Winnipeg Free Press

Winnipeg Free Press (Newspaper) - May 9, 2024, Winnipeg, Manitoba Read online at: winnipegfreepress.com/fp-features Available at Manitoba Liquor Marts - while supplies last! SPRING 2024 ISSUE OF DON’T MISS THE PICK UP YOUR COPY TODAY! B8 ● WINNIPEGFREEPRESS.COM BUSINESS THURSDAY, MAY 9, 2024 ATCO subsidiary to build new Alberta natural gas pipeline CALGARY — Canadian Utilities Ltd., a subsidiary of Calgary-based holding company ATCO Ltd., plans to build a new, $2-billion natural gas pipeline in Alberta that will supply a massive net-zero petrochemical project being built northeast of Edmonton. The project will be the largest energy infrastructure project by an ATCO Energy Systems company, chief oper- ating officer Wayne Stensby said in an interview. Stensby said the pipeline will supply natural gas to Dow Chemical’s $9-bil- lion Path2Zero facility, which is being built near Fort Saskatchewan, Alta., and is billed as the world’s first net-ze- ro-emissions integrated ethylene crack- er and derivatives site. The Dow project was given the go- ahead in November 2023 and involves an expansion and retrofit of Dow’s ex- isting manufacturing site in Fort Sas- katchewan. The project will include the building of a new hydrogen-fuelled ethylene cracker, as well as carbon cap- ture and off-site sequestration. But Dow won’t be the only user of the new natural gas pipeline, Stensby said. He said Canadian Utilities has identi- fied more than $20 billion of proposed industrial expansion projects and emis- sions-reduction projects by its custom- ers in Alberta. “We shouldn’t be understating the significance of those investments, whether it be Dow or whether we’re talking about hydrogen, building ma- terials, or petrochemical investments,” Stensby said. “Very large companies are making very large investments as they look to lower the carbon footprint of their manufacturing processes and manufacturing businesses.” Stensby added economic growth is also a key driver of demand in Alberta. “And some of this gas will eventually find its way to residential homeowners, because we’re also seeing increased levels of population growth — really record growth — across our province.” The new pipeline, called Yellowhead Mainline, will be around 200 kilometres long and will run from the hamlet of Peers in west-central Alberta to the northeast Edmonton area. Construction is expected to begin in 2026. — The Canadian Press AMANDA STEPHENSON Spin Master gets boost from Melissa & Doug deal TORONTO — Spin Master Corp. says it continues to face challenges from in- flation, higher interest rates and a slow- down in consumer spending, including on toys, that it predicts will remain through least the end of the year. The Toronto-based company, whose toy and entertainment brands include Paw Patrol, Bakugan and Hatchimals, has reduced the average prices of its toys by nine per cent for 2024, the CEO said on the call. “With rising prices and basics like shelter, food and energy, consumers are feeling the pinch,” Max Rangel, presi- dent and CEO, told analysts on a confer- ence call Wednesday. “We expect this environment will continue throughout 2024 as consum- ers manage through the impact of high interest rates and inflation,” he added. The comments came as Spin Mas- ter reported a loss of US$54.8 million in the first quarter, compared with a loss of US$1.9 million a year earlier. Its revenues totalled US$316.2 million, up from US$271.4 million during the same quarter last year. The acquisition of toy company Mel- issa & Doug, which closed Jan. 2, added US$40.4 million to Spin Master’s rev- enue during the quarter. The US$950-million purchase of the Wilton, Conn.-based company known for its wooden and sustainable toys, adds more nostalgic offerings for pre- schoolers to Spin Master’s roster. Chief financial officer Mark Segal said in a release toy gross product sales excluding the acquisition’s impact were in line with a year earlier, during what’s normally the lowest quarter for the toy industry. “Spin Master has always been a seasonal business, and with Melissa & Doug, even more so,” Segal told ana- lysts on a call. Melissa & Doug is heavily weight- ed toward the second half of the year, bringing 80 per cent of the total rev- enue, especially from the sales during the fourth quarter, he added. Meanwhile, Spin Master has a series of new releases lined up for the fall as the company marks 30 years in busi- ness, Rangel said. “The retail group has reacted incredibly positive to our to our lineup,” he added. — The Canadian Press RITIKA DUBEY Suncor leasing oil tanker ships to carry crude from Trans Mountain C ALGARY — Suncor Energy Inc. says it is leasing and operating a number of Aframax oil tanker ships to carry crude from the recent- ly completed Trans Mountain pipe- line expansion to Pacific markets. By leasing and operating the tankers itself, Suncor saves on shipping costs, said Dave Oldreive, the company’s executive vice-president responsible for refining, sales