Kinder Morgan CEO 'appreciates' Ottawa's offer to backstop pipeline delay costs - Canadanewsmedia
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Kinder Morgan CEO 'appreciates' Ottawa's offer to backstop pipeline delay costs

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The CEO of Kinder Morgan Canada Ltd. says he "appreciates" an announcement by Finance Minister Bill Morneau that the government will compensate investors in the proposed Trans Mountain pipeline expansion if "unnecessary delays" cause costs to rise.

Morneau says the government is willing to "provide indemnity" to any investors, be they the project's original architects or otherwise, to ensure the controversial Alberta-B.C. project is able to proceed.

"We acknowledge the comments by Minister Morneau this morning and appreciate his acknowledgement of the uncertainty created by the B.C. Government's stated intentions to 'do whatever it takes to stop the Trans Mountain Expansion Project' and the 'exceptional political risk' this federally and provincially-approved project continues to face. We appreciate his recognition that a private company 'cannot resolve differences between governments,'" CEO Steven Kean said in a written statement.

"We remain steadfast in our previously stated principles: clarity on the path forward, particularly with respect to the ability to construct through British Columbia, and ensuring adequate protection of our KML shareholders." 

'Will not negotiate in public'

"While discussions are ongoing, we are not yet in alignment and will not negotiate in public," Kean said. "As we have stated, the May 31st deadline for these discussions is necessitated by approaching construction windows, the time required to mobilize contractors, and the need to commit significant new materials orders, among many other imperatives associated with such a large project."

Kean offered no further comment during his remarks and declined to talk to reporters after his company's first annual general meeting since being spun off by U.S.-based Kinder Morgan Inc. to hold most of its Canadian assets a year ago.

Nenhsi calls Horgan's stance unethical

Calgary Mayor Naheed Nenshi also welcomed Wednesday's update from the federal government.

As he has in the past, Nenshi took aim at B.C. Premier John Horgan's decision to ask his province's highest court if his government has the right to seek permits from companies that want to increase the amount of bitumen being shipped to the West Coast.

"It is very, very clear that Premier Horgan's strategy here was never to win a court case. He knows he's not going to win that court case. I'm sure he knows that. But it was to cause enough delay and uncertainty to scare away the investors," Nenshi said.

Nenshi described Horgan's actions as "particularly unethical."

Last month, the Kinder Morgan said it would stop all non-essential spending on the expansion project to triple the amount of oil flowing from Alberta to the West Coast, which Alberta says is critical to reduce discounts on its product due mainly to pipeline bottlenecks.

Kean reiterated that construction won't be restarted unless there are sufficient assurances by the end of this month that it can proceed.

Outside the meeting in downtown Calgary, about 50 vocal pipeline supporters armed with signs and slogans assembled on the sidewalk, chanting as passing cars honked their horns.

Picketers Mike Owens and Derek B. Cooper say they were unimpressed with Morneau's announcement, adding it offers further proof that the Liberal government has done too little to make sure the pipeline wins approval.

Picket organizer James Robson of the Canada Action Coalition says the government shouldn't have to offer money to make sure an approved pipeline will be built.

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OPEC threatens to turn on the spigots as oil price briefly hits highest point since 2014

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The price of the North American oil benchmark briefly touched $72 US a barrel late Tuesday despite the OPEC oil cartel publicly mulling boosting supply as soon as next month.

The price of West Texas Intermediate, the North American oil benchmark commonly known as WTI, was changing hands as high as $72.83 at one point on Tuesday. Although it slumped slightly lower on Wednesday, that was the highest level since November 2014.

Supply concerns in Venezuela and Iran have been overhanging the market for months, driving prices higher. 

Then late Tuesday the oil-producing cartel known as OPEC suggested it may soon turn on the spigots a little, after curbing its supply for the better part of the past year to boost prices.

The notoriously fractious cartel has been uncharacteristically collaborative of late, as OPEC and Russia had agreed to curb their collective output by about 1.8 million barrels per day until the end of 2018.

Last month, the cartel reported 166 per cent compliance to its own cut targets — meaning it has been pumping even less oil than it had planned to.

But speaking to a Reuters reporter on Tuesday, one unnamed OPEC source said the group is considering lifting those limits sooner than anticipated, in part because of the rising price of oil. 

