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LNG Canada, TC Energy disagree on cost overruns for $6.6-billion Coastal GasLink pipeline

LNG Canada, TC Energy disagree on cost overruns for $6.6-billion Coastal GasLink pipeline


TC Energy now signalling that it intends to negotiate higher tolls on the pipeline

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CALGARY – The top executive at LNG Canada says the company is disappointed with its pipeline contractor TC Energy Corp. over announced delays and cost overruns for the Coastal GasLink pipeline, as construction ramps up on its massive export project.

“Like any other relationship or friendship, sometimes you disagree on certain issues,” LNG Canada CEO Peter Zebedee said of Calgary-based TC Energy Corp., which is building a pipeline to connect northeast British Columbia’s gas fields with his company’s $30-billion liquefied natural gas (LNG) export terminal in Kitimat, B.C.

“To be frank, I was disappointed with the comments that were made,” Zebedee said, referring to Calgary-based pipeline giant TC Energy announcing on an earnings call on Feb. 18 that work had temporarily stopped on the 2.1-billion-cubic-feet-per-day Coastal GasLink pipeline due to COVID-19 protocols and the project would likely be delayed and would likely be finished over its $6.6-billion budget.

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“We do expect Coastal GasLink to live up to their commitments around costs and schedule,” Zebedee said in an interview with the Financial Post.

TC Energy has been building the pipeline to connect natural gas fields in northeast B.C. with the LNG Canada project in Kitimat, and is now signalling that it intends to negotiate higher tolls on the pipeline.

“We are working with LNG Canada on establishing a revised project plan for Coastal GasLink,” TC Energy president and CEO Francois Poirier said Feb. 18. “We expect that project costs will increase and the schedule will be delayed due to scope increases, permit delays and the impact of Covid-19, including the provincial health order.”

British Columbia’s chief medical officer issued an order at the end of December, requiring all major project work in the province’s north to submit new plans on COVID-19 mitigation. The order caused a work pause for both Coastal GasLink and LNG Canada, though work is now scaling back up on the export project and the workforce is expected to rise from 1,200 people to 3,000 people by the end of the month.

LNG Canada site
TC Energy has been building the pipeline to connect natural gas fields in northeast B.C. with the LNG Canada project in Kitimat. Photo by Courtesy LNG Canada

Construction is ramping up on LNG Canada and the first pre-fabricated steel modules are expected to arrive on site later this year from Asian construction yards, at which point the workforce will expand further until it ultimately reaches 7,000 people.

As work progresses, the two companies are working to contain costs.

“Coastal GasLink will continue to mitigate these impacts to the extent possible and these incremental costs will be included in final pipeline tolls, subject to certain conditions,” Poirier said.

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LNG Canada’s Zebedee said the company was in “ongoing discussions” with TC Energy over the costs related to Coastal GasLink and said higher pipeline tolls would only be acceptable if higher costs were incurred prudently.

Higher pipeline tolls would affect economics of shipping gas from Canada to Asia, and would likely be resisted by LNG Canada’s joint-venture partners, which includes Shell Canada Ltd., Malaysia’s Petroliam Berhad Nasional (Petronas), PetroChina Canada, Mitsubishi Canada Ltd. and Korea Gas Corp. (Kogas).

In addition to disagreements over timelines and costs for the pipeline, the export project in Kitimat has faced similar pressures as a result of COVID-19, which has limited work at the project site.

“Have we seen pressures, yep, absolutely,” Zebedee said of how COVID-19 has affected the timeline and budget for the mega project. He said the costs for the project are “within range” of the company’s cost target and LNG Canada still expects to be shipping gas from Kitimat to Asia by the “middle of the decade.”

That timeline could coincide with a boom period for the energy source with LNG demand expected to outstrip supply.

Royal Dutch Shell Plc. released its annual LNG outlook report on Feb. 25, which forecasts LNG demand to almost double from 360 million tonnes in 2020 to over 700 million tonnes by 2040, driven primarily by increasing gas demand in Asian countries.

