John Alexander

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AltaGas has advanced its plan to be the first to export liquefied propane from the British Columbia coast, announcing Thursday it has struck a deal on an unspecified site and that it will build a new gas fractionating plant in northeastern British Columbia. AltaGas reported a net loss of $22 million in the second quarter versus a profit of $29 million a year earlier as revenue fell to $416 million from $471 million.

 

“On the growth front, we are well on our way to provide producers with a solution to weak liquids prices,” said chairman and chief executive David Cornhill on a conference call to discuss second-quarter results.

He said the Calgary-based company could invest over $1 billion over the next two years in B.C., including the liquefied petroleum gas (LPG) plant on the coast, the new fractionation facility worth about $100 million at Fort St. John and its previously announced $350-million Townsend gas plant in northeastern B.C., along with associated pipelines.

“The site will initially be able to handle 25,000 barrels per day with significant expansion opportunities,” said Cornhill. “We expect to finalize agreements by the end of the year and we expect to be the first to export LPG off Canada’s West Coast.”

AltaGas said it will make a final investment decision on the B.C. LPG facility next year. It is expected to buoy propane prices by giving Canadian producers awash in the fuel an alternative to domestic or U.S. sales. The propane would be delivered by rail.

Executives wouldn’t say whether part ownership would be extended to AltaGas’s partner, private Calgary-based Petrogas, or local native communities.

Meanwhile, AltaGas reported the Ferndale LPG export facility in Washington State operated by Petrogas is expected to ramp up exports to 25,000 bpd by the end of the year.

 

The Ferndale terminal acquisition in March 2014 provides a strong fit for AltaGas Ltd. and Idemitsu Kosan Co. Ltd., which recently acquired interests in Petrogas. The facility gives AltaGas direct offtake for its production and for Idemitsu to acquire North American LP gas for its sales and distribution infrastructure in Japan as well as its other interests in southeast Asia, the press release also notes.

The LP gas terminal has the capability to handle exports and imports of up to 30,000 barrels a day and has facilities to handle and supply propane to the regional market for U.S. domestic consumption. The terminal has rail, truck and pipeline capability and is connected to the two local refineries offering LP gas balancing services

 

AltaGas missed analyst expectations on earnings and cash flow for the three months ended June 30 mainly because it did not receive a dividend from Petrogas, in which it holds a 33 per cent stake.

Chief financial officer Deborah Stein said Petrogas, which diverted the money to invest in building storage facilities in the second quarter, is expected to pay $30 million to $40 million per year in future.

Cornhill said AltaGas is negotiating to receive more regular dividends from Petrogas in return for a pledge from AltaGas to support capital projects separately.

AltaGas reported a net loss of $22 million in the second quarter versus a profit of $29 million a year earlier as revenue fell to $416 million from $471 million.

FirstEnergy Capital analyst Steven I. Paget said second-quarter adjusted earnings of $107 million fell below his expectation of $128 million and consensus of $115 million, while adjusted cash flow per share was 50 cents, below FirstEnergy’s 69 cents and consensus of 62 cents.

AltaGas also confirmed Thursday it and its three international partners in Douglas Channel LNG plan to make a final investment decision in the fourth quarter of this year on their liquefied natural gas export facility.

They propose a barge-based facility near Kitimat to supercool and liquefy gas for export.

The project site is secured by a long-term lease with the Haisla Nation and initial capacity is to be 550,000 tonnes per year, making it one of the smallest of B.C.’s 18 or so proposals.

 

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Wednesday, Jul. 29, 2015

The following article was written by Gary Marr and published by the Financial Post.;

Under the new rules, CMHC will consider up to 100% of gross rental income from a two-unit owner-occupied property that is the subject of a loan application submitted for insurance. FOTOLIA

Canada Mortgage and Housing Corp. is going to make it easier for homeowners renting out apartments in their principal residences to borrow money, a move that could further heat up markets in Toronto and Vancouver.

The Crown corporation, which controls a majority of the mortgage default insurance market in Canada, announced changes to its rules Monday and effective Sept. 28 which are aimed at boosting affordable housing.

A background document sent to lenders and obtained by the Financial Post suggests the change is aimed at what CMHC sees as a significant part of the housing market.

