Ontario, Quebec to craft united stand on Energy East pipeline project

Ontario, Quebec to craft united stand on Energy East pipeline project
Shawn McCarthy
OTTAWA — The Globe and Mail
Published Friday, Nov. 21 2014, 3:00 AM EST
Last updated Friday, Nov. 21 2014, 5:04 AM EST
Ontario and Quebec are forging a common strategy on TransCanada Corp.’s $12-billion Energy East pipeline project to address its impact on greenhouse gas emissions and to ensure that their natural gas customers will not be disadvantaged.
Kathleen Wynne and Philippe Couillard are meeting in Toronto on Friday for a joint cabinet session. Officials confirmed that Energy East will be on the agenda, and the premiers plan to release a joint statement on the project.
The two Liberals are allies in pushing the climate agenda to the forefront in provincial/territorial talks, arguing there needs to be a national energy strategy that focuses on both pipelines and emissions. Prime Minister Stephen Harper has rejected the idea, and endorsed Energy East as an important link to bring western oil to eastern refiners and export terminals.
TransCanada is facing major hurdles in Quebec. This week Quebec Environment Minister David Heurtel sent a letter to chief executive officer Russ Girling laying down seven conditions TransCanada must meet to win the province’s support for the project.
With his letter, Mr. Heurtel established conditions similar to those adopted by British Columbia Premier Christy Clark for Enbridge Inc.’s controversial Northern Gateway pipeline that would deliver oil sands bitumen to Kitimat for export to Asia, though his tone was somewhat more agreeable than Ms. Clark’s has been. Mr. Heurtel’s conditions include the need for public acceptance of the project, for proper consultations with First Nations, and for clear economic and fiscal benefits for Quebec, as well as assurances to gas customers.
Mr. Heurtel also cited a National Assembly resolution demanding the government assess the impacts of “upstream” GHG emissions – those produced by extracting the oil – for the pipeline that would carry 1.1 million barrels a day of western crude to market. But he was vague on whether the government will assert the right to block the pipeline. TransCanada would face huge risks of political backlash if it proceeded in the face of provincial opposition.
Company spokesman Tim Duboyce said TransCanada had no comment on Mr. Heurtel’s letter which is “complex in nature.”
The company’s case took another blow this week with the leak of a public relations strategy that advocated controversial tactics for blunting opposition and winning government support in the province.
With Energy East, TransCanada would convert capacity on its west-to-east natural gas system to carry oil from Alberta to the Quebec-Ontario border, and then build a new pipeline and export terminals in Quebec and New Brunswick.
The project “faces a huge uphill battle in Quebec,” said Erick Lachapelle, a political scientist at the University of Montreal who released his own polling Thursday suggesting the project has the support of only 33 per cent of Quebeckers. “The public doesn’t see any benefits from the project and the public sees all the risks of Alberta exporting its oil through Quebec.”
TransCanada says the central Canadian provinces will reap billions of dollars in tax revenues and see thousands of construction jobs – as well as manufacturing jobs from the supply of components for the project. As well, Energy East will bring Canadian crude to refineries in Quebec and New Brunswick that now mostly rely on imports or rail transport.
For its part, Ontario has asked its provincial energy board to conduct its own assessment of the project, and provide a report to the government, which will intervene in National Energy Board hearings to be held on Energy East. The province is also expected to take into account climate impacts.
The federal energy board does not assess the upstream GHG impacts in its pipeline applications, on the grounds that it is not clear whether any one project results in more oil production and hence higher emissions. But Ontario and Quebec want a national plan to address GHG emissions in exchange for their support for Alberta’s oil transportation needs.
Meanwhile, natural gas utilities in Ontario and Quebec have asked the National Energy Board to order TransCanada to do a new assessment of gas needs in the two provinces, saying the analysis in its Energy East filing made last month is “seriously deficient.” The local gas utilities say the conversion of gas capacity to allow oil exports will leave their customers vulnerable to winter shortages and price spikes.
TransCanada rejects that argument.
“From our perspective, I think it will become exceedingly clear as time goes on that there are no issues whatsoever with gas supply for Quebec or Ontario consumers,” company president Alex Pourbais said Wednesday on a conference call. “And in fact we’ve committed to lower [gas transmission] costs than there would have been without [Energy East].”
With a report from Jeff Lewis in Calgary

Pictures of Russian potash mine disaster #potash

Insane pictures of Russian potash mine disaster

November 20, 2014

Solikamsk-2 accident first implications: situation could worsen

After a statement made by one of the world’s largest potash producers and exporters Uralkali (MCX:URKA)(LON:URALL), first visual implications of Solikamsk-2 potash mine accident have been revealed.

A sinkhole with a diameter of 30-40 meters has been detected to the east of the Solikamsk-2 production site, at the area packed with summer cottages. There were no casualties reported so far.