“As demand grows, a supply-demand gas is expected to open in the middle of the current decade with less new production coming on-stream than previously projected,” the outlook states.

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Shell noted that LNG proponents were expected to approve projects capable of delivering 60 million tonnes of LNG in 2020. But given market volatility last year, significantly fewer projects have started to date with a combined capacity of producing only three million tonnes per year.

Similarly, the Doha, Qatar-based Gas Exporting Countries Forum, a group of LNG exporting nations, released a market outlook last month predicting that global natural gas demand will increase by 50 per cent to reach 5.9 billion cubic meters per day, or roughly 209 billion cubic feet per day, by 2050.

The LNG Canada project is being built in two phases, each capable of producing 14 million tonnes of LNG for export. The second phase has yet to be approved for construction by the joint-venture partners and Zebedee said the company doesn’t have a timeline for when a final investment decision would be made.

“Phase 2 remains a key part of LNG Canada’s future,” Zebedee said, noting that some costs have been mitigated in the first phase due in part to the fact that the export terminal is the only LNG project currently under construction in Canada.

Other LNG projects on the West Coast have been delayed in recent years or cancelled altogether.

The smaller Woodfibre LNG export project in Squamish, B.C. is targeting a final investment decision for the project this year, spokesperson Rebecca Scott said in an email.

Financial Post

• Email: gmorgan@nationalpost.com | Twitter:

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

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PM Modi praises ‘Nayak Sir’ from Odisha for training armed forces aspirants free of cost

PM Modi praises ‘Nayak Sir’ from Odisha for training armed forces aspirants free of cost


In his monthly radio address ‘Mann ki Baat’, PM Narendra Modi on Sunday was full of praise for Silu Nayak, a 28-year-old from Odisha’s Jagatsinhpur district. Known as ‘Nayak Sir’, Silu Nayak imparts free of cost training to youngsters who wish to join the security forces.

Silu Nayak himself had appeared for the written examination and interview for the recruitment of Odisha Industrial Security Force (OISF), an arm of the Odisha Police in 2016. However, with no history of physical training, he backed out during the physical evaluation, feeling that he would not be able to qualify for the rigorous tests.

After he saw hundreds of other aspirants failing to clear the physical evaluation, Nayak took a pledge to train aspirants for the armed forces, both physically and mentally. He also decided not to charge a fee for his services.

Nayak Sir is man on a mission: PM Modi

Referring to him as ‘Nayak Sir’ of Arakhuda village, Prime Minister Modi said, “In reality, he is a man on a mission, he provides free training to youths from his village and nearby areas for the physical and written tests.”

“The name of the organization of Nayak Sir is Mahaguru Battalion. The training touches upon all the aspects from physical fitness to interviews and writing to training. You will be surprised to know that the people this organization has trained have secured their places in uniformed forces such as the Army, Navy, Air Force, CRPF and BSF,” said PM Narendra Modi during the 74th edition of his radio address Mann ki Baat.

The Prime Minister went on to add, “By the way, you will also be amazed to know that Silu Nayak Ji himself tried to get recruited in Odisha Police but could not succeed. Despite this, on the basis of his own training, he has made many youths worthy of national service. Come, let us all wish Nayak Sir greater success for preparing more heroes for our country.”

Feeling more energetic after PM’s words, says ‘Nayak Sir’

Silu Nayak, who holds classes for youngsters near Devi riverbank has trained 300 people so far, 70 of whom have been recruited by the armed forces. Out of them, 18 joined the Indian Army, three joined the Indian Air Force, six were recruited by the Indian Navy and four each by CRPF and BSF.

Youngsters being trained by Silu Nayak in Odisha (Photo Credits: Md Suffian/India Today)

Others who were trained by ‘Nayak Sir’ have also managed to find employment with various private security agencies.

Nayak himself wanted to join the Indian Army after graduation.

“I am feeling honoured after receiving praise and recognition from PM Modi for my contribution to society. The PM’s accolades come with immense responsibility; our mission has become stronger now. We are feeling more energetic now,” Silu Nayak told India Today.





