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Calgary Herald
a day ago
- Business
- Calgary Herald
Canada's historic first cargo of LNG sets sail for buyers in Asia
A tanker carrying the first cargo of liquefied natural gas from LNG Canada set sail Monday from British Columbia's northern coast, heralding the commercial startup of the $18-billion Shell PLC -led export terminal and ushering in Canada's long-awaited debut into the global LNG market. Article content The GasLog Glasgow, a vessel chartered by Shell, arrived early Saturday at the Port of Kitimat for loading and is expected to deliver the country's first large-scale cargo of LNG to Asia in the coming days. Article content Article content Article content 'We're very proud to be leading a new energy business in Canada at scale,' LNG Canada chief executive Chris Cooper said, calling it an 'historic' moment that shows the country can 'stand on its own two feet.' Article content Article content 'We're helping Canada diversify its export markets, and, in doing that, we're providing a secure supply of energy to folks in Asia who are looking to further decarbonize,' he said. Article content The inaugural cargo comes nearly 15 years after the first application for a licence to export LNG from the West Coast was submitted to federal regulators. Since that time, more than a dozen LNG projects aiming to capitalize on Canada's shorter shipping distances to Asia and abundant supply of natural gas have come and gone amid political flare-ups over pipelines, tightening environmental standards and shifting global market dynamics. Article content 'There were quite a lot of people trying to get LNG facilities to proceed. LNG Canada was the one that went ahead,' Cooper said. 'I think we've enabled the ecosystem for further investment. You see Woodfibre LNG coming, you see Cedar LNG and you see Ksi Lisims LNG also coming, so I think that catalyst is now started.' Article content Article content A lot of 'hopes and dreams' are tied to the success of LNG Canada, said Ian Archer, an associate director at S&P Global Inc. and an expert in North American natural gas markets. Article content Article content 'Not only for the backers of the project to prove that it works, but also for a lot of the projects that are now in the queue to say, 'Look, we can do this,'' Archer said. 'It's really a very significant event for Canadian natural gas, because not only does it provide the first gas that does not go to a single market, it also proves that the concept works and says that this is something that we can push forward and expand.'
Yahoo
a day ago
- Business
- Yahoo
Canada's historic first cargo of LNG sets sail for buyers in Asia
A tanker carrying the first cargo of liquefied natural gas from LNG Canada set sail Monday from British Columbia's northern coast, heralding the commercial startup of the $18-billion Shell PLC-led export terminal and ushering in Canada's long-awaited debut into the global LNG market. The GasLog Glasgow, a vessel chartered by Shell, arrived early Saturday at the Port of Kitimat for loading and is expected to deliver the country's first large-scale cargo of LNG to Asia in the coming days. 'We're very proud to be leading a new energy business in Canada at scale,' LNG Canada chief executive Chris Cooper said, calling it an 'historic' moment that shows the country can 'stand on its own two feet.' 'We're helping Canada diversify its export markets, and, in doing that, we're providing a secure supply of energy to folks in Asia who are looking to further decarbonize,' he said. The inaugural cargo comes nearly 15 years after the first application for a licence to export LNG from the West Coast was submitted to federal regulators. Since that time, more than a dozen LNG projects aiming to capitalize on Canada's shorter shipping distances to Asia and abundant supply of natural gas have come and gone amid political flare-ups over pipelines, tightening environmental standards and shifting global market dynamics. 'There were quite a lot of people trying to get LNG facilities to proceed. LNG Canada was the one that went ahead,' Cooper said. 'I think we've enabled the ecosystem for further investment. You see Woodfibre LNG coming, you see Cedar LNG and you see Ksi Lisims LNG also coming, so I think that catalyst is now started.' A lot of 'hopes and dreams' are tied to the success of LNG Canada, said Ian Archer, an associate director at S&P Global Inc. and an expert in North American natural gas markets. 'Not only for the backers of the project to prove that it works, but also for a lot of the projects that are now in the queue to say, 'Look, we can do this,'' Archer said. 