RE:RE:RE:Righand - Explain it to me like im 5 - 2RuudinFrance wrote: Righand,
(yeah, you got un-ignored, but I'm afraid it's going to be a sad, short vacation).
I quote you: "Their gas is sold through the midstreamers, and while natural gas prices in Canada are affected by the US market, it is also generally priced in Canadian dollars".
Sure, the gas is processed by the midstreamers and therefore goes "through" their facilities, but
please explain why BBI has different contracts with different partners for "Gas Handling" and "Sales" and why the next (major) GHA is depending on BBI's capability to sell the gas to yet another party.
There are many ways a natural gas producer can market their gas, and the details of the agreements can get quite complicated. Some simply pay the midstreamers a processing fee, and the producer keeps the value of all of the resulting prodcuts, gas and liquids. Others sell the gas to the midstream processor, and the processor makes money on the liquids.
And the pipelines also come into play. In the case of Alliance, as it is jointly owned by Veresen, which also owns the Aux Sable natural gas processing facility near Chicago, they can offer that Alliance ATP pricing structure we hear about all the time. The fact that the Alliance pipeline and the Aux Sable facility are tied together allows Versesen and their partners to offer producers a premium price for their liquids-rich gas, as they control all aspects of the distribution of the resulting products into the premium midwest US market.
Any other questions?