Potash sinkhole 1

Some experts do believe that producing Solikamsk-1 mine adjacent to flooded Solikamsk-2 mine, likely to be flooded also, but it will not happen soon since there are two safety barriers installed between mines, – a 20 meters concrete wall and a 200 meters pillar, which entirely consists of potassium salt (see picture below).

Potash sinkhole 2
Potentially, fresh water could mix with the brine in a flooded mine, which in turn may create microfractures in a concrete wall by that time.

Potash sinkhole 3


Tectonic fractures are other possible way water/brine mix may penetrate and dissolve protective pillar.
Theoretically, this process may take years, if it really happens.
We will continue to monitor Uralkali’s official statements in this regard.

Russian Sinkhole Imperils Uralkali Rating as Potash Mine Floods #potash

Russian Sinkhole Imperils Uralkali Rating as Mine Floods
By Yuliya Fedorinova and Ksenia Galouchko Nov 21, 2014 6:24 AM CT
Bloomberg
The briny floodwater threatening to wash away a fifth of OAO Uralkali’s output also imperils the potash producer’s investment-grade rating.
Potash sinkhole
The yield on the April 2018 dollar notes of Russia’s largest potash miner surged 1.73 percentage points this week, set for the biggest jump since the securities were sold in April last year, and set a record 7.77 percent. That drove the extra yield investors demand to hold the bonds instead of similar-maturity debt of Potash Corp. of Saskatchewan Inc. to 6.22 percentage points yesterday, the most on record.
Having halted operations at the mine, the shutdown could cost the company its investment-grade ratings as bondholders recall a more than 100-meter (328 feet) wide sinkhole that closed a Uralkali mine in 2007, according to Sberbank CIB. Rising water flows forced the Berezniki-based company to evacuate its Solikamsk-2 mine about 1,000 miles east of Moscow this week, while a sinkhole discovered 3.5 kilometers from the site suggested a route for water to find its way in.
“Investors are selling off Uralkali bonds as the credit quality of the company may significantly worsen,” Egor Fedorov, a senior credit analyst at ING Commercial Banking, said by phone from Moscow. “Should it lose even one of the mines, that means that its revenue will be 20 percent lower.”
Debt Load
It’s too early to say that the mine will be lost and Uralkali is keeping its 2014 sales target at 11.5 million tons, Interfax cited Deputy Chairman Dmitry Mazepin as saying yesterday. The company wasn’t operating at full capacity before stopping operations at the site. Uralkali’s press service declined to comment when contacted by phone yesterday.
Any permanent shutdown at the 400-meter-deep mine may force Uralkali to borrow or to pay less dividends as it accelerates other projects, potentially boosting its debt load, Fedorov said. Uralkali is rated BBB- at Standard & Poor’s and Fitch Ratings, and Baa3 at Moody’s Investors Service, their lowest investment-grade scores.
Net debt was $3.9 billion by the end of the first half, or 2.56 times earnings before interest, taxes, depreciation and amortization, according to a company presentation this month. Uralkali, which wants to cut that ratio to 2, needs to pay back $1.56 billion in the next two years, it said.
“A one-notch downgrade looks likely if Uralkali loses only one mine,” Sergey Goncharov, an analyst at Sberbank CIB in Moscow, said by e-mail yesterday.
Assessing Ratings
While Fitch said the mine flooding had no immediate affect on its rating of Uralkali, the more negative of two scenarios highlighted by the ratings company could lead to “negative rating action,” according to a statement yesterday.
Moody’s declined to comment, while S&P is awaiting the conclusions of the company’s investigation, Paris-based analyst Lucas Sevenin, said by e-mail yesterday. A possible closure “could have a material impact on profits and thus debt and leverage,” he said.
Uralkali lost a mine at Berezniki in Perm region eight years ago, and if that happens again, the producer won’t be able to recover the output through new mines until 2018, according to Elena Sakhnova, an analyst at VTB Capital. The sinkhole discovered this month is as wide as 40 meters.
‘Under Pressure’
The company is shielded from an output drop by the ruble’s 29 percent weakening this year, Sakhnova said by phone from Moscow yesterday. While most of its earnings are in foreign currencies, expenses are in rubles, giving a 40 percent boost to Ebitda from Sakhnova’s estimate at the start of year.
The 2018 bonds fell for a seventh day yesterday, a retreat that suggests a downgrade is already priced in, Dmitrij Tichonov, an analyst at Commerzbank AG said by e-mail yesterday. They yield was 14 basis points lower at 7.63 percent at 3:14 p.m. in Moscow.
Any cut in dividends could impede efforts by Uralkali’s owners to lower their debt, Fedorov from ING said. OAO Uralchem and billionaire Mikhail Prokhorov’s Onexim Group bought more than 47 percent of Uralkali in December, five months after the company broke a trading venture with Belarus that led to a drop in global potash prices.
Uralchem’s first-half profit slumped 94 percent due to debt expenses and the sharp increase in the exchange rate. Prokhorov, seeking to lower debt, recently explored whether fellow tycoons including Vladimir Potanin were willing to buy some of his stake, two people familiar with the matter said Oct. 27.
“Uralkali owners, who bought their stakes using loans, may be under pressure should the company curb the dividends they rely on to pay down their debts,” Fedorov said.
To contact the reporters on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net; Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net
To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net Alex Nicholson, Daliah Merzaban

