Chinook Energy Inc. Common CNKEF

Going South

[PeterM1]

Looks like one one of our regular pessimists  - dare I say troll - may be back?. Hi there Auburn ! As you probably know the price of  Westcoast Station 2 gas sometimes reflects the lack of capacity there. When this happens Station 2 prices can simply plummet reflecting a lack of buyers because they are unable to ship. Producers with pre booked capacity should be receiving something closer to the current AECO price. CKE seems pretty well organized in this respect and particularly when it comes to hedging.

 

Capacity seems to be an ongoing  problem with Westcoast Station 2.  That is why the cancelation of the Petronas Pacific Northwest LNG Project in BC might be good news for CKE. It dramatically  improves the feasibility of the Jordan Cove LNG Project  in Oregon. Mick Dilger CEO of Pembina - new owners  of Veresen,  already made it known before the Petronas announcement . “We’re excited about Jordan Cove. We think it can happen.” 

 

The Jordan Cove project will of course be fed off the Alliance pipeline which leads back to the CKE storage and meter station at Aitkens Creek. This of course, plus CKE owners ship of a currently unused 55 K pipeline, which hooks into it and threads through the heart of Montney. Seven Generations, highly regarded as one of the smartest Montney operators, is looking South for future sales. It has already signed a supply deal with U.S. LNG producer Cheniere Energy Inc. that will see growing volumes of its production exported to Louisiana. CKE already ships some 20% of its productions South  - So with capacity problems at Westcoast Station 2 this may be the way to go. - and CKE is well set up to make that happen.