Isnin, 21 April 2014

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The Star Online: Business

Keystone backers keep faith in embattled pipeline

Posted: 21 Apr 2014 07:02 PM PDT

CALGARY/VANCOUVER: Six years after applying to build the Keystone XL pipeline, Canada's frustrated oil industry appears steadfast in its support of the plan, even though Washington has again delayed a decision on whether to approve the politically-charged project.

The reason is simple: A massive new pipeline to the US Gulf Coast remains the most elegant solution for producers looking to export burgeoning supplies of crude from Canada's oil sands to the US.

TransCanada Corp's US$5.4bil pipeline would seamlessly pump enough crude from Alberta to Texas to meet 4% of total US demand.

"We're definitely supportive of the project," said Brad Bellows, a spokesman for MEG Energy Corp, which produces crude from Alberta's oil sands though it has not committed to ship on Keystone. "It's good for the whole circulatory system of the energy industry."

That is not to say the latest setback for the ambitious project sits well with its backers. And the decision could build momentum behind a host of other pipelines proposals as well as plans to expand shipments of oil by rail.

But those options, as currently configured, could only supplement, not replace, the export capacity of the massive Keystone project, experts say.

"There's never certainty that any one pipeline will be approved. We've made commitments to the East Coast, the Gulf Coast and the West Coast, plus rail," said Rhona DelFrari, a spokeswoman for Cenovus Energy Inc, one of the largest developers of Alberta's massive oil sands reserves. "There's always a Plan B and a Plan C as well."


Citing uncertainty over Keystone's route because of a legal dispute in Nebraska, the Obama administration said on Friday it would allow more time for federal agencies to weigh in on the project. As a result, it is likely a decision will not occur before November elections.

In response, TransCanada said it was "disappointed and frustrated" with the fresh delay, which comes more than five years after it first applied to build the pipelines.

"Another delay is inexplicable," Russ Girling, the company's chief executive officer, said. He pointed out that the first leg of the Keystone pipeline, which runs from Hardisty, Alberta, to Cushing, Oklahoma, took only 21 months to study and approve.

Keystone XL, which could start operating two years after it gets a final approval, would run from Alberta to Steele City, Nebraska, where it will meet the project's southern stretch.

Despite the latest setback, none of the companies that have signed up for space on the line have backed out. Indeed, TransCanada says that it has a waiting list of companies keen to sign up.

The line's shippers have remained loyal in part because they have signed contracts. More importantly, rising Canadian production means more lines are already needed.

In 2008, when Keystone XL was first proposed, Canada's exported 1.1 million barrels of crude per day to the US. This year, exports are nearing 2.7 million bpd on higher oil sands production and another million bpd more is expected over the next few years, according to industry data.


To be sure, projects that would complement or perhaps even help make up for a Keystone rejection have proliferated.

Taking advantage of tight pipeline capacity, rail terminals are expanding so quickly they could ferry more than 1 million barrels per day (bpd) of crude to US refiners in two years, more than Keystone's 830,000-bpd capacity, a survey has shown.

TransCanada itself may also be able to speed up efforts to build the 1.1 million-bpd Energy East pipeline, ranking as Canada's largest, to take Alberta crude oil to refineries and export ports in Quebec and New Brunswick. The project would sidestep the US political wrangle that has ensnared Keystone.

"In the worst case scenario, where Keystone XL is denied ... we actually imagine that the Energy East project is accelerated and by accelerated, I mean they get it online around 2017," David McColl, an analyst with Morningstar Inc.

With refiners in Canada's traditional Midwest market already sated with crude, Keystone XL is seen as an important conduit for getting crude to the Gulf Coast, where it can supply the largest cluster of refineries in the S.

Most have turned to shipping crude by rail-tanker. Once a sideline for getting oil to market, producers such as Canadian Natural Resources Ltd, Suncor Energy Inc and MEG are pouring investment into more costly crude-by-rail infrastructure in an attempt to bridge the gap.

"Rail coming out of Western Canada is going to become more and more important in the near term, and producers and midstream companies are already really aggressively moving to increase capacity for rail," said McColl.


Still, rail is an expensive option. A host of options that skip the US entirely have won the support of Canadian producers anxious to find better-paying alternatives.