19 U.S. shale regions will no longer be profitable at $75 oil

19 U.S. shale regions will no longer be profitable at $75 oil

Isaac Arnsdorf

Bloomberg News

Published Thursday, Nov. 20 2014, 4:47 PM EST

Last updated Thursday, Nov. 20 2014, 7:09 PM EST

With crude at $75 (U.S.) a barrel, the price Goldman Sachs Group Inc. says will be the average in the first three months of next year, 19 U.S. shale regions are no longer profitable, according to data compiled by Bloomberg New Energy Finance.

Those areas, which include parts of the Eaglebine and Eagle Ford in East and South Texas, pumped about 413,000 barrels a day, according to the latest data available from Drillinginfo Inc. and company presentations. That compares with the 1.03 million-barrel gain in daily national output over the past year, government figures show.

The expansion of U.S. oil supply to more than 9 million barrels a day is contributing to a global glut, driving down prices by as much as 32 per cent since June. The data compiled by BNEF, which take into account the costs of drilling, royalties and transportation, show that certain shale patches fail to make money at the current price. Companies such as SandRidge Energy Inc. and Goodrich Petroleum Corp. said they expect to pump more oil for less money so they can withstand the rout.

“Everybody is trying to put a very happy spin on their ability to weather $80 oil, but a lot of that is just smoke,” said Daniel Dicker, president of MercBloc Wealth Management Solutions with 25 years’ experience trading crude on the New York Mercantile Exchange. “The shale revolution doesn’t work at $80, period.”

Break Even

West Texas Intermediate crude, the U.S. benchmark, fell to a four-year low of $73.25 a barrel on Nov. 14, from $107.73 on June 20. Goldman Sachs cut its first-quarter forecast to $75 a barrel on Oct. 27 from a previous forecast of $90.

The 12-nation Organization of Petroleum Exporting Countries has increased output by more than 1 million barrels a day since the end of May. OPEC meets Nov. 27 to decide whether to cut output or preserve market share and pressure U.S. drillers.

Estimates of the price that drillers need to break even have varied. The Paris-based International Energy Agency said about 96 per cent of U.S. shale production remains profitable at $80 a barrel. Analysts at Sanford C. Bernstein LLC said one-third of the output added in the first three months of 2014 is uneconomic with WTI at $80.

About 80 per cent of potential growth from U.S. shale oil in 2015 would remain economic at $70 a barrel, IHS Inc. said in a report today. At an average annual price of $77 a barrel, output will rise by 700,000 barrels a day in 2015, compared with more than 1 million barrels a day this year, the Englewood, Colorado-based data provider said.

Reduce Spending

Profitability varies depending on the rocks’ depth and density, access to pipelines and the mix of oil and gas that wells pump. Drillers in the Tuscaloosa Marine Shale of Louisiana and Mississippi break even at $79.52 a barrel because they have to bore more than two miles deep, according to data compiled by BNEF. The cheapest field was the Green River basin in Colorado and Wyoming, at $50.10 a barrel.

At least a dozen companies including Continental Resources Inc. and SandRidge, both based in Oklahoma City, said on conference calls in the past month that they would reduce capital spending plans because of lower prices.

Apache Corp. said today it would cut spending in North America by 25 per cent. The Houston-based company said it will still increase production by 8 per cent to 12 per cent, compared with an annual average of 29 per cent since 2009.

Wells in the 19 regions that according to the data are unprofitable pumped a combined 273,745 barrels a day in June, 38 per cent more than a year earlier, according to Drillinginfo, an Austin, Texas-based information provider to government and industry.

Higher Returns Data weren’t available for Oklahoma because government record keeping there is limited, according to Drillinginfo. In the state’s seven regions that the data compiled by BNEF say are unprofitable, companies including Continental and SandRidge said they produce at least another 139,360 barrels a day. Together, the two estimates come to about 413,000 barrels a day, which is 40 per cent of the growth in daily U.S. production over the last year.

By contrast, the biggest-producing fields – North Dakota’s Bakken and the Permian and Eagle Ford in Texas – pump a combined 4.7 million barrels a day, according to the Energy Information Administration. Those regions remain economic at $55 to $65 a barrel, according to Manuj Nikhanj, head of energy research at New York-based Investment Technology Group Inc. What matters more than break-even levels is that lower prices reduce the cash flows companies can use to reinvest in new production, he said.

