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

[ESOXangler]

Originally Posted by 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

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]

Originally Posted by pikeman06

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]

Originally Posted by ESOXangler

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