'It's really a very significant event for Canadian natural gas, because not only does it provide the first gas that does not go to a single market, it also proves that the concept works and says that this is something that we can push forward and expand.' Construction on LNG Canada's 14-million-tonnes-per-annum (mtpa) facility began almost seven years ago and operations have begun at a moment when demand is weak for natural gas across North America, amid broader economic and geopolitical uncertainty. Most forecasts, however, including the U.S. Energy Information Administration's latest Short-Term Energy Outlook, call for natural gas prices to strengthen in the second half of 2025 on rising demand for power and expanding LNG export capacity — with the EIA projecting the spot price of U.S. benchmark Henry Hub to average US$4 per million British thermal units (MMBtu) in 2025, up substantially from US$2.20/MMBtu in 2024. Energy producers in Western Canada and their investors have waited impatiently for LNG Canada's startup, hoping to see a boost in returns as growing volumes of gas begin making their way to Canada's West Coast for export — something akin to the uplift in Canadian crude prices that followed the Trans Mountain pipeline expansion (TMX) project — but so far experts say there are few signs that the newly commissioned facility is having a material impact on markets. Prices for Western Canada's natural gas, which trade at a discount to Henry Hub, have been hit hard by a combination of high storage inventories and pipeline flow restrictions that kept the average cash price for AECO, Canada's primary gas price benchmark, below $1/MMBtu in June. 'We're dealing with a market that's extremely oversaturated and there's lots of gas available,' Archer said. 'Similar to TMX, we do anticipate that there'll be an impact (from LNG Canada) on prices, but we're not seeing it yet and we expect it'll probably take a little bit of time to happen.' Despite the near-term price doldrums, Canada's energy sector has been buoyed by growing anticipation of a structural increase in demand for natural gas across North America, driven by U.S. LNG export capacity nearly doubling by the end of the decade to between 24 and 26 Bcf/d. Canada's nascent LNG industry could also grow substantially by the end of the decade, from the roughly 2.5 Bcf/d currently under construction or operating, to more than 6 bcf/d if existing projects proceed as planned — including a Phase 2 expansion of LNG Canada which would double the facility's capacity to 28 mtpa. 'We expect natural gas prices to strengthen to between $4 and $5 over the coming year, and as Canada increases its LNG capacity, we think the current discount on Canadian natural gas should fall from about $2 today, to between $1.10 to $1.30,' Toronto-based investment firm Ninepoint Partners LP wrote in its 2025 mid-year outlook published last week. LNG Canada's joint-owners — Shell, Malaysian energy giant Petronas, PetroChina, Mitsubishi Corp. and Kogas — are currently deciding whether to green-light Phase 2 and Cooper said the partners are closely watching the facility's startup. 'We just want to see all that working: the supply chain, the logistics and how all that works,' Cooper said, adding that the partners will be weighing the cost of expanding the project and the competitiveness of Canadian LNG, as well as other considerations around Canada's policy environment, concerns over greenhouse gas emissions and input from stakeholders. 'So you've got one bit, which is (getting) Phase 1 working, and the second bit, which is actually proofing out the economic proposition for Phase 2,' he said. A report earlier in June that Petronas was exploring the sale of its Canadian assets — a claim the company has since emphatically denied — may have reignited long-standing concerns in Canada's energy sector over the potential flight of global investment. But Cooper said all five joint-venture partners in LNG Canada remain 'very interested' in the project's expansion. 'We continue to work with our five joint venture partners who invested in Phase 1 and we don't see that changing at the minute.' If Canada wants to be the world's energy partner, we need to act like it What is the Strait of Hormuz and why is it so important for oil markets? Prime Minister Mark Carney said Monday that Canada 'has what the world needs' in a statement responding to news of the first cargo's departure. 'With LNG Canada's first shipment to Asia, Canada is exporting its energy to reliable partners, diversifying trade, and reducing global emissions — all in partnership with Indigenous Peoples,' he said. 'By turning aspiration into action, Canada can become the world's leading energy superpower with the strongest economy in the G7.' • Email: mpotkins@ Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Forbes
6 days ago
- Business
- Forbes
Shell Won't Buy BP, Should You?