Mississippian Formation Continental, led by billionaire Harold Hamm, produces about 10,540 barrels a day in the South Central Oklahoma Oil Province, known as Scoop, according to Warren Henry, vice president of research and policy. The region’s break-evens range from $79.28 to $186.73 a barrel, according to data compiled by BNEF. Shares of Continental have fallen 16 per cent to $54.31 since Oct. 1, compared with a 5.4 per cent gain in the Standard & Poor’s 500 Index of U.S. equities.

Continental’s returns in the Scoop are higher than in the Bakken and the company is still exploring the region, Henry said. The initial production rates Continental reported are higher than those assumed in the data compiled by BNEF.

“I’d probably be more inclined to drop rigs in the Bakken because I’m getting really good results and I’ve got two to three years of drilling to do in the Scoop” to keep Continental’s leases, Henry said.

Kansas-Oklahoma SandRidge pumps about 23,400 barrels a day of oil and gas from the Mississippian formation on the Kansas-Oklahoma border, the company said Nov. 5. The area is the company’s focus, with more than 1.85 million acres leased, according to its website. Drillers in the area need between $78.56 and $163.51 a barrel to break even, according to data compiled by BNEF.

By reining in drilling costs, SandRidge makes a 40 per cent return on a $2.9-million well at $80 a barrel, said Jeff Wilson, a company spokesman. That’s about 14 per cent cheaper than the BNEF data’s estimated well cost and doesn’t include other expenses such as leases and transportation. Including infrastructure, the return is 30 per cent, Wilson said. SandRidge also hedged the majority of its 2015 production above $90 a barrel, he said. Shares of SandRidge fell 7.6 per cent to $3.83 since Oct. 1.

Goodrich, based in Houston, spends about 80 per cent of its capital budget on the Tuscaloosa Marine Shale, its largest acreage position, according to a November presentation. Daniel Jenkins, a company spokesman, declined to comment. Shares dropped 25 per cent since Oct. 1 to $9.98.

Some break-even analyses have been wrong because they use improper assumptions, Robert C. Turnham Jr., Goodrich’s president, said on a Nov. 4 conference call. A well that costs $13-million and eventually yields the equivalent of 600,000 barrels of oil returns 13 per cent at $70 a barrel, the company said in a Nov. 11 slideshow.

“The first question on every earnings call is, ‘What can you do going into the next year if we really are in a $75 oil price environment?’” said Chad Mabry, an analyst at MLV & Co., an investment bank in Houston. “We’re already starting to see some cracks.”

Some smaller oil-patch players set to thrive despite sliding prices

Some smaller oil-patch players set to thrive despite sliding prices

CALGARY — The Globe and Mail

Published Friday, Nov. 21 2014, 3:00 AM EST

Last updated Friday, Nov. 21 2014, 3:00 AM EST

Sliding oil prices have sent investors scurrying to sell energy stocks fearing a big drop in returns, but there are some Calgary-based producers poised to thrive in the weaker environment.

Energy companies with a combination of healthy balance sheets, prowess in the futures market and reputations for making acquisitions pay off will head into 2015 with the wherewithal to pick up some assets at attractive prices. Whitecap Resources Inc., Spartan Energy Corp. and Pine Cliff Energy Ltd. are in such positions in the small- to medium-size oil and gas group, said analyst Cody Kwong at FirstEnergy Capital Corp.

“They’re not going to include that in their 2015 budgets, but the guys with the cost-of-capital advantage would certainly like to strike in the market lows,” Mr. Kwong said.

Of course, buying low, when it can be done, allows a quicker payout, especially if the market rebounds in the months following a deal, he said.

The three companies have been active acquirers, even when conditions have been weak. In addition, they are among a group of companies that have little trouble raising money in capital markets for deals in good times and bad.

However, acquisition targets with high debt levels become much less attractive when commodity prices weaken, as buyers, especially those that pay dividends, will be careful not to weaken their own balance sheets..

The slide in oil prices has slowed the number of acquisitions and financings in the oil patch after a gusher for much of the year, but it has not stopped the activity.

Last week, Painted Pony Petroleum Ltd. raised $55-million in an equity financing, led by Cormark Securities Inc. That’s in the face of a 29 per cent drop in West Texas Intermediate oil and 22 per cent fall in the S&P/TSX Energy Index since June.

It’s making some companies a bit wary of hammering down 2015 capital spending budgets too tightly, said Mr. Kwong, whose firm played host to an investor conference in Toronto this week, concentrating on mid-size and small producers. Many of the presenters said they plan to gauge oil and gas prices markets around the end of the winter drilling season to determine whether to adjust spending levels, he said.

