China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
The Globe and Mail reports on Friday that MEG Energy, a small oil sands developer partly owned by China’s CNOOC, has ponied up $100 million to join another Chinese state-owned firm Sinopec as financial backers of a planned pipeline from the oil sands to the northern British Columbia coast.
Slowing demand in the US is adding pressure for a go-ahead on the Northern Gateway pipeline that will stretch for more than 1,100km at a cost of $5.5 billion affording Canada world prices for its oil, currently priced against heavily discounted US crude. Regulatory hearings are scheduled to start in January.
The Globe and Mail reports each funder gains the right to discounted shipping rates and an option to buy an equity stake at a later date.
Reuters reports last week, Enbridge (NYSE:ENB) said it and would-be shippers had agreed to terms for moving oil on Northern Gateway, a big commercial step and quotes MEG (TSE:MEG) spokesman Brad Bellows as saying: “If there are opportunities to extend the reach of where our oil sands product goes, we think it’s a good thing.”
Accessing Asian markets (Japan, South Korea, China, Taiwan and Singapore) would ensure world prices for Western Canada’s oil. The price Canada can charge for crude exports to the US have been falling further behind North Sea Brent, the international benchmark, because of a glut in the Midwest.
On Friday the spread between West Texas Intermediate and Brent reached a near record margin of over $26 a barrel. Western Canada Select in turn trades at around $15 a barrel below US levels which on Friday was $87 a barrel.
The pipeline will have the capacity to export approximately 525,000 barrels of oil per day and import approximately 193,000 barrels of condensate a day. The pipelines will be buried at a depth of one metre in a 25-metre wide right-of-way.
The Kitimat Marine Terminal will include two ship berths and 14 tanks for oil and condensate, which thins heavier oil products. Some 220 tankers would transport the Alberta crude to markets across the Pacific annually.
MINING.com reported on influential magazine National Geographic’s profile of the Northern Gateway project titled Pipeline Through Paradise which appeared in July.
3 Comments
upstreamoilguy
Looking forward to recieving full value for our CDN HOIL. The US liberals and ecoterrorists can have their way and freeze in the winter and swelter in the summer for all I care!
Keo
Now that we will be able to sell our oil at world prices the US considers us a threat and that is why that windbag Al Gore is calling the oilsands “dirty oil” in hopes that other countries will not buy it. The new sites that are coming online are now so efficient and clean you would never know they are making oil when you enter the site, and the companies that have been around for awhile are constantly evolving to improve the process making it cleaner and pumping millions of dollars into R&D.
Rock on Canada!
Biddulph Art
i REALLY DO NOT understand why Canada has to take less for oil other than we don’t
have another customer. the usa should pay the world price to us. I bet the usa doesn’t
discount anything for Canadians.