"Our focus will continue to be on supporting a portfolio of market access options," said David Collyer, president of the Canadian Association of Petroleum Producers, a lobby group representing the country's largest oil producers.

Both Enbridge Inc and Kinder Morgan Energy Partners LP are planning lines to take landlocked Alberta crude to export ports on the Pacific.

Though it faces opposition from aboriginal and environmental groups, Enbridge's Northern Gateway line would carry oil sands crude to the port of Kitimat, British Columbia. Regulators have already cleared the project. It awaits final approval from the Canadian government.

Kinder Morgan plans to nearly triple the capacity of its existing Trans Mountain pipeline to carry 890,000 barrels per day from Edmonton to Vancouver, but the project is not slated to complete regulatory hearings until mid-2015. – Reuters 

KLCI ekes out slight gains

Posted: 21 Apr 2014 06:41 PM PDT

KUALA LUMPUR: The FBM KLCI eked out marginal gains in early Tuesday trade, extending the winning streak from Monday, amid firmer investor sentiment but analysts expect some profit taking later.

At 9.29am, the KLCI was up 0.23 of a point to 1,863.16. Turnover was 433.98mil shares valued at RM166.43mil.  There were 264 gainers, 145 losers and 274 counters unchanged.

BIMB Securities Research said the KLCI's 10.24-point gains to close at 1,862.93 on Monday was supported by gains made by banking stocks.

"We reckon buying may be instigated by local funds as foreign participation had falter to a net outflow of RM75mil yesterday.

"We expect the market to retrace a bit today amid some profit taking activities with 1,850/55 as the immediate support levels," it said.

United  Plantations was the top gainer, albeit in thin trade of 200 shares done, adding 30 sen to RM25.78. Keck Seng added six sen to RM7.13.

Petron Malaysia rose 12 sen to RM3.04, NCB added 11 sen to RM3.18 while up nine sen each were MPI, MyEG and Hartalega to RM4.25, RM2.79 and RM6.50 respectively.

Among finance stocks, HL Cap lost  12 sen to RM12.12  and HLFG  eight sen to RM15.22.

DKSH fell 16 sen to RM8.20 on profit taking while and Datasonic lost 11 sen to RM3.63. 

Palm oil/Vegoils: market factors to watch April 22 (Tuesday)

Posted: 21 Apr 2014 05:53 PM PDT

KUALA LUMPUR: The following factors are likely to influence Malaysian palm oil futures and other vegetable oil markets on Tuesday.
* Malaysian palm oil futures ended higher on Monday after two days of losses, as
investors pinned hopes for an increase in demand ahead of a major Muslim
festival despite a surprise drop in exports in the first 20 days of the
* U.S. wheat futures fell the most in more than a year on Monday as rains
expected in the drought-stricken U.S. Plains raised hopes for the upcoming
* Brent crude oil strengthened slightly while U.S. crude futures were briefly
supported by positive economic data on Monday but prices were range-bound in low
volumes following Easter Sunday with no significant escalation in tensions over
* Asian shares were supported on Tuesday after Wall Street stocks extended gains
into a fifth day, though investors continued to see tensions in Ukraine as a
threat to risk appetite. 
> Malaysia's Apr 1-20 palm oil exports fell 6.0 pct -SGS      
> Malaysia's April 1-20 palm oil exports fall 5.9 pct -ITS    
> Indonesia's monthly palm oil exports up 13 pct m/m in March 
> Argentina moves to eliminate taxes paid by biodiesel producers 
> Shell says Martinez refinery operating at planned rates   
> Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance
to release Malaysia's April 1-25 palm oil export data on April 25.
  Palm, soy and crude oil prices at 0050 GMT
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAY4       0    +0.00       0       0       0
  MY PALM OIL      JUN4       0    +0.00       0       0       0
  MY PALM OIL      JUL4       0    +0.00       0       0       0
  CHINA PALM OLEIN SEP4       0    +0.00       0       0       0
  CHINA SOYOIL     SEP4       0    +0.00       0       0       0
  CBOT SOY OIL     JUL4   43.24    -0.02   43.21   43.40     964
  NYMEX CRUDE      MAY4  104.24    -0.13  104.24  104.36    1003
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
 - Reuters


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