For its part, Whitecap has set a 2015 development budget of $360-million, up 16 per cent from the estimated outlay for this year.

Potash mentions in BHP’s Annual Report – November 2014 #potash

Potash mentions from BHP Billiton’s Annual Report 2014
Page 11 of 348
In August 2014, we announced a proposal to create an independent global metals and mining company based on a selection of BHP Billiton’s high-quality aluminium, coal, manganese, nickel
and silver assets. Separating these assets via a demerger has the potential to unlock shareholder value by significantly simplifying
the BHP Billiton Group and creating two portfolios of complementary assets. Once simplified, BHP Billiton would be almost exclusively focused on our large, long-life iron ore, copper, coal, petroleum
and potash basins. With fewer assets and a greater upstream
focus, BHP Billiton would be able to reduce costs and improve the productivity of our largest businesses more quickly. The proposed demerger remains subject to the receipt of satisfactory third party approvals, final Board approval and shareholder vote.
____________________________________
Page 15 of 348
We believe that our uniquely diversified portfolio is robust, both
across these scenarios, and also shorter-term shock events.
As an example, in a severely carbon constrained world, we believe
there is significant upside for our potash and uranium commodities,
and also for our high-quality hard coking coal (lower smelting
emissions) and iron ore lump product (direct blast furnace feed),
while copper is resilient. In aggregate these mitigate potential
negative impacts in other commodities, given the relatively short
pay-back periods for most present and future investments in fossil
fuel production. Conversely, our portfolio allows us to capture
upsides in an environment where developing countries experience
strong global growth.
_________________________________
Page 20 of 348
BHP Billiton’s continued diversification
If the demerger is approved, we would focus almost exclusively
on our large, long-life iron ore, copper, coal, petroleum and potash
basins. By concentrating on the development and operation
of these basins, BHP Billiton expects to reduce costs and improve
productivity more quickly.
Following the demerger, BHP Billiton would have a simpler portfolio
with fewer assets and a greater focus on upstream operations.
BHP Billiton would remain:
• the largest exporter of metallurgical coal;
• a global top three producer of iron ore;
• a global top four exporter of copper concentrate;
• the largest overseas investor in onshore US shale;
• the developer of the world’s best undeveloped potash resource
in Saskatchewan, Canada.
Consistent with our established strategy, our Core Portfolio (1)
provides broad exposure to steelmaking raw materials, copper,
energy and potentially agricultural markets and will remain
diversified by commodity, geography and market.
___________________________________
Page 38 of 348
Description of the Potash Business
Jansen Potash Project
Our Potash strategy is to build a material industry position over
the long term.
We hold exploration permits and mining leases, issued by the
Government of Saskatchewan, covering more than 14,000 square
kilometres of mineral rights in the province of Saskatchewan in
Canada. We have progressively explored our permit areas over
the past seven years and continue to evaluate their economic
development potential. We are converting our exploration permits
to long-term leases as these permits mature in order to enable
further evaluation. To date, we have secured 4,400 square kilometres
under long-term mining leases.
We believe our Jansen Potash Project, a greenfield potash project
in south-central Saskatchewan, is the world’s best undeveloped
potash resource and is likely to be a low-cost source of supply
once fully developed. Investment in Jansen could underpin
a potential fifth pillar of BHP Billiton, given the opportunity
to develop a multi-decade, multi-mine basin in Saskatchewan.
On 20 August 2013, we announced an additional US$2.6 billion
investment for Jansen, bringing total approved spending to
US$3.8 billion. This investment is funding the excavation and
lining of the Project’s production and service shafts, and the
installation of surface infrastructure and utilities. The level
of expenditure on the Jansen Potash Project in FY2014
was US$596 million.
With our investment premised on the attractive longer-term market
fundamentals for potash, we will continue to modulate the pace
of development as we seek to time our entrance to meet market
demand. The introduction of one or more minority partners,
consistent with our approach for certain of our other resource
operations, will be considered at the appropriate time.
On the basis of our current projections and assuming Board
approval, the Jansen mine is likely to ramp-up to its nameplate
capacity of approximately 10 Mtpa of agricultural grade potassium
chloride in the decade beyond 2020.
____________________________________
Page 39 of 348
Potash recorded an Underlying EBIT loss of US$583 million.
This included: a US$68 million impairment associated with
our decision to allow the exclusivity agreement for Terminal 5
at the Port of Vancouver (US) to lapse; and a US$300 million
charge related to the revision of mine site rehabilitation provisions for the Group’s North American closed mines, which are managed
by our Potash Business. In addition, exploration expense for Potash was US$47 million, a US$42 million reduction from FY2013.
The Jansen Potash Project was 30 per cent complete at the
end of the period with significant progress made on surface infrastructure and shaft excavation continuing.
___________________________________________
From page of 80 of 348
2.1.1 Petroleum and Potash Business continued
Potash
Our Potash strategy is to build a material industry position over
the long term.
We hold exploration permits and mining leases, issued by the
Government of Saskatchewan, covering more than 14,000 square
kilometres of mineral rights in the province of Saskatchewan
in Canada. We have progressively explored our permit areas over
the past seven years and continue to evaluate their economic
development potential. We are converting our exploration permits
to long-term lease as these permits mature in order to enable
further evaluation. To date, we have secured 4,400 square
kilometres under long-term mining leases.
We continue to progress our Jansen Potash Project, a greenfield
potash project, located approximately 140 kilometres east of
Saskatoon in south-central Saskatchewan. We believe Jansen
is the world’s best undeveloped potash resource and is likely to
be a low-cost source of supply once fully developed. Investment
in Jansen could underpin a potential fifth pillar of BHP Billiton,
given the opportunity to develop a multi-decade, multi-mine
basin in Saskatchewan.
On 20 August 2013, we announced an additional US$2.6 billion
investment for Jansen, bringing total approved spending to
US$3.8 billion. This investment is funding the excavation and lining
of the Project’s production and service shafts, and the installation
of essential surface infrastructure and utilities.
The level of expenditure on the Jansen Potash Project in FY2014
was US$596 million, which was lower than the annual instalment
of US$800 million previously announced for FY2014. We suspended
excavation of the production and service shafts in the December
2013 quarter to enable a thorough review of activities completed
and to ensure all learnings were captured and adopted in future
works. Shaft excavation resumed in the March 2014 quarter and
progressed in a staggered manner to mitigate risk and optimise
their development. As at 30 June 2014, the pre-development phase
was 30 per cent complete.
During FY2014, we allowed our exclusivity for Terminal 5 at the
Port of Vancouver to lapse. We are currently assessing a range
of options to meet our port requirements.
With our investment premised on the attractive longer-term market
fundamentals for potash, we will continue to modulate the pace
of development as we seek to time our entrance to meet market
demand. The introduction of one or more minority partners,
consistent with our approach for certain of our other resource
operations, will be considered at the appropriate time.
On the basis of our current projections and assuming Board approval,
the Jansen Potash Project is likely to ramp-up to its nameplate
capacity of approximately 10 Mtpa of agricultural grade potassium
chloride (KCl) in the decade beyond 2020. The Measured Resource
estimate for Jansen is 5.3 billion tonnes at 25.6 per cent potassium
oxide (K2O) (25.6 per cent K2O is equivalent to 40.5 per cent KCl
using the mineralogical conversion factor of 1.583) with an
anticipated life of more than 50 years. The Government of
Saskatchewan has issued a Potash Lease Special Agreement (KLSA)
for our Jansen Project, which provides long-term security of tenure
to allow the ongoing development and subsequent operation of
Jansen for the life of the operation.
We are continuing to evaluate other areas for which we have
exploration permits in the Saskatchewan potash basin, including
Young, Boulder and Melville, through analysis of the extensive
data collected from successive exploration programs.
In 2013, the management of the closed mine sites associated
with Base Metals North America was transitioned from the
Copper to the Potash Business. All locations are in care and
maintenance or in various stages of closure.
___________________________________________
Page 134 of 348
BHP Jansen mineral resources - Nov 2014 ar

