PetroChina to Import Canadian Crude in 2009

[chlamor]

PetroChina to import Canadian crude in 2009

    BEIJING, April 18 -- PetroChina Company Limited (PetroChina) recently executed a memorandum of understanding in Beijing with Enbridge, the second largest pipeline operator in Canada. Both sides will work together on a project of building new pipeline and transporting crude oil from Canada to inland China.

    This project will cost 2.02 billion US dollars. It is predicted that PetroChina can import 200,000 barrels of crude per day from Canada as early as 2009.

    Enbridge plans to build Gateway, an oil pipeline with a 30-inch diameter and 1,160 kilometers long. It will transport crude oil produced from Alberta's Calgary Oil Sand to docks on the west coast, and then the crude will be carried by oil tankers to China, the Asia-Pacific area and California.

    This will be the first time Asia imports crude oil from Canada. The pipeline is expected to transfer 400,000 barrels of crude oil daily, half of which provided by PetroChina.
http://news.xinhuanet.com/english/2005-04/18/content_2844859.htm

[Deja Q]

1. By then, it won't matter. NAFTA of 1995 will allow the US to take it.

NAFTA allows the US to take Canadian oil freely in the time of an energy crisis - which will be in ~2 years.

[SidDithers]

2. NAFTA also allows us to sell softwood lumber into the US...

but we all know how well that has worked out.

Sid

[Deja Q]

4. And allow us FREE trade with Canada. Like getting their low-cost drugs.

You know, doing unto the corporation like the corporation was doing to us?

Whoops, I'm wrong. They're trying to stop that, *co. Not so free after all.

[CHIMO]

3. Interesting

Doesn't mention any new investment into production. Also doesn't mention any investment in the pipeline by the purchaser. If there is no investment then the risks are all by others, none by the purchaser.

[MrPrax]

5. Hmm...I noticed that too

Lemme see...the Alberta govt has a surplus burning a whole in its gonchees...

Probably another 'BC coal to Japan' scam...

[achtung_circus]

7. Strictly a memorandum of understanding.

For details on finances (or lack of clarity thereon) thry the Globe here:
<http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050415/RENBRIDGE15/TPBusiness/?query=petrochina>

[achtung_circus]

6. The Calgary Oil Sand?

That will come as a shock to the residents of Okotoks and Airdre- wondering, no doubt, where the oil sand is hidden. Probably also a shock to the residents od Ft. MacMurray, the bulk of whom work at what they thought was the oil sands.

[CHIMO]

8. Would Be Interesting

To see who will be making the investment.

From the Enbridge release

Enbridge and PetroChina Sign Gateway Pipeline Cooperation Agreement


APRIL 14, 2005 - 12:00:13 ET
CALGARY, ALBERTA--(CCNMatthews - April 14, 2005) - Enbridge Inc. (TSX:
ENB) (NYSE:ENB) today announced that it has entered into a memorandum of understanding with PetroChina International Company Limited to cooperate on the development of the Gateway Pipeline and supply of crude oil from Canada to China. The Gateway Pipeline is a proposed project to transport 400,000 barrels per day of Alberta oil sands production from Edmonton, Alberta to a port on the west coast of British Columbia where it would be shipped by tanker to China, other Asia-Pacific markets, and
California.

"Definitive long-term agreements for the sale of crude oil to the
Chinese will need to be negotiated, as will longer term capacity
commitments with other shippers. We will continue our consultation with the many aboriginal communities and other stakeholders, and we will need to complete our plans to minimize environmental impacts. Only when all of these matters are concluded in a manner which supports the commercial feasibility of the project will we be in a position to file a regulatory application."

A regulatory application for the $2.5 billion, 1,160-kilometre (720-mile) crude oil pipeline would have to be made in 2006 to achieve a
late 2009/2010 in-service date, which is when Enbridge's Western Canada crude oil supply forecast indicates that oil sands production will have increased to the level that access to a major new market will be beneficial to producers.

http://www2.ccnmatthews.com/scripts/dnrp/release.asp?d=/cnrpxml/2005/4/14/266450_1_04142005120335PM.xml&t=enb

Looks to me that it is more like a memo of understanding. I could see Petro Can going along if the US is offered an agreement that they would pay going price in the even of a force majeure type of intervention.

The devil may be in the details as one has to wonder who is going to put their money at risk for twenty to thirty years without the required guarantees.