Page 10 - NorthAmOil Week 05 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Michigan approves underwater

tunnel for Line 5

MICHIGAN STATE regulators in Michigan have granted Another agency still has to decide whether
important permits for Enbridge’s Line 5 tunnel to approve a new pipe to run through the
project, bringing the plans one step closer to tunnel, which is scheduled for completion
going ahead. in 2024, and federal approval will also be
The Michigan Department of Environment, required.
Great Lakes and Energy (EGLE) has approved The approval of the tunnel comes as Whit-
the construction of the new underground tunnel mer is coming under pressure from Canadian
Line 5 currently runs that would house Line 5, which currently runs government and business interests to revoke an
along the bottom of the along the bottom of the Straits of Mackinac. The order to shut down Line 5 in May. Enbridge has
Straits of Mackinac. project has proved to be a contentious one, and also said it will not comply with the shutdown
Michigan Governor Gretchen Whitmer is seek- unless ordered to by a court.
ing to have the pipeline shut down altogether Nonetheless, some shippers on Line 5 are
on safety concerns, citing previous violations of cautious, with Canada’s Imperial Oil saying this
the easement that allows Line 5 to pass through week that it is preparing contingency plans to
the straits. However, EGLE officials said state move its crude from Western Canada to refiner-
law had limited their nine-month review to the ies in Ontario if Line 5 is shut down.
narrow question of whether the tunnel project Imperial’s CEO, Brad Corson, said on his
would comply with Michigan’s environmental company’s earnings call that he thought there
laws – and they found that it would. They said was a “very low probability” that Line 5 would
the fight over the pipeline itself was a separate be shut down. Nonetheless, he said Imperial was
issue from the tunnel. keeping a close eye on developments related to
The permits the EGLE granted allow the pipeline.
Enbridge to discharge wastewater into the Great Line 5 carries oil from Western Canada
Lakes and conduct its tunnel-building work in through Great Lakes states to Ontario. The twin
protected wetlands. pipeline also supplies propane to Michigan.™

INVESTMENT

Cenovus sets out capex plan for 2021

CANADA CANADA’S Cenovus Energy has unveiled its News of Cenovus’ budget came the same
capital expenditure budget for 2021. The com- month that the company closed its acquisition
pany said it would spend CAD2.3-2.7bn ($1.8- of Husky Energy, and its capex budget antici-
2.1bn) this year, including CAD2.1bn ($1.6bn) pates the combined company achieving nearly
on sustaining capital, and that its top priority CAD1bn ($780mn) of synergies in 2021 as a
would be debt reduction. result of the transaction. This puts the com-
Cenovus anticipates that this budget will pany on track to achieve its target of CAD1.2bn
result in upstream production of around 755,000 ($936mn) in annual run-rate synergies by the
barrels of oil equivalent per day (boepd) and end of the year, Cenovus said.
downstream throughput of roughly 525,000 bar- “With this budget we’re delivering on the
rels per day (bpd). Oil sands production is set commitments we made when we announced
to comprise 524,000-586,000 boepd, while con- the Husky transaction,” said Cenovus’ president
ventional onshore output accounts for 132,000- and CEO, Alex Pourbaix. “In 2021 we’ll remain
151,000 boepd and offshore for 61,000-72,000 focused on disciplined capital allocation, invest-
boepd. The oil sands are expected to account ing selectively in the highest return opportuni-
for the bulk of upstream spending, at CAD850- ties available in our expanded asset portfolio,
950mn ($663-741mn). and we expect to make significant progress
The company’s 2021 budget would be an towards achieving our synergy targets.”
increase on 2020, for which it is forecasting Also factored into the budget is CAD520-
spending of CAD750-850mn ($585-663mn). 570mn ($406-445mn) that will be spent on the
Its production is also set to be higher this year, rebuild of the Superior refinery in Wisconsin,
compared with a projected 432,000-486,000 which was damaged in an explosion and fire in
boepd in 2020 as oil sands producers shut in 2018. Cenovus noted that a “substantial” portion
output in response to the coronavirus (COVID- of the go-forward costs for this was expected to
19) pandemic. be recovered through insurance proceeds.™

P10 www. NEWSBASE .com Week 05 04•February•2021