LNG

TC Energy, the North American natural gas pipelines operator with US and Mexican pipelines and the Coastal GasLink to supply Canadian LNG projects, is now counting the cost of the Biden Administration’s 2021 cancellation of the Keystone XL oil pipeline from Canada to the US Midwest.

Pembina Pipeline Corp., the leading Canadian energy pipeline and midstream company with a network of gas gathering, processing and energy export terminals in North America has given a business update including spending plans and a final investment decision date for the planned Cedar LNG project in British Columbia.

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.

SDX Energy, the UK-based oil and gas exploration, production, and development company with working interests in natural gas fields in Egypt and Morocco after a string of discoveries in 2017 and 2018, is facing a takeover battle and may have to bring more cash to the table for existing shareholders.

UK Stock Exchange-listed SDX Energy has been informed by London-headquartered Aleph Commodities Limited that it now commands over 25 percent of the share capital of the company and intends to block an all-share takeover proposed by Canadian company Tenaz Energy Corp. of Calgary, Alberta.

“Through public disclosures and communication with SDX, we have been informed that a shareholder intends to vote against the proposed Scheme of Arrangement to amalgamate Tenaz and SDX,” said a Tenaz Energy statement.

SDX's portfolio includes high impact exploration opportunities in both Egypt and Morocco as well as producing assets in Morocco’s Gharb Basin and the Egyptian Nile Delta.

Natural gas assets in Egypt are the focus of possible LNG or pipeline gas exports and in the case of Morocco domestic gas projects.

Tenaz Energy explained that the takeover required, among other things, that 75 percent of the shares voted by SDX shareholders support the combination for it to become effective.

Strategy change

The Canadian company has now said that it reserved the right to elect to implement the transaction by way of a takeover offer in compliance with the UK Takeover Code and through a co-operation agreement with SDX.

“We are evaluating all available options with respect to the transaction and will provide a further update when appropriate,” stated Tenaz Energy.

A statement from Aleph Commodities by way of explanation made several points on behalf of itself and other parties, who together hold 25.65 percent of the shares.

It stated that the group of shareholders led by Aleph Commodities intended to vote against the recommended all-share combination.

“The shareholder meetings relating to the Scheme of Arrangement are due to be held on 29 July 2022,” noted Aleph Commodities.

“Aleph welcomes the opportunity to engage with management and the Board of Directors to explore opportunities to provide financial, commercial and technical support to SDX to ensure the growth of the company and its production base, with minimal dilution,” it stated

SDX Energy has a working interest in two producing assets in Egypt, a 36.9 percent operated interest in the South Disouq and Ibn Yunus gas fields and a 67.0 percent operated interest in the Ibn Yunus North gas field in the Nile Delta.

It additionally holds a 50 percent non-operated interest in the West Gharib concession, which is located onshore in Egypt’s Eastern Desert, adjacent to the Gulf of Suez.

In Morocco, SDX has a 75 percent working interest in four development and production concessions, all situated in the Gharb Basin.

The producing assets in Morocco are characterised by “attractive gas prices and exceptionally low operating” costs.

TC Energy Corp., the Canada-based North American pipeline company building the Coastal GasLink Pipeline from Dawson Creek to the Royal Dutch Shell-led LNG Canada project at Kitimat in British Columbia, has given a detailed update on work.

TC Energy’s summary of progress on the LNG feed-gas connection came as it reported second-quarter net income of C$1.3 billion (US$937 million) compared with C$1.1Bln (US$880M) in profits for the same period in 2019.

The company stated that it did not expect the Covid-19 pandemic to have any material negative impact on 2020 earnings or cash flows as most of its earnings come from long-term contracts.

For the six months to the end of June TC Energy reported net profits of C$2.4Bln versus C$2.1Bln in the first half of 2019.

The pipeline will be 670 kilometres (416 miles) in length, running from the Dawson Creek area of northeast BC to the Pacific coastal town of Kitimat where the liquefaction plant is being constructed.

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

TC Energy completed project financing after the sale of stakes to equity funds, allowing a full work programme to go ahead.

The transaction released proceeds of around C$2.1 billion (US$1.5Bln) for the Calgary-based operator from the sale to two equity funds, KKR-Keats Pipeline Investors II (Canada) Ltd. (KKR) and a subsidiary of Alberta Investment Management Corp. (AIMCo).

Shell and its four partners in LNG Canada, Mitsubishi Corp. of Japan, Malaysian energy company Petronas, Chinese major PetroChina and Korea Gas Corp., have already started construction of the liquefaction plant and affiliated facilities.

The plant is being built on a brownfield site near Kitimat that had been an energy products terminal before being acquired by Shell in 2011.

The Shell-led export project is working closely with the Haisla First Nation whose traditional lands are in the Kitimat coastal region as well as with other First Nations along the pipeline route.

TC Energy has said it remained committed to partnering with the 20 First Nations who have executed agreements with Coastal GasLink project.

The company has provided an opportunity for them to invest in the project with an option to acquire a 10 percent equity interest in Coastal GasLink.

“The introduction of partners, establishment of dedicated project-level financing facilities, recovery of cash payments through construction for carrying charges on costs incurred and remuneration for costs to date are expected to substantially satisfy our funding requirements through project completion,” explained TC Energy.

“We continue to work with the 20 First Nations that have executed agreements with Coastal GasLink to provide them an opportunity to invest in the project, with an option to acquire a 10 percent equity on similar terms to what has been agreed with KKR and AIMCo,” said the company.

TC Energy said that field activity continued to increase across the project following the spring thaw, with crews re-mobilizing while incorporating Covid-19 guidelines for construction safety.

“Ongoing work activity includes construction of roads, bridges, worker accommodation and right of way grading,” said TC Energy.

Pipe delivery continues with more than 50 percent of required pipe supply having arrived on site and mainline mechanical construction is now starting.

“The project is currently conducting a review of baseline cost and schedule to incorporate scope increases, permit delays and Covid-19 impacts,” added TC Energy.

The Calgary-based company had also announced that it would proceed to build the Keystone XL oil pipeline and commenced construction in April 2020.

“During the first half of 2020, our diversified portfolio of essential energy infrastructure continued to perform very well,” said Russ Girling, TC Energy’s President and Chief Executive.

”I am proud that in these unprecedented times we have continued to deliver the energy and advance projects vital to powering our industries and institutions as well as to the daily life and mobility of millions of North Americans,” added the CEO.

The company stated that despite the challenges brought about by Covid-19, TC Energy's assets “have been largely unimpacted”.

“With few exceptions, flows and utilization levels remain in line with historical and seasonal norms, underscoring their criticality to North American consumers, institutions and commerce,” stated the company.

TC Energy previously announced that it would proceed with construction of the Keystone XL oil pipeline, resulting in an expected additional investment of approximately US$8Bln.

This 1,947km (1210-mile) pipeline will be capable of safely delivering 830,000 barrels per day of crude oil from Hardisty in the Canadian province of Alberta, to the US state of Nebraska.

It will then connect with existing facilities to reach US Gulf Coast refiners to meet critical needs for transportation fuel and manufactured products. Keystone XL is expected to be placed into service in 2023.


The company said that as part of the funding plan, the Government of Alberta has agreed to invest around US$1.1Bln as equity in Keystone XL which substantially covers planned construction costs through the end of 2020.

Murphy Oil, the US exploration and production company whose Rotan natural gas discovery offshore Malaysia is the subject of a floating LNG joint venture with state energy company Petronas, has returned a third-quarter profit after posting a loss in the same three months of 2017.