flood the market and screw with the western world's economy at present and moving forward is what I would call a war. Government ain't gonna be selling no transmountain to the first nations and gonna slam the keystone in too while the rest of the world is lookin somewhere else. Smart for alberta and Kenney and tc energy. Pure dumb luck for Trudeau but it's the only thing that's gonna pay big enough to recover the money he is throwing around. Just my 2 cents, i got more.

[flyrodfisher]

Ive worked on big pipeline projects my whole life and I was always blown away by the cost and money associated with such projects till I got in the position to actually see projected revenues etc. The 42 inch alliance line put in in the 90's was paid for (line installation costs) on 22 days they told me. This transmountain I'm working on right now at 800000 barrels a day at let's realistically say 40 dollars a barrel is 36 million dollars a day.

All I will say is that I too have spent my career on big pipeline projects.
The numbers you quote are for the value of the product being transported...it is NOT the time it takes to pay off the pipeline.
And, NO Alliance was NOT paid for in 22 days

[pikeman06]

Maybe not in alliances books it wasn't of course, but in commodity shipped at those volumes at that time theoretically it was it's been in the ground whistling away huge volumes for how long? I know where you coming from bud. But the numbers I see are installation costs versus commodity costs plain and simple not shipping costs, royalties etc. Cost to get a pipeline built that operates for 30 years at 800000 barrels a day is so minor in comparison to lifespan value of said line it isn't even worth arguing. But if you wanna we can, all day long. Please just agree that these pipelines are a good thing for Canada and alberta. Maybe one week out of 30 years they appear to be unprofitable on paper so don't dwell on that or I'll pull out my thinking touque and calculator and make my point based on facts that will boggle the mind.

[ESOXangler]

Just a few numbers....a simplistic calculation

Using $9,700,000,000 capital cost
Interest payments are approx $300,000,000 per year equals $25,000,000 per month equals $800,000 per day equals $20 per refined barrel

Paying off the principal over 30 years equals about $323,000,000 per year equals $27,000,000 per month equals $900,000 per day equals $22.50 per refined barrel


Paying off the principal over 10 years equals about $970,000,000 per year equals $81,000,000 per month equals $2,700,000 per day equals $67.50 per barrel


So....just to pay off the debt on this refinery will cost;
$42.50 per refined barrel over 30 years or
$87.50 per refined barrel over 10 years

add to that the operating costs to refine
add to that the raw bitumen or SCO input costs
add to that royalties
add to that transportation costs
add to that taxes
add to that other infrastructure costs...roads, powerline, pipelines, etc


Don't think I will live long enough to see this baby make money...

PS...I'm not going to get into nit picking the numbers....just trying to show how large the debt servicing costs on this project are.
BTW...at $200,000+ per refined barrel, this is one of the most expensive refineries ever built

Hey I'm not taking it as nitpicking at all. This is a good conversation! You put some energy into this and that's great! I only know what I know, and you know what you know and hopefully out of this we both come away with something.

I still see the refinery having a net positive. For one thing the feedstock is predominately royalties that are paid to the government. By refining feedstock the government increases their yield on what would otherwise be just bitumin. Even at today's pricing that still equals almost $150 per barrel. Not including the LPG and other light ends that are extracted. The technology that is there allows them to produce their own hydrogen without having to utilize a cost heavy reformer. Coupled together with CO2 capture it does allow it to significantly lower their emission targets.

[flyrodfisher]

Please just agree that these pipelines are a good thing for Canada and alberta.

On that point...we agree...unfortunately it seems a lot of other folks need convincing...

[flyrodfisher]

Hey I'm not taking it as nitpicking at all. This is a good conversation! You put some energy into this and that's great! I only know what I know, and you know what you know and hopefully out of this we both come away with something.

I still see the refinery having a net positive. For one thing the feedstock is predominately royalties that are paid to the government. By refining feedstock the government increases their yield on what would otherwise be just bitumin. Even at today's pricing that still equals almost $150 per barrel. Not including the LPG and other light ends that are extracted. The technology that is there allows them to produce their own hydrogen without having to utilize a cost heavy reformer. Coupled together with CO2 capture it does allow it to significantly lower their emission targets.

One point to remember...one barrel of SCO feedstock does not equal one barrel of diesel. Even worse for one barrel of bitumen.

Of course with oil prices right now, the numbers look bad...but that wasn't contemplated when this thing got built. Nobody expected this to happen!
Easy for us to armchair quarterback this one...lol

I'm not privy to the internal financials on this but I suspect that the plan all along was that the only way this baby would make money was to get all three streams going and ramp up to full capacity of 240,000bpd.

Don't even get me going on CO2 capture and emission targets...lol

Anyway...good discussion