27% more jobs posted on SaskJobs than EI recipients in Saskatchewan in September 2014

November 20th, 2014
Statistics Canada
The number of EI recipients in Saskatchewan in September 2014 was up 6.6% from September 2013 (see chart below).
There were 10,800 EI recipients in Saskatchewan in September 2014, at the same time, there were 13,762 jobs posted on SaskJobs .ca alone. So, there were 27% more jobs on one website than EI recipients in Saskatchewan.
Today there are 11,721 jobs posted at SaskJobs.ca
SK ei recipients Nov 2014 top SK ei recipients Nov 2014

China’s nuclear generating capacity is set to triple over the next six years #uranium

China plans for nuclear growth

20 November 2014

http://www.world-nuclear-news.org/NP-China-plans-for-nuclear-growth-2011144.html

China’s nuclear generating capacity is set to triple over the next six years, according to an energy development plan published by the State Council.

The State Council published the Energy Development Strategy Action Plan, 2014-2020 on 19 November. The plan aims to cut China’s reliance on coal and promote the use of clean energy.

China currently has 19.1 GWe of installed nuclear generating capacity. According to the plan, this will reach 58 GWe of capacity by 2020, giving China the third largest nuclear generating capacity after the USA and France. In addition, by 2020, China should also have a further 30 GWe or more of new nuclear generating capacity under construction.

The plan calls for the “timely launch” of new nuclear power projects on China’s eastern coast and for feasibility studies for the construction of inland plants. It says that efforts should be focused on promoting the use of large pressurized water reactors (including the AP1000 and CAP1400 designs), high temperature gas-cooled reactors (HTRs) and fast reactors.

