January 2010

[Ally]

CNRL joins upgrader project

A proposed Redwater-area upgrader got a shot in the arm Thursday by attracting a heavy-hitting partner to supply some of the needed bitumen feedstock, and financial and technical support.

North West Upgrading, which has already spent about $300 million -- including $100 million for major equipment sitting in storage -- will be joined by Canadian Natural Resources Ltd. on the $4-billion project that could be operating by 2013.

North West will remain as the project operator, and the 50/50 joint venture is anticipated to close later this year.

North West was one of several bidders for Alberta`s bitumen royalty in kind (BRIK) program, which initially will sell 75,000 barrels per day to firms that agree to "add value" or upgrade the raw product. Submissions closed late Wednesday.

North West is applying for 37,500 bpd for its first phase, with an additional 12,500 bpd coming from CNRL. When diluent is added to that raw bitumen, the feedstock will equal 77,000 bpd, and because of its efficiencies, the output will also be 77,000 bpd.

Imperial is also bidding under BRIK, as are several other firms that have not been identified.

Read the full article here.

 

[Ally]

Calgary home ownership becoming more affordable

Calgary housing became slightly more affordable in 2009, but it`s still just the 23rd most affordable place to own a home from a list of 28 Canadian cities, according to the Winnipeg-based Frontier Centre for Public Policy.

In a study released Monday, the centre found Thunder Bay and Windsor, both in Ontario, were tied for most affordable Canadian cities and Vancouver was the least affordable.

In fact, Vancouver was also the least affordable among the 272 cities in the international study, which covered Canada, Australia, Ireland, New Zealand, the United Kingdom and the United States.

As Canada`s resale housing market boomed and prices rose in 2009, affordability fell, sending the national average to a reading of 3.7 from 3.5 the year before. (A higher score indicates less affordability).

That would place Canada`s overall housing market in the "moderately unaffordable" category -- from 3.1 to 4.0. The numbers are calculated by dividing the median residential house sale price for the third quarter by median annual gross household income.

In Vancouver, for example, a median home price of $540,900 was divided by median household income of $58,200 to create a multiple of 9.3, which the group describes as "severely unaffordable" -- any reading of 5.1 and over.

Read the full article here.

 

[Ally]

`06-`07 Oil consumption levels will never return, IEA predicts

Oil use in rich industrialised countries will never return to 2006 and 2007 levels because of more fuel efficiency and the use of alternatives, the chief economist of the International Energy Agency said on Thursday.

The bold prediction, while made previously by some analysts, is significant because the IEA advises 28 countries on energy policy and its oil demand forecasts are closely watched by traders and policymakers.

"When we look at the OECD countries -- the U.S., Europe and Japan -- I think the level of demand that we have seen in 2006 and 2007, we will never see again," Fatih Birol told Reuters in a telephone interview.

"There may be some zig zags up and down but as a trend I think it will be a downward trend in terms of oil consumption."

The trend reflects a change taking place in the world oil market in which the centre of oil use is switching to economies such as China and away from developed markets like Europe and the United States.

In its Jan. 15 monthly Oil Market Report forecast oil demand in the Organisation for Economic Cooperation and Development this year will average 45.48 million barrels per day, unchanged from 2009.

Read the full article here.

 

[Ally]

Alberta`s economy to be boosted by energy, weighed down by consumers

Alberta`s economy will get a boost this year from a rebound in the energy sector, but cautious consumers will hold back economic growth, CIBC World Markets said Thursday.

In its latest forecast, the bank said the province will post growth of 2.4 per cent in 2010, after shrinking 2.6 per cent last year.

"A still-tenative consumer suggests Alberta will be slower to reaccelerate in 2010," said Warren Lovely, CIBC`s senior economist, in a release.

Another forecast by the Conference Board of Canada earlier this week pegged Alberta`s economy to grow three per cent this year. The provincial government, which slated to release its budget in two weeks, expects growth around two per cent.

The CIBC report said a global economic recovery is bolstering demand for commodities. But the province is also getting a lift from rebounding housing markets and renewed investment in oilsands sector, where the recent slowdown had helped temper soaring costs.

Read the full article here.