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Loss of soft play area in Voe could cost jobs

Loss of soft play area in Voe could cost jobs


Ten jobs could be lost if a planned soft play area for the North Mainland does not go ahead.

The organisation behind project in Voe has appealed to Shetland Recreational Trust to reconsider its plans to develop a similar attraction at the Clickimin Leisure Centre.

A director behind the proposal planned for the old Olnafirth Primary School has written to the trust, insisting the jobs could be lost.

Sarah Manson has taken issue with claims by the SRT that a feeler survey had been put out on the Clickimin proposals before the Olnafirth plans were public.

“We would like to clarify that we see the SRT survey went out on 7th October – five days after our soft play equipment arrived in Shetland and we announced on social media our plans for the school.

“Our official Facebook page was created on the 12/10/20 – the day after our planning application was submitted.

“The Voe Centre Ltd was set up in March 2016 after our offer was accepted for the Old Voe school premises.

“It then took 18 months for the sale to go through due to delays with council paperwork.”

The letter comes after bowlers planned to fight back against to build a soft play area in the Clickimin.

It has been circulated to Shetland Islands Council as well as community councils in Lerwick and Delting.

“We hope you will reconsider your plans in light of this information, as continuing will result in the failure of our business and the loss of at least 10 much needed full and part time jobs we intend to create in the North Mainland.”

Trust chief executive Steven Laidlaw previously said he had sought a meeting with bowlers to help him understand more about concerns.





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Warren Buffett Admits Mistake That Cost Berkshire Hathaway $11 Billion

Warren Buffett Admits Mistake That Cost Berkshire Hathaway $11 Billion



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One of the richest people in the world, Berkshire Hathaway CEO Warren Buffett is placed seventh in line on Bloomberg’s Billionaires Index. He publishes a message to shareholders that he has been writing annually since 1965.

The CEO of Berkshire Hathaway, 90-year-old Warren Buffet stated on Saturday in his annual address to shareholders that his mistake to purchase the Precision Castparts cost his investment fund some $11 billion.

Precision Castparts is an Oregon-based company that manufactures parts for the aerospace industry. The tycoon admitted that he overpaid for the company shares to the value of $37 billion in 2016.

Buffett noted that he “made a mistake” by “paying too much for the company” as he was “too optimistic” about the growth of its profits. As the entrepreneur stressed, his miscalculation became obvious amid the significant decline affecting the entire aviation industry.

“PCC is far from my first error of that sort,” Buffett wrote. “But it’s a big one.”

At the same time, Buffett noted that in spite of the aerospace sector downturn, Precision Castparts remains “the best in its business,” adding that he still believes the manufacturer will eventually “earn good returns.”

According to recent estimates at the end of 2020, Berkshire Hathaway’s revenues amounted to about $42.5 billion. Buffet noted that the holding had very successful investments in Apple.

Buffett is the seventh-richest person in the world, according to the latest data from Bloomberg. His fortune is estimated at $92.7 billion. Berkshire Hathaway owns large stakes in dozens of companies. Among them are leading American banks and equipment manufacturers.





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Cutting The Cost Of Energy Bills For Struggling Victorians


The Andrews Labor Government is reducing the cost of energy for Victorians doing it tough, with a one-off $250 payment to help with their energy bills.

Minister for Energy, Environment and Climate Change Lily D’Ambrosio announced today that low income households can now apply for the new Power Saving Bonus.

The bonus is available to any households with a Victorian electricity account who holds a pensioner concession card or receives JobSeeker, Austudy, Abstudy or Youth Allowance. It will be available for 12 months and provide immediate financial relief to more than 900,000 Victorian households.

The $250 bonus will be transferred electronically into the bank account of the recipient or provided via cheque on request, and processing will take approximately two to three weeks from application.

Electricity bills are the top cost of living issue for consumers and about 20 per cent of Victorian households requested financial assistance with their energy bills last year due to the impacts of coronavirus.

To ensure the bonus is accessible to those who need it most, including those from marginalised communities and families from culturally and linguistically diverse backgrounds, the Government has enlisted the support of the Brotherhood of St. Laurence and the Consumer Policy Research Centre.