CHINA - 2025/06/22: In this photo illustration, the logo of BP p.l.c. is displayed on the screen of ... More a smartphone. (Photo Illustration by Sheldon Cooper/SOPA Images/LightRocket via Getty Images) Shell refuted the takeover rumors, yet the speculation emphasizes what investors are beginning to recognize: BP's significant discount and strategic shift might be due for reevaluation. BP plc stock (NYSE: BP) experienced a jump of as much as 10% intraday on June 25 following a report from The Wall Street Journal indicating that Shell PLC (NYSE: SHEL) is in preliminary discussions to purchase the British oil giant in a deal that could be the largest in the energy sector for decades. Shell promptly rejected the report, but the market's response was telling—BP shares eventually ended up 1.6%, suggesting that investors are reassessing the company's strategic worth and potential for a takeover. With shares trading around $30 and increasing only 3% this year, BP has lagged behind the S&P 500 and is well behind its U.S. counterparts. However, hidden beneath this modest performance is a complicated situation: a company in strategic transition, possessing a substantial upstream footprint, fluctuating earnings, and a revised energy strategy. With a market capitalization of $80 billion—less than half of Shell's—BP might be more susceptible than ever to merger and acquisition speculation. Nevertheless, if you seek potential gains with a steadier experience than an individual stock, consider the High Quality portfolio, which has outperformed the S&P and achieved >91% returns since its inception. Separately, see – What's Happening With BBAI Stock? M&A Chatter Unlikely – For Now Notwithstanding the headlines, a complete Shell acquisition of BP remains extremely improbable. For starters, BP holds $60 billion in debt (approximately $27 billion in net debt), a legacy partly stemming from the Deepwater Horizon disaster, which deters financially cautious bidders. In addition, any merger involving two European oil titans would inevitably attract immediate examination from regulators in the U.K., EU, and U.S., particularly concerning dominance in upstream production, LNG, and fuel retailing. Beyond antitrust concerns, a transaction of this magnitude would elicit political backlash. The U.K. government regards BP as a strategic asset, and endorsing a takeover—even by another British-Dutch entity—could incite nationalist opposition. Merging two global energy giants with differing strategies would also introduce operational challenges. A more feasible outcome? BP could be dismantled and sold in parts to various buyers. This route would be easier to navigate legally and might release more value than a massive merger. Valuation: A Discount? From a valuation perspective, BP appears appealing. The stock is trading at a price-to-sales ratio of merely 0.44x—roughly 20% to 30% lower than its five-year average. In comparison, integrated oil firms like Exxon Mobil (NYSE: XOM), Chevron Corporation (NYSE: CVX), and Shell attract significantly higher P/S ratios ranging from 0.7x to 1.3x. The discount indicates investor apprehension regarding BP's evolving strategy, declining earnings, and structural obstacles. Nonetheless, it also provides the possibility of upside if execution stabilizes. Refer to our analysis BP Valuation for additional insights into what is influencing our price estimate for the stock. Quarterly Struggles, Long-Term Promise Q1 results illuminated BP's internal conflict. Oil production and operations produced solid profits due to increased volumes and pricing. However, gas trading and low-carbon ventures faltered, dragging down overall performance. The company reported an underlying replacement cost profit of $1.38 billion, falling short of the $1.6 billion consensus and a significant decrease from $2.7 billion the previous year. Looking forward, production is anticipated to decline in 2025 due to asset divestitures, while refining margins and currency headwinds continue to exert pressure. Still, BP has three new startups and six discoveries in development, presenting growth potential if it can stabilize its performance. Strategy Shift: Back to Black Gold After years of fluctuating between green ambitions and fossil fuel fundamentals, BP is recalibrating its direction. In 2020, the company committed to a 40% reduction in oil output and to take a leading role in renewables. However, lackluster returns and increasing pressure from shareholders have reversed that commitment. Currently, BP is intensifying its focus on oil and gas, aiming for 2.5 million barrels of oil equivalent per day by 2030—up from just under 2.4 million last year. Concurrently, it has cut renewable spending from $5 billion to as low as $1.5 billion annually and