Links January 17, 2012

Links: January 9, 2011

Enbridge unswayed by Gitxsan controversy: Vancouver Sun

Energy First Nations

The Vancouver Sun reports Enbridge unswayed by Gitxsan controversy

Enbridge Inc., on Monday, remained unruffled by the growing controversy in north western British Columbia communities surrounding the participation agreement it signed Dec. 2 with the Gitxsan First Nation.

“I’ve seen some comment, I don’t know that that’s a considerable amount,” said Paul Stanway, Enbridge’s spokesman on the project. “As I said, we’re comfortable with the agreement we reached.”

New headquarters for National Energy Board is Shanghai, newspaper says

Energy Politics

Prime Minister Stephen Harper said Sunday that moving Canadian oil (really unrefined bitumen from the bitumen sands) from Alberta to China is a priority for his government.

Now, according to the local Black Press  giveaway weekly, the Northern Connector,  it appears that the Prime Minister has already taken the first step by moving the headquarters of the National Energy Board from Calgary to Shanghai.

Here is the story that appeared in the Nov. 11 edition of the Northern Connector.

630-shanghai.jpgActually, of course, the NEB remains in Calgary and will be holding hearings across the north in early 2012.

Kinder Morgan buys US natural gas pipeline company in $21 billion dollar deal

Kinder Morgan, the giant oil pipeline company, which has proposed building a second bitumen pipeline from Alberta to Kitimat, Sunday announced it was buying El Paso Corp, America’s largest natural gas pipeline operator.

The Associated Press says the deal is worth $20.7 billion, Bloomberg says it is worth $21.1 billion.

Kinder Morgan already operates a pipeline from Alberta through British Columbia to the port of Vancouver and there are plans to expand that pipeline.

Kinder Morgan’s move comes after Enbridge also said it was interested in moving into the natural gas pipeline business. Both companies are moving to take advantage of the natural gas found in shale deposits and the growing demand for natural gas in both North America and Asia.

Bloomberg
says:

The takeover is the largest ever proposed of a pipeline company, surpassing the 2007 leveraged buyout of Kinder Morgan itself by a group including Richard Kinder and Goldman Sachs Group Inc. The combined company would have 67,000 miles (107,000 kilometers) of gas lines and eclipse Enterprise Products Partners LP as the biggest U.S. pipeline operator.

“This once in a lifetime transaction is a win-win opportunity for both companies,” Kinder, who will be chairman and chief executive officer of the combined company, said in the statement. He said the deal, once closed, would create immediate shareholder value because of its cash flow.

The Associated Press says

Kinder Morgan will more than double the size of its pipeline network by purchasing El Paso. The new pipeline system would stretch 80,000 miles — long enough to wind around the globe three times. Kinder Morgan’s pipelines in the Rocky Mountains, the Midwest and Texas will be woven together with El Paso’s expansive network that spreads east from the Gulf Coast to New England, and to the west through New Mexico, Arizona, Nevada and California.

“We believe that natural gas is going to play an increasingly integral role in North America,” said Richard Kinder, Kinder Morgan Inc.’s chief executive, said on Sunday when the deal was announced.

Robert McFadden, a Houston-based natural gas pipeline consultant, said the expanded network will make it easier to move natural gas from new fields that have mushroomed across the U.S. in the past few years.

The take over deal came on the same weekend that the “Occupy” movement was demonstrating around the world against the greed of financial institutions.

Reuters reports that:

The investment banks advising on Kinder Morgan Inc’s $21 billion purchase of El Paso Corp are set to rake in a total of $100 million to $145 million in M&A fees, according to Freeman & Co on Sunday.

Evercore Partners and Barclays Capital , which are advising Kinder Morgan on the deal, would earn $45 million to $65 million in fees, Freeman estimates show.

Morgan Stanley and Goldman Sachs , which are on El Paso’s side, would split another $55 million to $80 million in fees, depending on the role they played, the estimates show.

US Coast Guard seizes “stateless” drift net boat off Alaska: AP

Fishery

Associated Press reporter Becky Bohrer in Juneau reports on the Bangun Perkasa a rat-infested illegal fishing boat with a 10 mile long drift net seized off Alaska.

