LNG

The Premier of the Canadian oil and gas province of Alberta said the provincial government aimed to invoke the sovereignty act to reject Federal clean energy regulations aimed at Alberta’s gas-fired power plants.

Canadian liquefied natural gas will be in the spotlight as the world’s energy leaders take the stage at LNG2023, the pre-eminent meeting of the international LNG industry set to take place soon in Vancouver in British Columbia.

The LNG and natural gas industry will meet from July 10 to July 13 for a conference and exhibition hosted by the Canadian Gas Association (CGA) and which is the 20th edition of the largest triennial LNG event.

Up to 15,000 delegates and stakeholders from more than 85 countries are expected to attend LNG2023.

The organisers said that the event would feature more than 250 speakers and 150 exhibitors, providing delegates an essential voice in the “vital discourse on LNG’s role in ensuring future energy stability, sustainability and affordability” in the years to come.

“Canada is on the cusp of becoming an LNG exporting leader in a world demanding reliable, sustainable sources of responsibly produced energy,” says Jason Klein, the Chief Executive of LNG Canada, the Shell-led project in BC. Klein will open the conference on July 10 with a leadership dialogue session.

Global security

Klein intends to talk about ways the LNG Canada joint venture under construction in Kitimat on the traditional territory of the Haisla Nation can help provide global energy security while reducing global greenhouse-gas emissions by supplying LNG to displace coal as an energy source in Asia.

“Our future LNG business will provide security of supply for global markets that rely on Canada’s natural gas reserves to fuel their economies, reduce global GHG emissions as natural gas replaces the use of coal and brings significant economic growth and stability to British Columbia,” Klein explained.

Along with the many Canadian delegates and exhibitors, several Canadian industry and Indigenous leaders will represent the country at the global event.

Crystal Smith, Chair of the First Nations LNG Alliance, and Sharleen Gale, Chief Councillor of the Fort Nelson First Nation, will join energy leaders in discussing the important role LNG projects play in Indigenous reconciliation.

Also set to speak is Greg Ebel, CEO of Canada-based Enbridge Inc., which is a leading pipeline natural gas company and a growing supplier of North American LNG feed gas. Ebel will discuss LNG’s role in “facilitating an orderly” energy transition.

Mike Rose, President and CEO of energy company Tourmaline, has said he will focus on how the environmental impact of the LNG supply chain has been reduced through innovations in methane and carbon emissions mitigation.

The Canadian Gas Association said it intended to showcase Canadian organizations and innovations in a dedicated Canadian industry pavilion.

“CGA members include energy distribution and transmission companies, equipment manufacturers, and suppliers of goods and services to the industry and meet 38 percent of Canada’s energy needs,” the body noted.

Essential forum

Mel Ydreos, Executive Director of LNG2023, said the event would be an essential forum to understand the evolving policy environment and the latest technological advances.

“LNG will be crucial to resolving the global energy crisis and securing a reliable pathway to deeper decarbonisation,” stated Ydreos.

LNG2023 is presented by the International Gas Union (IGU), GTI Energy and the International Institute of Refrigeration (IIR).

For information or tickets visit www.lng2023.org

Stonepeak, the New York-based investment firm specializing in energy infrastructure, has completed the acquisition of a 50 percent interest in the Key Access Pipeline System (KAPS), a Canadian natural gas liquids pipeline that will impact future feed-gas needs for LNG exports from Western Canada.

Pembina Pipeline Corp., the Canadian pipelines company and joint owner of the Cedar floating liquefied natural gas project, has issued a business update for 2023, including the sale of the company’s interest in Pembina Gas Infrastructure's Key Access Pipeline System.

Brookfield Infrastructure Partners of Canada has raised its hostile takeover bid for Inter Pipeline Ltd to about C$8.58 billion (US$6.86Bln) to counter for a second time a bid from Pembina Pipeline Corp., the joint venture partner of the Cedar LNG project in British Columbia.

Pembina had made an all-stock bid of about C$8.50 billion, or C$19.7 per share, while Brookfield has trumped that offer with an all-cash option.

Brookfield is based in Toronto in the province of Ontario while Inter Pipeline and Pembina have their headquarters in Calgary, capital of the oil and gas province of Alberta.

Brookfield said Inter Pipeline shareholders could now choose to receive either C$20.00 per share in cash or 0.25 of a share of Brookfield Infrastructure Corp, which translates into C$23.85 for each Inter share.

“The increased offer provides superior value to Inter Pipeline shareholders, representing a premium of C$1.53 or 8 percent versus the proposed transaction with Pembina Pipeline,” stated Brookfield.

It had previously offered about C$19.50 in all-cash per Inter share, or 0.225 of Brookfield’s Class A share.

Inter Pipeline had already recommended that shareholders vote for the offer from Pembina.

The sweetened offer from Brookfield came a day after the Alberta Securities Commission ruled that Inter did not engage in any improper defensive tactics to fend off Brookfield’s first hostile takeover bid.

Bidding war

The bidding war is for Inter Pipelines oil and gas pipeline assets, located mainly in Western Canada, as well as its storage facilities and processing plants.

Pembina, the joint developer of the Cedar floating LNG joint venture in BC with the Haisla First Nation, also owns the rejected Jordan Cove LNG export project in the northwest US state of Oregon.

Pembina’s Jordan Cove project was the first hydrocarbon venture stopped by the federal regulators under the Biden Administration, even before the Keystone XL pipeline cancellation by presidential decree.

The Jordan Cove liquefaction plant was proposed for a 200-acre site at Coos Bay in Oregon, comprising five small-scale Trains, each with 1.5 million tonnes per annum of output, for a total of 7.5 MTPA.

The Jordan Cove project also included the separate 230-mile Pacific Connector Pipeline traversing four counties in southern Oregon on the route to the liquefaction plant and feed gas would have been sourced from the Rockies.