increased traditional capital expenditures to $10 billion. Changes in executive roles—most notably the upcoming departure of Giulia Chierchia, EVP of strategy and sustainability—further indicate a definitive shift back to hydrocarbons. Hydrogen Plays Still On the Table Despite scaling back on renewables, BP continues to engage in hydrogen initiatives. Its pipeline includes joint ventures with Iberdrola in Spain and Cummins in Germany, along with H2Teesside—one of the U.K.'s largest planned blue hydrogen production sites. These initiatives suggest that BP isn't entirely relinquishing its energy transition goals but is rather refocusing on technologies with more immediate economic potential. The Bottom Line: Merger Unlikely, Value in Focus Although a Shell–BP merger may capture headlines, it realistically faces too many obstacles—regulatory, political, and financial—to become a reality anytime soon. Still, the speculation underscores something far more significant: BP's depressed valuation and strategic uncertainty are attracting renewed interest. For value-minded investors, BP might present upside—provided that the company successfully implements its renewed oil-centric strategy and regains margin confidence. Trefis partners with Empirical Asset Management—a wealth manager based in the Boston area—whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P plummeted by more than 40%. Empirical has integrated the Trefis HQ Portfolio into its asset allocation methodology to offer clients improved returns with reduced risk compared to the benchmark index—a less tumultuous experience, as indicated by HQ Portfolio performance metrics.
Reuters
7 days ago
- Business
- Reuters
Shell in early talks to buy BP, WSJ reports
June 25 (Reuters) - Shell (SHEL.L), opens new tab is in early talks to buy rival BP (BP.L), opens new tab in a deal worth roughly $80 billion, the Wall Street Journal reported on Wednesday, citing people familiar with the matter
Toronto Sun
23-06-2025
- Business
- Toronto Sun
EDITORIAL: Energy independence is true 'nation building'
Canada's first large-scale liquified natural gas plant in Kitimat, B.C. is capable of shipping beyond the U.S. market. While it's a long way from making us an energy superpower, the start-up on Sunday of Canada's first large-scale liquified natural gas plant in Kitimat, B.C., capable of shipping beyond the U.S. market, is a welcome first step. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account LNG Canada, a joint venture of Shell PLC, Petronas, PetroChina, Mitsubishi Corp. and Kogas began production Sunday, according to the Reuters news agency, with its first tanker shipment for export scheduled for the middle of this year. That it has taken this long to get an LNG plant online, capable of shipping our natural gas abroad, when we are the world's fifth-largest producer and sixth-largest exporter of natural gas — but until now only to the U.S., meaning it has to be sold at a huge discount — is disappointing. It has also cost our economy billions of dollars annually. This even as many countries, including Ukraine, Germany, Poland, Greece, South Korea and Japan, have expressed an interest in buying Canadian LNG after Russia, a major producer and exporter, invaded Ukraine in February 2022, putting its continued supplies in doubt. Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. With two smaller Canadian LNG export facilities by Woodfibre LNG and Cedar LNG now under construction and expected to be completed between 2027 and 2028, Canadians will now have real-world examples of whether these plants are economically viable or not, as critics claim. Meanwhile, Canada's Trans Mountain pipeline — built by the federal government at a cost of $34 billion, five times the original estimate — remains Canada's only way to ship Canadian oil to Asia and other international markets, while also supplying the U.S. This despite the fact that Canada is the world's fourth-largest producer and third-largest exporter of crude oil, again costing our economy billions of dollars annually because most of it is sold to the Americans at a huge discount. This advertisement has not loaded yet, but your article continues below. Read More Oil and natural gas infrastructure should be among the 'nation-building' projects Prime Minister Mark Carney's government earmarks for green-lighting because, until now, the lengthy regulatory process for approving them has discouraged private investors. Given the massive loss to the Canadian economy that has resulted from this, it's time we stopped cutting our own economic throats by expanding global access to our oil and gas resources and making ourselves less dependent on the United States. RECOMMENDED VIDEO Toronto & GTA Toronto Maple Leafs Toronto Blue Jays NBA Ontario
