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Oil begins moving on $34 billion Trans Mountain pipeline expansion – CP24

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Amanda Stephenson, The Canadian Press


Published Wednesday, May 1, 2024 4:00PM EDT

CALGARY – Canada’s energy sector as well as the country’s main oil-producing province celebrated Wednesday as the long-awaited $34-billion Trans Mountain pipeline expansion officially came online.

Crown corporation Trans Mountain Corp. issued a statement Wednesday confirming that oil is now moving on the expanded pipeline, which is currently 70 per cent full as crude continues to be added to the new system.

The company said the so-called “Golden Weld,” the final piece of construction work required to complete the pipeline, took place April 11 in B.C.’s Fraser Valley, between the communities of Hope and Chilliwack.

It said tanker ships will be able to load oil for delivery to Pacific and Asian markets by mid-May.

“Trans Mountain has demonstrated that challenging, long linear infrastructure can be built in Canada,” said Trans Mountain Corp. CEO Dawn Farrell in the statement.

“With our project management team and contractors, we were able to build 988 kilometres of new pipeline, 193 kilometres of reactivated pipeline, 12 new pump stations, 19 new storage tanks, and three new berths at Westridge Marine Terminal in Burnaby.”

“This is a great day for Canada, to get this pipeline up and running,” said Jon McKenzie, CEO of Cenovus Energy Inc. on a conference call with analysts Wednesday morning.

“The people of Canada are going to see the benefit for a long period of time in terms of increased taxes and royalties and the like.”

Alberta premier Danielle Smith also hailed the milestone, saying in a news release that the expanded pipeline means “a new era of prosperity and economic growth.”

“The completion of TMX is monumental for Alberta,” Smith said.

“For Alberta this is a game-changer. The world needs more reliably and sustainably sourced Alberta energy, not less.”

The Trans Mountain pipeline expansion project involved twinning an existing pipeline that runs from Alberta to the B.C. coast. The expansion increases the Trans Mountain system’s shipping capacity from 300,000 barrels per day to 890,000 barrels per day, and will help open up global export markets for Canadian oil.

The increased capacity is also expected to help improve the price Canadian oil companies receive for their product.

But while the project’s completion is being hailed by Canada’s energy sector as a win, it did not come easily.

The pipeline expansion was first proposed in 2012 by Kinder Morgan Canada, which encountered so much environmental and Indigenous opposition that it ultimately threatened to scuttle the project.

The federal government purchased the pipeline for $4.5 billion in 2018 in an effort to get the project over the finish line. Once construction did start, the project ran into numerous delays and budget overruns, with its price tag spiralling over the course of four years to an eye-popping $34 billion.

Cenovus’ McKenzie said Wednesday he didn’t want to taint “a great day” with too much talk of the project’s challenges. But he suggested the difficulties encountered by Trans Mountain are indicative of a broader problem.

“I think as a nation we suffer – and I don’t think I’m saying anything that people don’t already know – from lower and decreasing productivity, and we need to find ways to get major projects built to get infrastructure built to the benefit of all Canadians,” McKenzie said.

“And I think we would all realize that 13 years is far too long for a project of this national importance to get built.”

The cost and challenges associated with building Trans Mountain also cast a shadow over its ultimate sale. The federal government has indicated it does not wish to be the long-term owner of the pipeline, but the expansion project’s ballooning price tag means experts say the government will likely have to take a significant writedown if it is able to sell the asset.

The Trans Mountain saga has also left some wondering whether an oil pipeline will ever again be built in this country.

Industry watchers say the Trans Mountain expansion will reach its maximum capacity within just a handful of years, thanks to increased oil output by Canadian producers. But the time, cost and regulatory burden associated with building a similar project would be major investment barriers.

“It is increasingly difficult to build pipelines in this country, and it wouldn’t surprise me if this was the last pipeline,” McKenzie said.

“But the reality is we have a tremendous resource here in Canada and we produce our oil in my view, more sustainably than probably anywhere else in the world. And if we were in a position where, as a nation, we decided to take that to market, we should be building more pipelines.”

This report by The Canadian Press was first published May 1, 2024.

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

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