Sunday, November 2, 2008

Upgraders: blast from the past

Lets go back a year and consider the story of upgraders. First from the August 2007 article City's housing market going through a correction, not a crash
Realtors say they wouldn't be surprised if average prices fall by six or seven per cent from their July peak, before levelling off in early 2008. If so, that would take the average single-detached home price down to $388,000.
Roughly a dozen upgraders are slated for the Edmonton region. Thousands of new jobs will be created.
This was a very loaded statement. "Roughly a dozen" was actually nine. The term "upgraders"was applied to a brand new sites, expansions or converting existing plants. The use of "are slated" actually meant some were under construction, some were approved to be build and some had filed applications. So if you were shopping for a house at the time and thought this meant 12 new upgraders in the Edmonton area you were wrong.

Here is another article from the Edmonton sun also from August 2007. Hold off on selling the house.
Even with huge slowdowns, at least half those projects will happen. The bitumen upgraders in Strathcona and Sturgeon counties are just starting. Nine proposed upgraders are listed on that website.
House prices will go nowhere but up.
The list of upgraders can be found here in the Alberta Industrial Heartland section. There has been some recent developments regarding these project and I have done my best to consolidate them in a list.

Shell Scotford Upgrader Expansion 1
under construction*

Shell Scotford Upgrader Expansion 2

Strathcona Refinery
under construction*

Sturgeon County upgrader
"considering deferral of any decision to construct the upgrader."

BA Energy Alberta Heartland Upgrader
construction halted

North West Upgrader
"waiting to further finance"

Synenco Energy Northern Lights Upgrader
From what I can figure out it doesn't look good*

Statoil North American Upgrader
delayed two years

Total Upgrader
delayed two years?

*Total Energy may have bought this, not sure of the status of the project.

The two in this list under construction were started before the above article were written so they do not represent new projects. Any clarification to this list by reader would be welcome .


squidly77 said...

i did say on albertabubbleblog that these proposed phantom upgraders were all public kool-aid
delivered by the msm
all of the new ft mac mines with the exception (so far) of albian will be pumped into the keystone (google) pipeline
bear both esso and petro-can strathcona expansions are complete
only shell remains
here is a message ua 488 sent out recently
With the completion of the Petro Canada construction project, we are seeing the huge amount of outstanding calls we have gotten used to diminish substantially. In order to ensure that Local 488 members have the first opportunity to secure employment in the Edmonton area, all calls for the Shell Scotford and the Modular Yards have been restricted to ‘members only’ until all members have had a chance to register at the hall and review the call-out.
in other words we have no work

the real predictor of future work are the modular yards
no mod-yard work equals no new me i am in the know
at this point the boom is done
(there could be a bit of a royalty play here..but i dont think so)
i am going to paste this on the bubbleblog

squidly77 said...

our mod-yards are dead and
we have no work period

shes all over at this point

Anonymous said...

Ramen recipes for bob and sheldon:

Seriously...Alberta home resale prices will go down yet another 15-20% minimum.
That edmonton SFH that sells for $370K needs to get down to $300K.

5% down payment= $15K that's alot of dough.
Even if it takes a married couple with combined $150K salary, the more you earn=the more you spend still gotta save the dough, right?

My forecast?

1. More listings
2. Will takes 4-5 months to sell.
3. rare offers will come at $35K under asking...
4. No spring rush in 2009.
5. by june 2009, monthly resales at 600-700 per month.
6. average home SFH price for edmonton by June 2009: under $300K (20% less than now and 33% less from the peak)
7. What happens to folks who bought at the peak and now have negative equity? They walk away=more listings and discounted sales!!!!
8.Alberta is busted until 2020.

By 2012 there will be some awesome RE deals to be had in Bustberta.

Anonymous said...

... and I forgot...
Bob and sheldon websites done by summer 2009