Spectra Energy to buy stake in two NGL pipelines in US

US-based natural gas infrastructure company Spectra Energy has entered an agreement with DCP Midstream and Phillips 66 to buy one-third stake in two natural gas liquids (NGL) pipelines in Texas, US.

The two under construction NGL pipelines, Sand Hills Pipeline and Southern Hills Pipeline, are currently being developed by DCP Midstream which is a 50-50 joint venture company between Spectra Energy and Phillips 66.

Upon closing of the deal, the three companies will each own one-third interest in the two pipelines and will equally contribute funds for the completion of Sand Hills and Southern Hills pipelines.

Spectra Energy did not disclose the value of the agreement but is expected to invest $700m to $800m in the two pipeline projects.

Spectra Energy president and chief executive officer Greg Ebel said the pipeline projects will complement the company’s current pipeline network in North America.

“As these NGL pipelines begin serving customers later this year and in 2013, they will directly add attractive, stable earnings and cash flow to Spectra Energy’s results,” Ebel added.

The Sand Hills is a 720 miles and 20in pipeline which will transports NGL from Permian Basin and Eagle Ford Shale to key markets on Gulf coast. The initial capacity of 200,000 barrels per day (bpd) can be increased to 350,000 bpd later.

It is expected to be operational in the second quarter of 2013.

The Southern Hills is a 900miles long pipeline which is being constructed to transport NGL from the Mid-Continent to Mont Belvieu in Texas.

It has an initial capacity of 150,000 bpd which can be expanded to 175,000 bpd. The pipeline is scheduled to begin services in mid-2013.

SOURCE: http://transportationandstorage.energy-business-review.com/news/spectra-energy-to-buy-stake-in-two-ngl-pipelines-in-us-021112

TransCanada lands second pipeline deal in Mexico

CALGARY — Mexican authorities have awarded TransCanada Corp. another natural gas pipeline contract.

The Calgary-based company said Monday that it will invest about US$400 million in a 413-kilometre pipeline between El Oro and Mazatlan, near Mexico’s west coast.

The 61-centimetre-diameter pipeline has a contracted capacity of 202 million cubic feet a day and is expected to be in service in the fourth quarter of 2016, TransCanada said.

The Mazatlan pipeline will connect with the US$1-billion Topolobampo pipeline that TransCanada was awarded last week.

TransCanada will build, own and operate the two new pipelines through its Mexican subsidiary, Transportadora de Gas Natural del Noroeste.

Both projects are supported by 25-year natural gas transportation service contracts with the Comision Federal de Electricidad, or CFE, Mexico’s federal power company.

“We are pleased to be working with the government of Mexico on new natural gas infrastructure that will bring its cleaner-burning natural gas to businesses and residents,” said TransCanada president and CEO Russ Girling.

“These new projects build on our experience developing safe and reliable pipelines in Mexico and across North America.”

TransCanada already has one of North America’s largest networks of gas and oil pipelines, including two natural gas lines already operating in central Mexico. The company built, owns and operates the Guadalajara and Tamazunchale natural gas pipelines in central Mexico and will soon break ground on a Tamazunchale pipeline extension.

Besides is network of some 68,500 kilometres of natural gas pipelines that tap into virtually all major gas supply basins in North America, TransCanada is also developing one of North America’s largest oil delivery systems, including the controversial Keystone XL pipeline designed to transport Canadian crude to refineries on the Texas Gulf Coast.

The company began work this summer on a US$2.3-billion crude pipeline connecting an oil storage hub at Cushing Okla., to Texas refineries that is expected to start up in 2013. The Gulf Coast pipeline was initially part of TransCanada’s $7.6-billion Keystone XL proposal but has been held up by political and environmental wrangling in the United States.

Meanwhile, TransCanada is also one of the continent’s largest providers of gas storage and related services with approximately 380 billion cubic feet of storage capacity and has interests in more than 10,900 megawatts of power generation in Canada and the United States.

SOURCE: http://business.financialpost.com/2012/11/05/transcanada-lands-second-pipeline-deal-in-mexico/

Update on MATCOR’s Operational Status – Doylestown, PA

MATCOROn Monday night, Doylestown PA, home of MATCOR’s Head Office and Manufacturing Plant, along with millions of other businesses and homes in the North East of the United States lost power due to the wind gusts in excess of 80 MPH throughout the region.

Thankfully, the MATCOR facilities did not sustain any physical damage to the infrastructure, however the MATCOR offices were without power until late Thursday evening (November 1). We were able to adopt a back-up communcations plan via our Houston location, and kept everyone informed with status updates on our website, Facebook page and Twitter account.

We are pleased to announce that the power has been restored to certain areas of the Doylestown, PA area, and the MATCOR Head Office and Manufacturing Plant are back online and running at 100% capacity. Many team members were onsite Thursday evening making sure MATCOR would be fully-operational today.

We sincerely apologize for the inconvenience and the interpution that may have been caused as a result of Superstorm Sandy. We are doing everything we can to minimize the impact and disruption.

Thank you for your business, your understanding, and continued support of MATCOR.

If you have any questions about project orders and delivery dates, please contact +1 215 348 2974.