and marketing. “We’re well-positioned to deliver volumes to our customers and remove that middleman and capture the full value for Suncor,” Oldrieve said on a conference call with analysts Wed- nesday, during which executives dis- cussed the company’s first-quarter financial results. The Trans Mountain pipeline ex- pansion, which runs from Alberta to the B.C. coast and marked its official opening last week, gives Canadian oil shippers access to an additional 590,000 barrels-per-day of pipeline capacity. The expanded pipeline will “clearly increase” the profitability of Suncor’s oilsands production, Oldreive said, by reducing the discount Canadian oil shippers have historically received for their product in part due to a lack of export capacity. It also enables future production growth, both for Suncor and the oil- sands sector as a whole, he added. “We’ve been waiting for this for some period of time, and we’re excit- ed to start shipping on the pipeline. It’s good for our industry, it’s good for Suncor,” Oldreive said. According to numbers provided by the Canada Energy Regulator, the Trans Mountain pipeline expansion is expected to boost total western Canadian crude oil export capacity by 13 per cent once fully in service. (While officially open, the pipeline is still filling with crude, and the first tanker ship is not expected to load from the new line for export until the middle of the month.) Overall, the capacity of the Trans Mountain expansion will represent 17 per cent of the total pipeline ex- port capacity available to Canadian crude oil shippers, according to the Canada Energy Regulator. Oldrieve said on Wednesday’s call Suncor expects the crude oil loaded off the Trans Mountain pipeline onto tanker ships at the Westridge Marine Terminal in Burnaby, B.C., will be delivered primarily into California as well as Asian markets. He said Suncor’s trading offices in Calgary, Houston and London, Eng- land have been working to strengthen relationships with customers along the West Coast and in Asia to capital- ize on the opening of the Trans Moun- tain project. “We’ve got a pretty sophisticated trading platform. And what might make us a bit unique is we’re not reli- ant on third-party trading shops,” Oldrieve said. “This allows us to capture the full value of the transaction by trans- acting directly with customers.” Eighty per cent of the Trans Moun- tain pipeline expansion’s capacity is tied to long-term contracts with crude oil shippers, leaving the remaining 20 per cent available for spot shipments on a month-to-month basis. Suncor said in a news release af- ter the close of markets Tuesday it earned $1.61 billion in the first three months of 2024, down from $2.05 bil- lion a year earlier. The company reported record up- stream production of 835,000 barrels per day during the quarter, including all-time high oilsands production of 785,000 barrels per day. Suncor has scheduled a presenta- tion for investors May 21. — The Canadian Press AMANDA STEPHENSON RioCan REIT profits up as retail demand holds TORONTO — Despite Canada’s slow- ing economic growth, demand is prop- ping up the retail leasing market as rents continue to trend upwards, said the chief executive of RioCan Real Es- tate Investment Trust. “It’s a very strong retail market right now, there’s so much demand,” said CEO Jonathan Gitlin in an interview Wednesday. That demand helped lead RioCan to profits of $128.6 million for its first quarter ended March 31, up from $118 million in the same quarter last year. The market is holding up thanks to strong demand from necessity-based retailers like grocers and discount stores, and because there’s been fairly little construction of new retail space over the past decade, Gitlin said. “It’s been sort of net-zero new retail space, or somewhere close to that. And I think that there’s really not going to be any new retail built in the next fair- ly long period of time because it’s very expensive to build.” The constrained supply helped see RioCan already sign new lease agree- ments on six of 10 properties where its tenants, Bad Boy Furniture and rooms + spaces, shut down. However, the unexpected closures did lead to a slip in retail occupancy from 98.4 per cent in the fourth quarter to 97.7 per cent last quarter. Bad Boy Furniture was officially declared bankrupt in January, while rooms + spaces, which was launched by retail sector investor Doug Putman with 24 locations last August, looks to have closed all but two of those loca- tions, according to its website. Gitlin said while there will always be some businesses that suffer in times of economic strain, overall demand was demonstrated by a 14 per cent increase in leasing prices for new and renewed leases. Revenue for the last quarter totalled $303.4 million, up from $279.5 million in the first quarter of 2023. RioCan says its funds from operations for the quarter amounted to 45 cents per diluted unit, up from 44 cents per di- luted unit in the same quarter last year. — The Canadian Press ;