Gaz Metro leads opposition to TransCanadas Energy East project

MONTREAL – Pushback is building in Quebec over TransCanada Corp.’s $12-billion, cross-country project to convert a natural gas pipeline to oil, just weeks before the company files its formal proposal with the national energy regulator.Quebec’s largest natural gas distributor, Gaz Metro, plans to enlist the support of the provincial government to oppose the project that it says will lead to supply shortages, higher prices and threaten Quebec’s economic growth.“The project in its current version is problematic as it will impede the possibility for natural gas users to have access to the necessary capacities once the conversion happens,” spokeswoman Marie-Christine Demers said after Gas Metro made its case last week to the province’s energy regulator.She said the company plans to push the government to intervene when the proposal goes before the National Energy Board for approval. Specifically, Gaz Metro said the conversion of the 3,300-kilometre Energy East pipeline between Alberta and Quebec will reduce the supply of natural gas for customers during peak winter months and for economic development.Energy East would be one of the biggest infrastructure projects in Canadian history, crossing six provinces and traversing 4,600 kilometres in total. Roughly two thirds of it would make use of underused natural gas pipe that’s already in the ground, with new pipe being built through Quebec and New Brunswick.The idea is to connect oil sands crude to eastern refineries and to export some of the oil by tanker.TransCanada said the project will remove the 20 per cent excess natural gas capacity on the eastern network that is destined for export to the U.S. northeast, and it has plans to build more lines to meet any increased demand.“We’re taking nothing away from the Canadian domestic demand,” said Karl Johannson, executive vice-president of natural gas pipelines.The Calgary-based company plans to build a parallel Eastern Mainline pipeline that will stretch for a few hundred kilometres in southern Ontario, to carry natural gas to consumers in Quebec and Ontario.“TransCanada has served the natural gas market for over 60 years…If there is growth we will make sure the facilities are there for growth.”But Gaz Metro said the pipeline section between North Bay, in northeastern Ontario, and Ottawa is now fully used by customers at peak winter periods. It also sees reduced capacity driving up costs for consumers, who would also be on the hook to absorb more than $1.5 billion in infrastructure costs to build the parallel pipeline.Ontario’s Union Gas and Enbridge Gas Distribution have also raised similar concerns about the Energy East conversion.Johannson said he understands that local natural gas distributors want to maintain surplus capacity, but that comes with costs both for natural gas customers and the unrealized economic benefits of sending 1.1 million barrels of crude oil per day to refineries in Quebec and New Brunswick.“By not repurposing this capacity, Canadians and Quebecers lose a lot,” he said in an interview.A Deloitte study said the conversion will boost the Canadian GDP by $35-billion over 20 years, add $10-billion in taxes, support 10,000 jobs and help eastern refineries.The developers of a $1.6-billion fertilizer plant in Becancour, Que., said its project — which is one year behind schedule because of its difficulty to lock up natural gas supplies — is at risk unless it can obtain a reliable supply of natural gas.David Tournier, vice-president of legal affairs for IFFCO Canada, says the project’s shareholders are growing impatient by the delays in the regulatory dispute.“Without gas, there can be no plant. Our plant transforms natural gas into fertilizer and we settled in Quebec to have access to that gas at a time where there was no issue.”Tournier said IFFCO isn’t taking a position on the Energy East conversion but is awaiting an NEB decision on a tariff hike TransCanada has sought to provide access through southern Ontario to cheaper U.S. Marcellus shale natural gas.Regulatory approval this year could allow construction of the fertilizer plant to begin in 2015 for a 2018 opening.TransCanada said it has incorporated IFFCO’s natural gas needs into its supply plans and would provide the energy from Western Canada even if the NEB turns down its tariff request.Canadian Press read more

Jana claims two nominees have votes to be elected to Agrium board

AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email NEW YORK, N.Y. – Jana Partners says it looks like it has received enough votes to get two of its five nominees elected to the board of fertilizer giant Agrium Inc. (TSX:AGU) at the company’s annual meeting Tuesday.The New York hedge fund, which has been in a bitter proxy fight with Agrium management for months, said in a statement Monday that it believes both managing partner Barry Rosenstein and another of its nominees, David Bullock, had received enough votes as of the deadline Friday.“While only Agrium knows the vote results for both sides, based on the number of votes received by these nominees and the typical turnout for contested Canadian elections, and leaving aside the potential impact of Agrium’s offer to pay financial advisers and brokers for favourable votes, it appears that both will be elected,” Jana said.However, Jana complained some shareholders who supported its nominees tell of having been contacted after the deadline and being asked to switch their votes.Agrium’s meeting rules permit it to extend the voting deadline without public notice if doing so would help the current board win re-election, Jana said.Jana has previously criticized Agrium for paying brokers and financial advisers 25 cents for each vote their clients cast in favour of existing board directors, between a minimum of $100 and a maximum of $1,500 per shareholder.Agrium quickly issued a brief statement of its own, saying it remained “very confident” it would prevail in the proxy contest and accused Jana of speculation and “spreading misinformation.”The company said Jana had itself been in contact with shareholders over the weekend and urged shareholders to contact Agrium or its proxy solicitors if they had any questions.Jana, which has spent more than $1 billion for a 7.5 per cent stake in Agrium, has made a number of proposals for change at the company.The one that has garnered the most attention has been to break off Agrium’s retail business into a separate company.Jana says it merely wants Agrium to thoroughly and independently review that option, as well as manage capital better, improve governance and cut costs. Agrium contends that a split remains Jana’s primary aim, and has accused it of using “Trojan horse tactics” to break up the company.Rosenstein said Monday that Agrium’s opposition to adding a minority of new voices to the board had been “based on its claim that an overwhelming number of shareholders did not favour such change.”“Now that this has been disproven, it is time to accept that result rather than continuing to fight behind the scenes,” he said.“There is no good reason why the full board cannot work with a small number of new directors, particularly given the many areas of mutual agreement.”Rosenstein and Bullock — previously with UAP, the U.S. farm products retailer Agrium acquired in 2008 — were the two Jana director nominees backed by influential proxy advisory firm ISS.Its recommendation did not, however, include Jana’s three other candidates: former Liberal agriculture minister Lyle Vanclief, ex-Brenntag CEO Stephen Clark and ex-MSC Industrial CEO Mitchell Jacobson.ISS said Jana made a “compelling” case for change.“The gnawing question is not whether the company should spin off its distribution business, but whether a board still loudly repudiating the very changes it has begun to implement, changes which have encouraged many shareholders and analysts, is a board with a burgeoning credibility problem,” ISS said.“Shareholders may well wonder if, once the bright lights of this proxy contest are turned off, the progress will fade as well.”Other proxy advisory firms — Glass, Lewis, Pensions Investment Research Consultants and Egan-Jones — have endorsed Agrium’s existing board.In a recent research note, Scotia Capital analyst Ben Isaacson warned that using Jana’s proxy, even to vote for one or two of its nominees, would be a “mistake.”“In our view, this would inevitably lead to a split and toxic board, where competing visions and infighting destroy shareholder value rather than create it.”So far, four shareholders have said publicly they intend to side with Agrium: Alberta fund manager AIMCo, B.C. fund manager bcIMC, the Canada Pension Plan Investment Board and Letko, Brosseau and Associates. Together, those shareholders account for just a small fraction of Agrium’s stock.Agrium shares rose $1.37, or 1.4 per cent, to $99.11 in mid-day trading on the Toronto Stock Exchange on Monday. Jana claims two nominees have votes to be elected to Agrium board by The Canadian Press Posted Apr 8, 2013 10:10 am MDT read more