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Weekly OFS Newsletter

News Items Ending June 4, 2018


 

Mergers & Aquisitions

  • The federal government announced the $4.5 billion acquisition of the Trans Mountain Pipeline (TMPL) and all of Kinder Morgan Canada Ltd’s (TSX:KML) core assets. In return, Kinder Morgan will proceed with its original plan to twin the pipeline this summer while the sale is finalized. Upon completion of the sale, Canada will continue the construction process on its own, with a view to eventually sell the pipeline when market conditions improve in the future. The transaction will include a new crown corporation to manage the project. Click here for an article addressing TMPL’s climate issues, written by Jackie Forrest.
  • Malaysian state-owned Petronas is acquiring a 25% stake in LNG Canada, an export project led by Royal Dutch Shell located in Kitimat, BC. The acquisition follows Petronas’ decision to cancel its own $36 billion LNG export terminal in BC last year due to price concerns. The $40 billion LNG Canada project will consist of two LNG production trains, expected to export a combined 13 million tonnes per year of LNG.

 

Financing

  • Calfrac Well Services Ltd. (TSX:CFW) closed its USD $650 million private offering of 8.5% senior notes due in 2026.

 

Other

  • Canadian Pacific Railway Ltd. (TSX:CP) reached a tentative pact with a crucial union to end an employee strike that started on May 29. The agreement covers 3,000 conductors and locomotive engineers, with operations resuming on May 31. The agreement defused the risk of worsening freight congestion, especially involving crude oil, grain and canola products.
  • Keyera Corp. (TSX:KEY) announced that it is proceeding with Phase 2 of its Wapiti gas plant, currently under construction south of Grande Prairie, AB. The $150 million second phase is expected to add 150 mmcf/d of sour gas processing to the plant and is expected to be completed in mid-2020. Keyera is also expanding two gathering systems that will deliver volumes to the facility.
  • TRADE WAR: The Trump Administration in the US removed steel and aluminum tariff exemptions on Canada, Mexico and the European Union. A 25% tariff on steel and a 10% tariff on aluminum came into effect on June 1, 2018. The federal government responded by imposing dollar-for-dollar tariff countermeasures on $16.6 billion worth of US imports.
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