The Victorian Energy Compare website is designed to help consumers take charge of their energy costs by finding the best energy deal available. Seven out of ten people save money by using the website, with typical annual household savings of $330 on energy bills in the first year alone.

The Power Saving Bonus is part of an unprecedented $797 million household energy affordability package that was announced in the recent State Budget.

The bonus is available through the Victorian Energy Compare website – compare.energy.vic.gov.au – or by calling 1800 000 832.

Quotes attributable to Minister for Energy, Environment and Climate Change Lily D’Ambrosio

“This one of payment will provide immediate financial relief for those struggling to pay their power bills.”

“It’s part of the ongoing support we’re providing to Victorian households as we rebuild from the pandemic – as well as helping more families put solar on their homes to reduce their power bills and save money.

“The coronavirus pandemic and spending more time at home has meant that many people have had higher power bills. This $250 bonus will help take the pressure off household bills for those doing it tough.” 





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Federal auditor admits errors in calculation of airport cost

Federal auditor admits errors in calculation of airport cost


The Federal Auditor’s Office (ASF) has admitted that there were errors in its calculation of the cost to cancel the previous government’s Mexico City airport project.

The ASF said Saturday that canceling the partially built project at Texcoco, México state, would cost almost 332 billion pesos (US $16.1 billion), an estimate more than three times higher than that of the federal government.

President López Obrador, who took the decision to cancel the project after a legally questionable public consultation in 2018, rejected the ASF’s estimate on Monday, saying that the figure was “wrong” and “exaggerated” and that he had “other information.”

He also called on the auditor’s office to explain how it reached its figure.

In a statement issued later on Monday, the ASF said there were “inconsistencies” in its calculation and that its content is undergoing “exhaustive revision.”

“Up until now it has been detected that said amount [the estimated cancellation cost] is less than initially estimated due to a methodological deficiency,” it said.

The calculation currently under revision “considers past and future flows [of money] to carry out the cancellation of the contracted obligations,” the ASF said. That movement of money “doesn’t represent a cost but it does represent an outflow,” it said.

The ASF also said there were miscalculations with regard to costs associated with liquidating airport bonds. It said that the final result of the revision will be announced when it has been completed.

The Ministry of Communications and Transportation estimated in a 2019 document that the canceation of the US $15-billion airport would cost 100 billion pesos (US $4.8 billion).

López Obrador has said that scrapping the project in favor of converting the Santa Lucía Air Force base into a commercial airport will save the government about 130 billion pesos.

According to the government, the total cost of the new airport– whose first stage, a new military base, was inaugurated earlier this month – is projected to be 75 billion pesos (US $3.7 billion), or 230 billion pesos less than what the former administration’s airport would have cost.

The estimated 130-billion-peso saving includes a cost of 100 billion pesos to cancel the Texcoco project.

“It was a great decision we took, a wise decision,” López Obrador said at the military base inauguration, referring to scrapping the project, which was about one-third complete when it was abandoned.

The president long argued that the previous government’s flagship infrastructure project was corrupt, too expensive and geologically unsound. His alternative, the Santa Lucía airport, is slated to open in March 2022.

Source: EFE (sp)  





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Initial vaccine cost estimate was more than €50 – POLITICO

Initial vaccine cost estimate was more than €50 – POLITICO



BioNTech co-founder Uğur Şahin confirmed that the German company’s first price estimate for the mRNA vaccine was priced at €54 per dose.

Şahin also said that the company offered the EU 500 million doses initially of the mRNA vaccine — a claim repeatedly denied by Commission officials.

In an interview on Saturday with Bild, Şahin said this was merely a first estimate made in mid-June: “At the time, we simply didn’t know how exactly the production could be scaled,” he said. It was unclear how much “the production processes and costs will be exactly.”

The initial cost estimate was first reported by the Süddeutsche Zeitung on Thursday.

Eventually, BioNTech and Pfizer figured out how reduce costs and build up their manufacturing scale, and made a new offer weeks later between €15 and €30 depending on the number of doses purchased.