The plan also says that research should be conducted into fuel reprocessing technology. In addition, it calls for the active promotion of basic research into nuclear power and the research and development of nuclear safety technology. It also says that research should be conducted to “improve the nuclear fuel cycle system.”

Fast reactors – make maximum use of uranium resources by generating a certain amount more fuel than they consume – are seen as the main technology for China’s long-term use of nuclear energy. Under previously announced plans, deployment of PWRs is expected to level off at 200 GWe by around 2040, with the use of fast reactors progressively increasing from 2020 to at least 200 GWe by 2050 and 1400 GWe by 2100.

Cleaner energy

The plan sets a cap on annual energy consumption at 4.8 billion tonnes of the standard coal equivalent by 2020. This would limit the annual growth rate of primary energy consumption to less than 3.5% per year over the next six years.

Annual coal consumption will be held below 4.2 billion tonnes until 2020, the plan says. Its share of the energy mix will be reduced from the current 67% to 62% by 2020. The plan places responsibility on areas around Beijing, the Yangtze River Delta and the Pearl River Delta to cut their coal consumption in order to reduce air pollution. The share of natural gas, meanwhile, will be raised to over 10%.

Meanwhile, the share of non-fossil fuels in the total primary energy mix will increase from 9.8% in 2013 to 15%, according to the plan. Installed capacity of hydro, wind and solar power is expected to reach 350 GWe, 200 GWe and 100 GWe, respectively, by 2020.

Last week, China announced plans to achieve the peaking of CO2 emissions around 2030 and “to make best efforts to peak early.” It also intends to increase the share of non-fossil fuels in primary energy consumption to some 20% by 2030.

Researched and written by World Nuclear News

INDIAN COMPANIES TO BUY MORE SASKATCHEWAN POTASH #potash

INDIAN COMPANIES TO BUY MORE SASKATCHEWAN POTASH

Released on November 20, 2014

Premier Brad Wall on Hand as New Long-Term Sales Agreements Are Signed
Today Premier Brad Wall witnessed the signing of two new marketing agreements that will see millions of tonnes of Saskatchewan potash shipped to India over the next few years.
Canpotex, the off-shore marketing arm of Saskatchewan potash producers, signed separate sales agreements with Coromandel International Ltd. (CIL) and Tata Chemicals Limited (TCL).  The two companies, along with Indian Potash Limited (IPL), were also recognized by Canpotex for their long-time patronage.
In addition, Canpotex signed an Enhanced Market Development Agreement with each of the three companies to promote the use of potash in India.
Canpotex supplies about 25 per cent of the potash used in India, which is the company’s fourth largest offshore market.
Wall is in India on a week-long trade mission.
“With a growing economy and large population, India is an important market for our potash producers and we’re thankful for these purchase agreements,” Wall said.  “We have a strong commercial relationship that should only get stronger as Indian farmers begin to see the value of potash in a balanced fertilizer application.  Potash has helped Saskatchewan farmers become among the most productive farmers in the world and it can do the same for Indian farmers.”
“Canpotex is honoured to have served CIL, IPL and TCL for many years and grateful our relationship will continue into the future,” Canpotex President and CEO Steve Dechka said.  “We look forward to working with our partners to help Indian farmers improve their productivity and feed this dynamic, growing country.”
Wall, Dechka and Dr. Sanjeev Balyan, Minister of State for Agriculture and Food Processing Industries, were among those invited by IPL to the opening of a soil testing laboratory at Muzaffarnagar, located about 130 kilometres east of New Delhi.  The laboratory will provide free services to local farmers.
The delegation toured a sugarcane demonstration plot that serves as a showcase of scientific farming methods, including the use of potash as a fertilizer.

The Premier also delivered a keynote address to more than 600 farmers, in which he touted the benefits of potash.

At separate ceremonies attended by Wall, CIL and IPL were presented with awards for purchasing three million tonnes of Saskatchewan potash, while TCL was recognized for buying four million tonnes.
Also on Thursday, Canpotex hosted a dinner attended by the Saskatchewan delegation, Government of India representatives and industry officials.
“I’m grateful Canpotex provided an opportunity for our government to say thank you to our customers and discuss how we might work together to boost agricultural productivity in India,” Wall said.
The trade mission, which runs November 15-23, is intended to promote Saskatchewan’s strengths in energy, agriculture and innovation as well as to highlight investment opportunities.
On Friday, Wall was scheduled to meet with the Chief Minister of the State of Punjab and the Chief Minister of the State of Haryana in Chandigar.  On Saturday, the Premier will speak at the opening ceremonies of Agro Tech 2014 in Chandigar, and the opening of the Canadian Pavilion at the agricultural trade show.
Wall has also had meetings with government officials and potential investors in Mumbai, Ahmedabad, the largest city in the state of Gujarat, and New Delhi.  He delivered keynote speeches at a dinner in Mumbai and a luncheon in Ahmedabad.
Saskatchewan is the largest exporter to India among the provinces, shipping about $1.0 billion worth of goods in 2013.  The province’s exports to India have increased 67 per cent since 2007.  Saskatchewan imports from India have climbed by 244 per cent in the same period.
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For more information, contact:
Kathy Young Executive Council Regina Phone: 306-787-0425 Email: kathy.young@gov.sk.ca Cell: 306-526-8927

