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CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D



TSX:CUS.DB.D - Post by User

Comment by Nawaralsaadion Apr 03, 2014 11:28am
310 Views
Post# 22405849

RE:today's price move

RE:today's price moveThis pipeline is still a long way from getting approved, the hearings are scheduled for January 2015, and the NEB conclusion is due by July 2015:

https://www.cbc.ca/news/canada/calgary/kinder-morgan-hearings-scheduled-for-trans-mountain-pipeline-expansion-1.2596172

Then if approved by the NEB, the cabinet needs another 6 months before approving it, after that you have legal challenges if approved, which should take at least another year, and only then you can start construction which will take at least a couple of years.

It is unlikely that we will see any pipeline to the west or east cost before 2019 or 2020. The fastest pipeline to come to service would be Keystone XL to the US Gulf, and this still 2017 if approved later this year.

Canexus should have no issues contracting its capacity for 3 to 5 years take or pay contracts (lasting until 2017-2019), after that it will depend on the rate of production growth at the oil sands, the activation of new pipelines and the economics of transporting dry bitumen vs. diluted bitumen. However, even if the pipelines are built in 2019/2020, CUS terminal can handle condensate (required for dilution at the oil sands), it can develop its storage business, it will still handle spot cargos and strategically some operators may sign contracts to maintain transport optionality.

Regards,
Nawar
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