“Many municipalities across the country now formally recognize secondary rental suites as a source of affordable housing,” CMHC wrote in its document intended for industry partners. “Rents in secondary rental suites are often lower than those for apartments in purpose-built rental buildings.”

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The Crown corporation has said Vancouver has 26,600 secondary units which comprise almost 20 per cent of the rental stock in the city.

The changes from CMHC would allow homeowners to count the income from their secondary units when qualifying for a loan, something that would seemingly bring more people into the housing market.

The Crown corporation has suggested this would target two unit owner-occupied homes and would likely include basement rental units, in-law apartments and garden suites known as laneway homes. It suggested, in its document to industry players, secondary apartments usually are self-contained with separate kitchen, sleeping and bathroom facilities.

One key issue will be whether the units are legal. CMHC only recognizes units that are legal or conform to local municipal standards. The Crown corporation says that it’s up to lenders to exercise judgment, when it comes to borrowers proving the units are legal.

Homeowners with less than a 20 per cent down payment and borrowing from a regulated financial institution must get government backed mortgage default insurance. Even financial institutions not regulated by Ottawa, like credit unions, must abide by CMHC rules to be covered by the government backing.

Under the new rules, CMHC will consider up to 100 per cent of gross rental income from a two-unit owner-occupied property that is the subject of a loan application submitted for insurance. The annual principal, interest, municipal tax and heat for the property including the secondary suite must be used when calculating the debt service ratios.

Rob McLister, founder of ratespy.com, said homeowners with legal units can now only count 50 per cent of the income from legal rentals for calculating their household income which determines how much they can borrow. “It will be marginally inflationary for single family homes,” said McLister.

The change comes on a day when one economist predicted prices in the Toronto and Vancouver markets could drop by as much as 30 per cent. “Lower mortgage rates have enabled Canada’s key housing markets to defy gravity for the past few years. But with prices rising dangerously high relative to household incomes, there is the potential for a large correction down the road,” wrote David Madani, of Capital Economics, in a note out Tuesday.

Doug Porter, chief economist with Bank of Montreal, said it might encourage some people to jump into the housing market who might have been on the fence.

“I think first and foremost this tries to address the lack of affordable housing. Whether it will be effective is another issue,” said Porter, who thinks it will help on the margins.

Elton Ash, region executive vice-president of Re/Max of Western Canada, said the changes will make a difference in Toronto and Vancouver. “It could have a very strong positive effect on qualifying for a mortgage,” he said, adding there’s strong interest from consumers in renting out part of their primary residences.

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Tags: Mortgages & Real Estate, Canada Mortgage And Housing Corporation

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Hydro releases new poll on Site C ahead of planned construction start

 The controversy at times has been heated and in the north most people have heard both sides of the story but according to BC Hydro the majority is in favour.

BC Hydro is touting results of a new poll this morning saying support of the Site C project has gained momentum across the province, but BC residents don’t appear to side one way or the other on how to meet future hydro needs.

The telephone survey of 1,038 people by Abacus Data released Tuesday found that 59 per cent of British Columbians support the construction of the $8+billion dam, with only 17 % of those surveyed opposed.

An additional 22 % said they would “accept” construction under certain circumstances, according to the results, though those circumstances were not clearly defined.

Looking at it regionally, the survey included 303 people from the north and northeastern portion of the British Columbia.

 Abacus claims the regional support for the dam’s construction is much of the same — just 51 per cent support building the Site C Dam, with 26 per cent opposed to building the Site C Dam.  Another 22 per cent said they would accept the dam’s construction conditionally providing it met certain criteria, which was not clearly defined.

The telephone survey was conducted between June 10 and 19, and has a margin of the error of 3.9 per cent.

The Polls results also suggests that 92 per cent of people surveyed agreed demand for electricity in the province will increase in the coming years but they were unclear on how much that increase would be.

According to the poll, 75 per cent supported adding a new hydro dam and generating station to meet those needs.

However, another 75 per cent supported buying more power from independent power producers operating smaller wind and run-of-river hydro projects.

Another 64 per cent supported building more natural gas power plants.

So the popularity according to the Poll has increased and it could be said that the majority of BC Residents are in favour of it.

 
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