Seized Vessel Shines Light on Illegal Fishing

The recent seizure of a stateless ship in international waters 2,600 miles off Alaska’s coast has spotlighted the challenge that the U.S. and other nations face in trying to crackdown on illegal fishing, an activity that accounts for up to $23.5 billion a year in global economic losses.

Finding rogue vessels in the vast, open ocean can be like finding a needle in a haystack. But U.S. officials and some environmentalists say progress is being made, including multinational patrol and enforcement agreements and the potential for sanctions against countries that engage in illegal, unreported and unregulated (or IUU) fishing.

Links: World hunger for LNG on the rise

Energy Links

Alberta Oil
The clock is ticking on West Coast LNG shipments Nuclear outages in Japan stoke Canadian export plans

The uptick in LNG consumption is potentially good news for a suite of liquefaction plants taking shape on the northwest coast of British Columbia. Japan is one of several potential sales targets for the Apache Canada Ltd.-led Kitimat LNG project, which is currently awaiting approval from the National Energy Board to begin shipping five million tonnes of the stuff annually from a new facility at Bish Cove. Liquefied gas costs spiked 33 per cent after the March 11 quake, Bloomberg reports, and they may rise higher yet.

Competition will be stiff. Canadian forays into LNG will rub shoulders with the likes of ExxonMobil, BG Group Plc and Qatargas, among others, who are likewise clamoring to deliver chilled gas to a power market in need. Just 16 of the country’s 54 reactors were online last month, according to the International Energy Agency. (That’s no small figure, as the atom currently meets 27 per cent of the island’s electricity needs).

Financial Post
LNG on the rise

Liquefied natural gas prices are surging to a three-year high as demand from Japan, China and India outpaces supply increases, boosting sales for producers from BG Group Plc to Exxon Mobil Corp….

North America may export about 5 billion cubic feet a day of LNG, or roughly the combined LNG export capacity of Nigeria and Algeria, globally by 2017 from projects that turn surplus gas from shale-rock formations to LNG for shipment to customers in Asia and Europe, according to the Eurasia Group, a New York- based consultant. That’s about half of the six proposed developments by companies including Cheniere in the U.S. Gulf Coast and British Columbia.

Want a job? Come to Kitimat, Christy Clark aide tells Vancouver Island

Economy Link

Robert Matas of the Globe and Mail reports in Crosscheck: Looking for a job in B.C.? that Chilliwack MLA, John Les, parliamentary secretary to BC Premier Christy Clark told an audience in Nanaimo:

Everybody is looking for work around home, but [they] may not be aware that there are jobs available in Kitimat or in Terrace or Fort St. John. That’s not for everybody, but if you’re a young person looking for a job, maybe horizons need to be expanded a bit…

Matas adds in his article:

…up North, the cities are on the cusp of an economic boom, sparked by projects worth $11-billion. The developments are expected to create thousands of new jobs within the next five years.

The list of projects includes a new export terminal near Kitimat for natural gas; modernization of the Rio Tinto Alcan Kitimat smelter; construction of a new 344-kilometre Hydro transmission line that will open up prospects for several more mining properties; a 195-megawatt run-of-river hydroelectric project on Tahltan First Nation lands; and development of a copper and gold property.

The jobs could transform Terrace, a forest-dependent city that has been in a slump since its mills closed down. The mining town of Kitimat has been more stable than Terrace but will also feel the glow from the multibillion-dollar investments in the region…

Editor’s note: One has to wonder why the business media keeps referring to Kitimat as a mining town, since the only mine in the area, the Golden Crown copper and gold venture was abandoned in 1909, more than 100 years ago and Rio Tinto Alcan’s raw material comes from far, far away. (Unless, of course, Matas is referring to some previously unknown revival of the Golden Crown venture is his unnamed copper and gold property)

Japanese utilities using record amounts of LNG: Reuters

Energy

Japan utilities’ LNG usage hits record high in August

Japan’s 10 utilities consumed a
record 4.81 million tonnes of liquefied natural gas in August,
up 15.4 percent from a year earlier, industry data showed on
Tuesday, as they burned more gas to offset a fall in nuclear
power generation.