TransCanada sees need for rail shipping #kxl

20 Nov 2014
Calgary Herald
LAUREN KRUGEL
THE CANADIAN PRESS
TransCanada sees need for rail shipping
Chances are good TransCanada will get into the rail business regardless of whether its long- delayed Keystone XL pipeline is built, CEO Russ Girling said Wednesday.
But how big a rail player TransCanada becomes will depend on the fate of its proposed pipeline expansion and others, he said.
For several months, Calgary- based TransCanada has floated the idea of a “rail bridge” while its $ 8- billion US cross- border pipeline remains in regulatory limbo.
The company is in “active negotiations” with shippers about moving their crude by train, but there’s no timeline for when the plan will be a go, Girling told reporters following TransCanada’s annual investor conference in Toronto.
“I would say there’s a better than 50- 50 chance that we will be in that business in some form or fashion in the future and it will take us some time here to actually nail down the agreements to underpin those investments,” he said.
Though TransCanada touts pipelines as the safest and most efficient mode of transport, it sees a longterm role for rail for the energy industry.
“I think the marketplace has learned that it is flexible, it can be put in place relatively quickly, it doesn’t have the same regulatory hurdles as building pipe does,” Girling said.
“I think it plays a larger role in the future than it has in the past, and therefore it’s likely a business that we’re in long term, irrespective of Keystone.”
Girling’s remarks came a day after efforts to speed along Keystone XL’s approval were narrowly defeated in the U. S. Senate.
The U. S. regulatory process for Keystone XL has been dragging on for more than six years, amid court challenges, political wrangling and sustained opposition by environmental and landowner groups.
Supplies of Canadian crude are still crucial to U. S. energy security and will provide a boost to the North American economy, as shown by the loyalty of its customers, Girling said Wednesday.
“The marketplace need for Keystone has probably grown,” he said, pointing to more than four million barrels a day of crude that’s still being imported into the Gulf Coast. “Our 20- year shipper contracts remain in place. Not one of those shippers has given up their capacity.”
As TransCanada awaits a U. S. decision on the project, it’s keeping a giant pile of 36- inch diameter pipe stacked in a rail yard in Little Rock, Ark., and storing pumps and other equipment in warehouses along the route. TransCanada this month raised it cost estimate for Keystone XL to $ 8 billion from $ 5.4 billion.
The existing Keystone network has been shipping 591,000 barrels per day crude to the Midwest since 2010 and in January of this year began deliveries to the U. S. Gulf Coast.
Keystone XL would add a new segment of pipe cutting across Montana, South Dakota and Nebraska with a capacity of 830,000 barrels per day.
Though most of Keystone XL’s volumes would come from the oilsands, TransCanada is planning an “on ramp” in Montana that would carry up to 100,000 barrels per day of crude from the Bakken formation.
Meanwhile, TransCanada is plotting new pipelines that would tap into burgeoning U. S. shale oil deposits, said Paul Miller, the executive in charge of oil pipelines.
North American crude production is expected to grow 40 per cent to 14 million barrels per day by 2020 — between the oilsands, the U. S. Bakken formation centred in North Dakota and shale in Texas and Colorado.
“In the United States, there’s numerous shale plays that do require transportation solutions,” said Miller, adding TransCanada is eyeing expansions in Alberta’s oilsands region, too.
“Some of those have the opportunity to connect to our existing Keystone system and some of those would be independent of our existing Keystone system.”
Earlier Wednesday, TransCanada said it’s aiming to accelerate the growth of its dividend over the coming few years.
Girling told the investor conference the dividend is expected to grow by an average of at least eight per cent a year through 2017.
The company’s dividend has been growing at an annual rate of around 4.5 per cent in recent years.
Girling said the dividend growth could reach 10 per cent, depending on whether major projects — Keystone XL and major natural gas pipelines to West Coast LNG projects, for example — go ahead.
Earlier this week, an activist investor urged TransCanada to make changes to boost its share price.
Sandell Asset Management Corp. wants TransCanada to transfer more assets to its master limited partnership, TC Pipelines LP, and to spin off its power business. TransCanada has called Sandell’s analysis “fl awed” and said it’s sticking to its current strategy.
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