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Re: The Keystone (XL) Pipeline Pt 2

Unread postPosted: Tue 21 Nov 2017, 16:30:58
And just a reminder: about 98% of everyone in the US oil patch opposes the building of this pipeline as well as all the other projects that enable the increase in the amount of Canadian oil imported into the USA. That also includes 100's of thousands of private land owners.

Re: The Keystone (XL) Pipeline Pt 2

Unread postPosted: Tue 21 Nov 2017, 17:02:34
by jawagord
ROCKMAN wrote:Jaw - All true...if it gets built. I'll explain again how big pipeline projects typically get built. The construction time and payout period tend to be too long for companies to gamble. So they first solicit "subscribers": companies that commit to shipping a fixed amount of oil thru the pipeline for X amount of years at $Y/bbl. This protects the pipeline builder from market volatility. There will be a fixed period of time for subscriptions to be taken. If not enough subscriptions are made in that time period any subscription commitments are voided.

Last time I checked there was a bit of excess pipeline capacity to import Canadian oil. This leaves the new pipeline builders two problems. First, it will have to charge a competitive transport fee. IOW a smaller profit margin the other pipelines that may have already recovered 100% of their costs. Second, even if a lower fee is offered an oil owner might still be bound by its original subscription commitment. Also any existing subscription commitments for the new line are not enforceable until every required permit is in place. Also any lawsuit that halts construction can cause the clock to run out on existing subscriptions. TransCanada kept extending the original subscription period years ago as delays kept extending the border crossing permit. Eventually it cancelled the subscription period.

Rockman TCPL has gotten recommitments for KXL and yes there is excess capacity, not unexpectedly. With the newly imposed route change in NEB who knows how long this will take to sort out and what extra it will cost. On the plus side most of the pipe was bought years ago and most of the design was done years ago so it could be one of the fastest executed big pipelines if it gets the final go ahead.

And may I add I expect 98% of the refineries on the gulf coast support the pipeline along with 100% of the American shareholders of all those Canadian Oil and Gas companies listed on the NYSE, along with the shareholders of the major American Oil and Gas companies that still have operations in Alberta. :wink:

TransCanada’s ‎liquids pipelines President Paul Miller said on a conference call the company has obtained the desired volume commitment of about 500,000 barrels per day. “We do have various conditions attached,” he said, without disclosing the terms from shippers. “I believe the conditions are manageable.” ... 91S0-OCABS

Re: The Keystone (XL) Pipeline Pt 2

Unread postPosted: Tue 21 Nov 2017, 23:33:03
Jaw - Very good: I had not seen news of the 500,000 bopd commitment. But agan the ovewhelming majority of US oil producers would not like to see this line built. Just as they wish the other import lines didn't exist.

Re: The Keystone (XL) Pipeline Pt 2

Unread postPosted: Wed 22 Nov 2017, 11:04:18
by jawagord
ROCKMAN wrote:Jaw - Very good: I had not seen news of the 500,000 bopd commitment. But agan the ovewhelming majority of US oil producers would not like to see this line built. Just as they wish the other import lines didn't exist.

Rockman I'm sure there are more than just your fellow producers and enviros that would be happy if KXL doesn't get built. As you have pointed out several times to the Illuminati on this forum - lack of pipeline capacity isn't preventing Canadian oil from getting to US markets in ever increasing volumes. So KXL is really about market efficiency and there are a host of companies profiting from the current inefficiency. Refiners in Edmonton and Chicago are quite happy to keep getting discounted crude feedstocks, pipeliners in Canada and US profit quite nicely when their lines are at capacity, Warren Buffet's railroad and tank car building companies have done well the last 10 years hauling oil, and then there's the rogue's gallery of sovereign producer states like KSA, Mexico, Venezuela that want to hang on to their US market share..... but eventually all good things come to an end!

Re: Weekly Petroleum Supply Reports 2018

Unread postPosted: Tue 12 Jun 2018, 11:08:59
A huge develop regarding the futures prices of oil sands exports that you’ll never hear about from our MSM. Too many facts for the public to understand. LOL From ... 3-article/

(Bloomberg) -- Enbridge Inc.’s decision to implement and then scrap new rules governing Canada’s biggest export pipeline system sent crude prices on a record roller coaster move this week, earning the pipeline operator both friends and enemies. BP Plc filed a complaint this week with Canada’s National Energy Board saying Enbridge used an “unreasonable exercise of discretion” when it announced and then, 11 days later, canceled new rules governing the amount of oil that shippers were allowed to send through its Mainline system.

