Page 10 - NorthAmOil Week 47 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

TC Energy seeks damages for

Keystone XL cancellation

NORTH AMERICA CANADA’S TC Energy is seeking to recoup to challenge US policy decisions. NAFTA was
more than $15bn in damages from the US gov- replaced by the US-Mexico-Canada Agreement
ernment for the withdrawal of the cross-border (USMCA) in 2020, with the new agreement lim-
permit for its Keystone XL oil pipeline, which iting investor-state actions. However, it allows for
effectively killed off the project. certain legacy claims to be made under NAFTA,
The permit was withdrawn by US President including TC Energy’s claim.
Joe Biden immediately after he took office in Jan- “The US decision to revoke the permit was
uary. This marked the final chapter for the pipe- unfair and inequitable,” TC Energy said in its
line, which had initially been rejected by former filing, going on to blame the country for put-
US President Barack Obama in 2015, only for his ting Keystone XL on a 13-year “regulatory
successor, Donald Trump, to approve the project roller coaster”. The company has said it is trying
when he took office. Biden had served under to recover the investment it lost while attempt-
Obama as vice-president, and several of his ing to build the 1,179-mile (1,897-km) pipe-
policies mark a continuation from the Obama line, which would have carried up to 900,000
administration, though he is also trying to take barrels per day (bpd) of crude from Alberta to
a tougher line on environmental issues and cli- the US.
mate change. “We’re not doing this for symbolic or polit-
TC Energy terminated Keystone XL shortly ical purposes. This is a business decision,” TC
after Biden revoked the presidential permit. Energy’s senior vice-president for liquids pipe-
The company has said that it has no intention lines, Richard Prior, told Bloomberg. “We had
of reviving the project. However, its request for all the permits and requirements in place to
arbitration formally opens one of the largest ever start construction on the line, and did so, and
trade appeals against the US. we worked with federal and state regulators in
The legal claim is being mounted under pro- both countries for a very long period of time.
visions of the North American Free Trade Agree- This is just about recovering that destroyed value
ment (NAFTA) that allow foreign companies of investment.”™

INVESTMENT

Paloma to buy Goodrich for $480mn

US A subsidiary of privately owned Paloma Partners gas player Southwestern Energy announced that
has struck a deal to acquire Goodrich Petroleum it had agreed to acquire privately backed GEP
for around $480mn. The transaction comes as Haynesville. That deal is set to close by the end
consolidation continues across the US shale of this year.
industry, with Goodrich emerging as an attrac- Recent gas market trends have also played a
tive acquisition target thanks to its position in part in driving consolidation in the Haynesville
the Haynesville shale gas play. and elsewhere, with natural gas prices rising
Goodrich was previously known as a major alongside demand, while supply bottlenecks
player in the oil-rich Tuscaloosa Marine shale in have also emerged over the past year.
Louisiana, and had hoped that the play would Under the terms of the new agreement, Pal-
prove to be prolific. However, as oil prices crashed oma will pay $23 per share in cash to acquire all
those hopes diminished. Goodrich filed for of Goodrich’s common stock. This represents a
Chapter 11 bankruptcy protection in April 2016, roughly seven percent premium to Goodrich’s
emerging from it in October of the same year. closing price on November 19, and a 47% pre-
The company subsequently turned its atten- mium to its year-to-date volume-weighted aver-
tion to drilling for gas in the Haynesville shale, age price.
where consolidation has been playing out – in Paloma is backed by EnCap Investments and
line with other prolific shale regions in the US. Macquarie Americas. Upon the deal’s closing,
In the Haynesville’s case, proximity to the Gulf which is expected in December 2021, Goodrich
Coast has been a major draw for buyers as will become a privately held company and shares
demand from liquefaction plants in Louisiana of its common stock will no longer be listed on
and Texas has grown. Earlier this month, shale any public market.™

P10 www. NEWSBASE .com Week 47 25•November•2021