While WTI was briefly at $72 US, Canadian oil companies have also seen their prices rise. The blend of oil from Alberta's oilsands is known as Western Canada Select and it, too, has risen to a more than three-year high, almost touching $58 U.S. on Tuesday.

Higher oil prices are doubly helpful for Canadian producers, because they are priced in U.S. dollars, while Canadian companies book most of their expenses in Canadian dollars.

In Canadian terms, WTI is currently trading as high as $91 a barrel, Bank of Montreal economist Doug Porter noted on Tuesday.

"That's up 50 per cent  from just eight months ago."

In Canadian dollar terms, the price of WTI is now where it was, on average, during what Porter called the "go-go years for oil prices," between 2007 and 2014.

"The lack of a currency response means that Canadian consumers are feeling the full impact of higher oil prices," he said.

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Comcast prepares to top Disney's $50-billion offer for Fox

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Comcast Corp confirmed for the first time on Wednesday it was preparing a higher, all-cash offer for the businesses that Twenty-First Century Fox has agreed to sell to Walt Disney Co.

While the U.S. cable operator said it was still considering its position, it said it was in advanced stages of readying an offer that would be “superior” and “at a premium” to Disney’s all stock offer.

“While no final decision has been made, at this point the work to finance the all-cash offer and make the key regulatory filings is well advanced,” Comcast said.

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Sources familiar with the deal told Reuters at the start of May that Comcast was preparing bridge financing for a cash offer for the Fox assets, but Wednesday’s statement is the first formal confirmation by the company it is ready to move.

The same sources said Comcast Chief Executive Brian Roberts will only proceed with a bid if a federal judge next month allows AT&T Inc’s planned $85 billion acquisition of Time Warner Inc to proceed.

Disney in December offered stock then worth $52.4 billion to buy Fox’s film, television and international businesses as it bids to beef up its offering against streaming rivals Netflix Inc and Amazon.com Inc.

Disney shares have fallen nearly 3.3 percent since, reducing the value of the offer to just over $50 billion.

“It all depends on the AT&T and Time Warner deal,” said Brian Weiser, analyst at Pivotal Research. “If that goes through it is highly possible there will more than one bid for Fox.”

Fox and Disney were not immediately available for comment.

Comcast, owner of NBC and Universal Pictures, has also made a 22 billion pound ($30 billion) offer to acquire the 61 percent stake in European pay-TV group Sky Plc that Fox does not already own. In doing so, it topped an earlier offer for the entirety of Sky by Fox.

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A regulatory filing in April showed Comcast offered to acquire most of Fox’s assets in an all-stock deal valued at $34.41 per share, or $64 billion last November – just before Disney’s offer was agreed.

After a sale, Fox’s remaining assets will include Fox News, Fox Business Network and sports cable networks.

Comcast shares were down 2 percent at $31.83 while Disney was down 0.7 percent at $103.26 in premarket trading.

“I think Fox, or its controlling shareholder and Board of Directors, has already expressed their preference – Disney, even though Comcast allegedly offered a higher consideration already,” said Jeffrey Logsdon, an analyst with JBL Advisors in California.

“Comcast does seem intent on winning this one (and) rivalry can frequently drive prices to un-economic levels.”

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Comcast v. Disney: a fight for Twenty-First Century Fox

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PHILADELPHIA — Comcast may make an offer for Twenty-First Century Fox, potentially putting it in a head-to-head bidding war with Disney.

Comcast Corp. on Wednesday did not provide specific details on a bid, other than to say that it would be all cash and at a premium to the value of Disney’s current all-stock offer.

The Wall Street Journal and others reported earlier this month that Comcast had $60 billion to challenge Disney.

Disney’s $52.4 billion bid would go a long way in allowing it to better compete with technology companies in the entertainment business. Any tie-up would put in its stable more Marvel superheros, as well as the studios that produced the Avatar movies, “The Simpsons” and “Modern Family.” Disney would control Fox’s cable and international TV businesses as well.

Comcast said Wednesday that it’s in the “advanced stages” of preparing its bid. The Philadelphia company said the structure and terms of its offer would be at least as favourable as Disney’s.

A potential transaction with either Disney or Comcast would not include the Fox News Channel, Fox Business Network, Fox Broadcasting Company and certain other assets.

Comcast’s stock fell 2 per cent in premarket trading, while shares of the Walt Disney Co., based in Burbank, California, dipped slightly.

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