Since the Jordan Cove cancellation in January 2021, Pembina has teamed up in a 50-50 partnership with the Haisla Nation for the proposed Cedar project in the Douglas Channel near the BC town of Kitimat.

Cedar LNG is expected have a liquefaction capacity of around 3 MTPA of LNG and will source natural gas from the prolific Montney resource play in northeast BC.

'Strategic Combination'

Under the “Strategic Combination”, Inter Pipeline shareholders would have receive 0.5 of a common share of Pembina for each common share of Inter Pipeline.

This represented an immediate value of $20.06 per share based on the closing price of Pembina's common shares.

Pembina and Inter Pipeline shareholders would have owned 72 percent and 28 percent respectively of the combined Pembina-Inter company.

Pembina had said that among the significant benefits for Inter Pipeline was being included in the partnerships with First Nations to develop Cedar LNG and to pursue ownership of Trans Mountain Pipeline and Expansion.

Pembina was chosen by the Western Indigenous Pipeline Group to be the industry partner in the formation of the Chinook Pathways Partnership.

Chinook Pathways is an Indigenous-led partnership working to organize a significant number of First Nation communities to pursue ownership of the Trans-Mountain Pipeline following completion of the construction of the Trans-Mountain Expansion.

Pembina Pipeline Corp., developer of the now blocked Jordan Cove LNG export plant in the US northwest state of Oregon, took a hit in its fourth-quarter earnings after the project was the first hydrocarbon venture stopped by the Biden Administration, though Pembina said Jordan Cove and two other ventures remained in its strategy.

TC Energy, the Canada-based North American pipeline company, said it was working with the Royal Dutch Shell-led LNG Canada project on establishing a revised project schedule for the Coastal GasLink as delays are inevitable along with higher costs due to scope expansion, permit delays and the impacts from Covid-19.

TC Energy Corp., one of North America’s leading pipeline companies involved in multiple projects such as bringing feed-gas to the LNG Canada project and US gas supplies to Mexico, said it was disappointed with the expected action to revoke the existing Presidential permit for its Keystone XL pipeline.

TC Energy, based in Calgary in the Canadian province of Alberta, said the decision by the new US Administration would impact thousands of union jobs, new renewable energy investments and opportunities for Indigenous communities.

“The decision would overturn an unprecedented, comprehensive regulatory process that lasted more than a decade and repeatedly concluded the pipeline would transport much needed energy in an environmentally responsible way while enhancing North American energy security,” said TC Energy.

The initial permit award by the previous Administration to construct the Keystone oil pipeline resulted in an additional investment of around US$8Bln.

This 1,947km (1,210-mile) pipeline was designed to deliver 830,000 barrels per day of crude oil from Hardisty in the Canadian province of Alberta to the US state of Nebraska.

It would then have connected with existing facilities to reach US Gulf Coast refiners to meet critical needs for transportation fuel and manufactured products. Keystone XL had been expected to be placed into service in 2023.

As part of the funding plan, the provincial Canadian government of Alberta had agreed to invest around US$1.1Bln as equity in Keystone XL which substantially covered some construction costs.

TC Energy said the action by the Biden Administration on the Keystone XL would directly lead to the lay-off of thousands of workers and negatively impact ground-breaking industry commitments as well as “historic” equity partnerships with native North Americans.

It is the second Canadian-led multi-billion dollar project to be cancelled by the new US Administration following the reversal of a construction permit for the Jordan Cove LNG project in the northwest US state of Oregon being developed by Calgary-based Pembina Pipeline Corp.

TC Energy said it would review the US decision, assess its implications, and consider its options.

At the same time, TC Energy declared that the news from Washington DC was very disappointing and extended its regrets to the many, many thousands of people affected.

“TC Energy is thankful to its customers, American and Canadian workers, our partners the Government of Alberta and Natural Law Energy, labor organizations, industry, the Government of Canada and the countless supporters of this important energy infrastructure project,” the company declared.

TC Energy added that the revocation of the permit means that the advancement of the project is now officially suspended.

“The company will cease capitalizing costs, including interest during construction, effective January 20, 2021, being the date of the decision, and will evaluate the carrying value of its investment in the pipeline, net of project recoveries,” explained TC Energy.

Among its other projects, TC Energy is also building the Coastal GasLink Pipeline from Dawson Creek to the Royal Dutch Shell-led LNG Canada project at Kitimat in British Columbia.

That pipeline will be 670 kilometres (416 miles) in length and provide feed-gas for the liquefaction plant currently under constructed.

Once completed, the pipeline will connect abundant Western Canadian Sedimentary Basin natural gas supply to the Shell-operated liquefaction plant.

TC Energy informed investors that if there were no intervening actions on Keystone, this US action would result in a potentially large non-cash after-tax charge to earnings in the first quarter of 2021.

“Our base business continues to perform very well and, aside from Keystone XL, we are advancing $25 billion of secured capital projects along with a robust portfolio of other similarly high quality opportunities under development,” said François Poirier, TC Energy’s President and Chief Executive.

“These initiatives are expected to generate growth in earnings and cash flow per share and support annual dividend increases of 8 percent to 10 percent in 2021 and 5 percent to 7 percent thereafter,” added the CEO. 

Enbridge Inc., the Canadian company whose natural gas pipelines span North America to connect supply basins, urban demand centres as well as LNG export plants, is caught up in a battle just revived by the Democratic Party governor of the US state of Michigan.

Pieridae Energy, the developer of the German-backed Goldboro LNG project in the Canadian Atlantic province of Nova Scotia, has had its purchase of Royal Dutch Shell’s midstream and upstream assets in the southern foothills of Alberta blocked by the provincial regulator.