Sunshine Oilsands Plans $3.5 Billion in Capital Investment

China-backed Sunshine Oilsands Ltd. has budgeted about US$3.5 billion for capital investment in its Canadian oil-sands projects at a time when investors are on edge about the investment climate in energy-rich Canada.

The Calgary-based energy company’s projects are still in a preliminary stage, but it is aiming for its first production in the fourth quarter of 2013, with output of 5,000 barrels a day by mid-2014, Co-Chairman Shen Songning said in an interview.

Mr. Shen’s optimism about the projects—based in Athabasca Sands, Alberta—comes at a tense time for Chinese and other foreign investors hoping to capitalize on Canada’s huge reserves of oil and natural gas, much of which are expensive to extract as they are trapped in oil-sands deposits or in shale-rock formations.

Last month, the Canadian government turned down a US$5.18 billion bid by Malaysia’s state-run Petroliam Nasional Bhd., or Petronas, to acquire Canada’s Progress Energy Corp. The bid isn’t dead, however, as the two sides have agreed to resume talks on the purchase.

Next week, the government is expected to rule on the US$15.1 billion purchase of Canada’s Nexen Inc. NXY.T +0.78% by China’s Cnooc Ltd. 0883.HK +1.24%

The two deals are a litmus test for Canada’s aspirations to develop its oil and gas reserves and find new export markets at a time when its main buyer, the U.S., is cutting energy imports due to the success of shale projects there.

“Conventional oil supply is in demand and global production is expected to transition toward unconventional sources,” said Mr. Shen. “We see Canada’s oil sands playing a major role in meeting the needs of the world’s growing crude demand.”

Oil sands—a mix of sand and tarlike ultraheavy crude oil called bitumen—are costly to refine, but higher crude prices in recent years have made production from oil sands more feasible. Canada’s oil sands will likely account for 4.4% of global crude-oil output by 2035, up from 1.6% in 2009, the International Energy Agency has said.

Mr. Shen said the US$3.5 billion expenditure will be funded by cash flow from existing projects and potential energy joint ventures, as well as bank loans and proceeds from Sunshine Oilsands’ Hong Kong initial public offering in March. Possible joint-venture investors include China sovereign-wealth fund China Investment Corp. and China oil company China Petrochemical Corp., also known as Sinopec Group.

The company’s oil-sands projects can achieve positive cash flow per barrel when West Texas Intermediate prices are above US$50 a barrel, Mr. Shen said.

“We see oil prices hovering around US$100 a barrel over the next three to five years as demand for oil is rising on the back of strong economic growth in Asia,” he said. He didn’t specify whether he was referring to benchmark West Texas Intermediate or Brent crude.

He also said the company’s operations could benefit from falling natural-gas prices, because fuel costs account for 20% of Sunshine Oilsands’ total production expenses.

Sunshine Oilsands, which raised $579 million from the Hong Kong IPO, is planning a secondary listing in Toronto in the fourth quarter to increase shareholder value. The company’s share price has fallen 46% in Hong Kong since the stock’s debut.

“Our current share prices are extremely undervalued,” Mr. Shen said, adding the company’s net asset value per share is at 21.40 Hong Kong dollars (US$2.76). Shares in Sunshine Oilsands closed at HK$2.62 on Thursday.

In response to the decline in its share price, Sunshine Oilsands recently announced a $50 million share-repurchase program.

SOURCE: http://online.wsj.com/article/SB10001424052970204712904578092052566429508.html

TransCanada to invest $1-billion in Mexican natural gas pipeline

TransCanada Corp. plans to invest about $1-billion (U.S.) in a new natural gas pipeline in Mexico.

The Calgary-based pipeline giant announced Thursday that it has been awarded a contract to build, own and operate the pipeline by Mexico’s federal power company, the Comision Federal de Electricidad or CFE.

The 530-kilometre-long El Encino-to-Topolobampo pipeline will have a contracted capacity of 670 million cubic feet per day and is supported by a 25-year natural gas transportation services contract.

“Mexico’s government is engaged in a comprehensive plan to expand the nation’s electrical grid and generating capacity and much of that generation will be natural gas fired,” TransCanada president and CEO Russ Girling said in making the announcement.

“This award is another example of TransCanada’s commitment to help develop Mexico’s energy infrastructure in a sustainable and cost-efficient manner.”

The Topolobampo pipeline begins in El Encino, in Chihuahua state, and terminates in Topolobampo, in Sinaloa state, interconnecting with other pipelines that are expected to be built as a result of separate bid processes by the CFE.

Mr. Girling said TransCanada is bidding on a number of CFE proposals. The company has already built and is operating the Guadalajara and Tamazunchale pipelines and will soon break ground on a Tamazunchale pipeline extension.

TransCanada operates a network of natural gas pipelines that extends more than 68,500 kilometres and tap into virtually all major gas supply basins in North America. It is also developing one of North America’s largest oil delivery systems.

The company began work this summer on a $2.3-billion crude pipeline connecting an oil storage hub at Cushing Okla., to Texas refineries. It’s expected to start up in mid to late 2013.

The Gulf Coast pipeline was initially part of TransCanada’s $7.6-billion Keystone XL proposal, which would have sent Alberta crude to the Gulf via six U.S. states but has been held up by political and environmental wrangling in the United States.

SOURCE: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/transcanada-to-invest-1-billion-in-mexican-natural-gas-pipeline/article4809829/