The U.S. signed a deal for €19.50 per dose on July 22, after which “all industrialized countries then received this price model,” Şahin said.

The EU ultimately signed a deal for approximately €15 per dose, according to three EU diplomats. EU countries paid €12 for their initial order of 300 million doses after the Commission gave the company a down payment, according to a leaked price list in December.

The company also confirmed to Bild that it would supply 28 million doses to the EU by the end of February, following reports that BioNTech/Pfizer was 10 million doses short.





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High operation cost making KTC services unviable

High operation cost making KTC services unviable


View of enquiry counter at the KTC bus stand in Panaji.


ABDUL WAHAB KHAN
& SHOMA PATNAIK

Panaji

Although the Kadamba Transport Corporation Limited (KTCL) is in the process of adding electric buses to its fleet to revitalise itself, the Corporation will need more than the electric push to remain on course in the coming years.

Information gathered reveals that loss-making services, low fares and high cost of operations will continue to make KTCL unviable in the coming years.

For instance, KTCL’s school bus service is of big help to school students but a big drain on the already cash-strapped finances. The service makes more losses than profits on the 86 school buses plying 172 trips per day.

The state’s directorate of education pays KTCL per bus Rs three lakh each year for the bus service, while from private schools, the Corporation charges bus fees from the students albeit through monthly concessional pass scheme.

The KTCL incurs expenditure ranging between Rs 10,000 and Rs 56,000 on school buses operating on different routes, while the revenue generation is negative or very little on most routes. An analysis reveals that as many as 24 schools are not helping in earning any revenue. Instead, they generate losses ranging from three per cent to 30 per cent, while the remaining routes provide nominal revenue between Rs 40 and Rs 1,700.

“We operated school buses when schools resumed during pandemic time without receiving any payment, which was most required during such challenging times. The outstanding amount from the directorate of education is Rs 1.68 crore. We had to ply school buses even with two to three passengers when the schools partially resumed. The amount charged from school administration is used to pay the bus operation.  Apart from that, the Corporation also has to take care of its own establishment’s maintenance like paying the staff and others,” pointed out Derrick Perreira Neto, managing director of KTCL.

Similarly, the Corporation’s parcel service also ran into losses during the pandemic and had to be discontinued.

The KTCL’s fares were last raised on June 1, 2019, after a gap of six years. The previous fare hike was on March 28, 2013. The Corporation depends on the government for the fare revision and cannot take its own decision on the matter.

“Diesel rates have risen in the recent months, but we cannot raise the fare because people shout. Even the airport service that we are providing needs a fare hike, but we cannot raise the ticket price on the routes,” complained Carlos Almeida, chairman of KTCL, who added that against the backdrop of stagnant fares, the management has to deal with increasing

maintenance cost, outgo on salaries and other expenditure. 

The cost per kilometre (CPKM) and earnings per kilometre (EPKM) are two yardsticks to assess performance. The trend in the parameters reveals that CPKM is growing at a faster pace than EPKM, which means losses are being incurred as the buses are plying. Interestingly, the EPKM registered a strong increase in 2019-20, which was the year of the fare hike, while it showed a sluggish growth in the previous years.

KTCL’s annual expenditure is primarily on salaries (54 per cent in 2018-19) and operating expenses (38 per cent). Cutting down on salary expenditure is difficult, as a chunk of it comprises salaries of drivers.

With KTCL’s consistent losses caused by expenditure outpacing the earnings, the future looks bleak for the financial health of the Corporation.

“The future looks bleak, but we are providing service to people. That itself is important. During the lockdown, we transported people from all over to Goa. During pandemic, we were the first to operate,” said Almeida. He said KTCL can increase its income by making profits on land. “We can balance our losses from transport of passengers through rent from shops. All our bus depots are at prime locations. We have asked the government to modernise the Margao, Vasco, Panaji depots to earn from them,” said the chairman.

He said even on the electric buses procured under the FAME scheme, the Corporation will have to pay for the day-to-day operations of the buses once they start running and on creating infrastructure for the e-buses. 



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