Pipelines, energy and natural resources

[Czech_pivo]

Taken from the link below."Industry will need to invest capital in growing production to fill the new line, make shipping commitments, as well as invest in a carbon capture project mandated by the federal government"

Alberta Oil Pipeline to Cost Sector $73 Billion, Imperial Says

Alberta’s proposed million-barrel-a-day pipeline to the British Columbia coast will require Canada’s oil industry to invest more than C$100 billion ($72.5 billion),…

financialpost.com

No one is going to invest that kind of cash if not everyone in government is on board from the various provinces and Feds. Sorry for the 10 years it has been an uphill battle for Oil and Gas to get projects approved and off the ground.

There are 2 ways to fill a new 1+million bpd pipeline - add net new production - or - divert existing production from the US over to the new pipeline if the new pipeline sells to the new Asian customers at a higher price......

I suspect that if the price obtained for the oil shipped in the new pipeline is X% higher than what is shipped down to the US today on the existing pipelines that a transition over to the new pipeline will occur.

I'm not sold, at this moment, that there is a requirement to build new production capacity on a 1 to 1 ratio to what the new pipeline may carry.

 

[childs56]

There are 2 ways to fill a new 1+million bpd pipeline - add net new production - or - divert existing production from the US over to the new pipeline if the new pipeline sells to the new Asian customers at a higher price......

I suspect that if the price obtained for the oil shipped in the new pipeline is X% higher than what is shipped down to the US today on the existing pipelines that a transition over to the new pipeline will occur.

Problem is that we have contracts in place to supply X amount of oil for X amount of months/years to each buyer, Hedging. It is why even when oil prices dumped in late 2009/ 2010 and again in 2015 that many companies technically were still busy with their contract. For some they got busier because they had contractual agreements to provide X amount of oil by such and such a date or else loose the contract and or suffer penalties. With the limitations imposed by the Federal and provincial governments in 2016 going into 2016 it caused a bit of panic due to not being able to ship the product, causing some bottle necks and uncertainty.
We do not want to disrupt that market (US)to much. But we can force that market into a higher price if Our Heavy oil fetches a higher margin elsewhere. We have to be careful as the Quick fast easy money sometimes does not outweigh the long term lower money.
Many companies have gone after the top dollar large projects while forgetting their smaller jobs that paid the bills during the downturns.

I'm not sold, at this moment, that there is a requirement to build new production capacity on a 1 to 1 ratio to what the new pipeline may carry.

It is all a matter of prospective. Currently we provide X amount of oil to the market.
If we want to make up short falls in supply from lets say Russia and provide that shortfall to Europe and or Asia then we have to increase production. Otherwise the shortfall is still there and we have to choose who we want to disappoint the least. Do we want new customers or old indirect customers.

 

[Kirkhill]

1,000,000
100
365

36,500,000,000

2 years to recover 72,000,000,000

Did they want to leave that oil in the ground or sell new oil to new markets they didn't have before?

19,000,000 Carbon Capture

6 months of revenue.

Defrayed by government grants from the deferred carbon taxes and offset by variable credits and royalty schemes.

The only people that know the real profit and loss status of these ventures are the ones doing the negotiating. And they are looking for the best deal for their shareholders, be they private investors or provincial and federal taxpayers and benefits claimants.