Heavy Western Canadian Select crude prices surged by a record $12.20 a barrel relative to U.S. benchmark West Texas Intermediate futures Monday after Enbridge scrapped the rule, which was designed to stop shippers from claiming more space than they needed on the pipeline. Space on the system, the largest link between Alberta’s oil sands and U.S. refineries, has been increasingly rationed, as crude production overwhelmed capacity. Prices had sunk $8.75 a barrel relative to WTI in the days after the new rules were announced on May 24. Suncore Energy Inc. and Canadian Natural Resources Ltd, two of Canada’s biggest oil sands producers, welcomed Enbridge’s reversal, saying the existing rules better ensure producers receive a fairer price for their oil.

A surge of new supply out of Canada’s oil sands this year strained limited pipeline capacity, prompting operators such as Enbridge and Kinder Morgan Inc. to increase the rationing of space on export lines. Enbridge said it was concerned that shippers may be continuing to “inflate” the amount of oil they nominate to ship through the lines each month as they vie for space, according to the May 24 letter announcing the new rule. Enbridge’s new system granted oil shippers allowances for the amount of crude they could send on the Mainline based on a 12-month rolling average, plus 15 percent for heavy crude and 40 percent for light crude. Shippers wishing to send more than their allotted amount would need to show physical proof that they had the extra oil. The company said it changed its mind after discussions with shippers.

The drop in Canadian crude prices relative to futures, known as the differential, after the changes were first announced was an “unintended consequence” of Enbridge’s proposal, Canadian Natural Vice Chair Steve Laut said in an interview in Calgary. The beneficiaries would have been refiners at the end of the pipeline. “Now we’ve got differentials where they should have been all along,” he said. “Enbridge was trying to take some of th dysfunction out of the nomination, apportionment side of the business. I’ve got to give them credit for trying to do that.”Western Canadian Select trades at a discount to WTI, in part, because it must be transported thousands of miles to U.S. refineries by pipeline or rail. The discount, which narrowed to $13.80 a barrel from $26 on Monday, has since widened to $17.80 a barrel, data compiled by Bloomberg show.

Re: The Keystone (XL) Pipeline Pt 2

Unread postPosted: Tue 12 Jun 2018, 11:52:14
by Tanada
In light of ROCKMAN's post above it seems this would be an opportune time for the northern extension of the Keystone XL to get built. It seems that production has caught up to and exceeded current capacity, which is normally a strong signal for more capacity to be constructed.

Re: The Keystone (XL) Pipeline Pt 2

Unread postPosted: Wed 13 Jun 2018, 13:22:22
T - Perhaps. Though proven in the past to not be infallible, the IEA sees the same potential possibility:

"Canada will continue to pump out more barrels from the oilsands over the next few years, but delays to pipeline approvals and uncertainty over the provision of more export capacity is undermining the next wave of development, according to the International Energy Agency. In its annual five-year oil forecast published Monday, the IEA warned that Canadian oil pipeline constraints are part of a wider capacity crisis brewing across North America.

“Colossal growth in North American supply from 2018 to 2023 raises the crucial question of whether there is enough pipeline capacity to transport and sell all of that oil,” the Paris-based agency said in a report. “If sufficient capacity is not built, the increase in production we foresee could be at risk, with serious implications for global markets.” Despite the pipeline shortages, Canada will be among the countries leading growth in oil output over the next few years, taking its overall production to 5.6 million barrels per day by 2023, compared to 4.8 million bpd this year.

But the surge would come at a time of limited export options. “During 2018-19, West Texas and West Canada are likely to face shortages in midstream capacity brought about by a rapid production increase,” the IEA said. “The situation will be much more severe in Canada than West Texas as legal delays mean capacity is unlikely to increase before the end of 2019.”

And this despite the North Dakota Pipe Line substituting for a good portion of the economic justification of the KXL pipeline.