Incitec Pivot Ltd T.IPL

RE:RE:BMO's take

[roberto146]

"My biggest concern would be the price of propane if that's the feed."
IPL manufactures the propane itself from NG feedstock and currently sells/exports it; they would not normally be buyers in the open market. With the Hearland project, instead of exporting a lot of it they will use it to manufacture PolyPro for sale in Canada instead of Canada importing it from the States.
There is so much NG, just in North America something like 500 billion cubic feet a year is flared off so just finding a use for it instead of wasting it is the big challenge. IPL will be using some of this surplus in their PolyPro manufacturing so are really just using input that would to a large degree be wasted. Propane is a downstream product of NG and normally is much more expensive when measured in BTU content. If there is a sudden usually temporary surge in NG prices, this will also subsequently affect propane prices because NG is the input for propane processing.
NG shortages in the East are due to limited pipeline capacity for well-known reasons as well as delivery constraints due to cold weather which normally occur. Big users up north have always susceptible to periodic delivery interruptions during especially cold weather, and are given notice to switch to oil to prioritize delivery to residential and power generation users.
For consumers, switching from NG to propane due to temporary price fluctuations is not an economic or practical viable option - you need different equipment to use it, and anyway propane is much more expensive. You're either on one or the other unless you decide to change, and changing equipment can be expensive. The only reason homeowners would usually use propane is because there is no NG service available and it's better than heating oil.