March 2008 Issue

doing business

EPCOR Announces New Office Tower

Freelance Writer

A new report on carbon capture and storage says the programs it proposes could result in emission reductions of some five million tonnes of carbon dioxide a year — the equivalent of taking 1.5 million Canadian cars off the road.

Natural Resources Canada and Alberta Energy released the final report of the Canada–Alberta ecoENERGY Carbon Capture and Storage Task Force. The report, Canada’s Fossil Energy Future: The Way Forward on Carbon Capture and Storage, recommends incorporating carbon capture and storage into Canada’s clean-air regulations, allocating new funding to projects through a competitive process, and targeting research efforts to lower the cost of this technology.

TransAlta Corp. President Steve Snyder, P.Eng., who headed the task force, suggested that industry would be prepared to contribute $2 billion to $4 billion toward waste-gas cleanup equipment, pipelines and disposal sites — if governments are willing to come up with $2 billion in assistance.
The report was followed by news that 19 energy-industry participants will participate in the Alberta Saline Aquifer Project. A first in Canada, ASAP aims at long-term storage of carbon dioxide in deep saline aquifers.

Phase 1 of ASAP will identify suitable locations for such long-term sequestration and is expected to be completed by the end of 2008. Phase 2 will involve a pilot project with sequestration sites designed to receive injected carbon dioxide.

Phoenix Acquisition Fills GENIVAR’s Sails
GENIVAR Income Fund has acquired Phoenix Engineering Inc. of Calgary to place itself among Canada’s largest wind-power consulting companies.

Phoenix has more than 20 years’ experience in wind-resource monitoring and assessment, and wind-farm design. The firm provides consulting services to owners and lenders who collectively operate more than 80 per cent of the installed wind-power capacity in Western Canada and nearly 40 per cent Canada wide.

GENIVAR is one of Canada’s largest engineering services companies with 2,400 employees in 45 offices in Canada and abroad. It provides private- and public-sector clients with a full range of consulting services, including those for the building, industrial, power, urban infrastructure, transportation and environmental sectors.

Transtech Engineering Joins Focus Corp.
Calgary-based Transtech Engineering, an employee-owned consulting firm that specializes in the planning and design of transportation facilities, has become part of Focus Corp.

Recent Transtech projects include work on the Calgary ring road system, the QE II Highway between Leduc and Edmonton, the TransCanada Highway near Vancouver and the Calgary west light rail expansion.

Focus is a multi-disciplinary consulting firm providing engineering, geomatics, planning and project-management services to clients involved in oil and gas, oilsands, land development, transportation and municipal infrastructure projects. It has more than 1,400 employees in 20 offices throughout Western Canada.

Stantec Adds Space in Edmonton
Stantec has acquired 51,000 square feet of additional space in downtown Edmonton. Between 300 and 400 employees will be located on three floors formerly occupied by a health club next to the Bell Tower on 103rd Avenue. Stantec will retain its head office in the Stantec Centre on 112th Street, which now houses about 1,200 employees.

The company has also announced that it has acquired SECOR International Inc., a 700-employee, 40-office environmental engineering firm from Redmond, Wash.

Ohio-Based Company Opens Edmonton Office
The Equity Engineering Group, Inc., a 70-person firm headquartered in Shaker Heights, Ohio, has opened a branch office in Edmonton. Equity develops fixed equipment engineering standards and advanced technologies that help keep oil refining and petrochemical plants safe and operating at top capacity.

New Schools Likely to Be Built Using P3 Model
The Alberta Government is proceeding with the planning and construction of 14 new schools in Calgary, Edmonton, Okotoks, Langdon, Spruce Grove and Sherwood Park. Again, the public-private partnership model is being used.

The province will follow a planning process similar to that used for the first set of Alberta P3 school projects. For those, the government recently announced short-list bidders. By July, the successful bidder will be selected.

The government will allocate an additional $190 million for 20 school infrastructure projects, including upgrading and modernization. This brings the government’s total investment for school modernization and maintenance to more than $610 million for 2007-08.

Province Announces Long-Term Plan for Capital Spending
Premier Ed Stelmach — in the run-up to calling the Alberta election — announced a 20-year, long-term provincial capital plan. The province intends to spend about $6 billion a year on roads, schools and hospitals, as well as cultural, recreational and other infrastructure.

Suncor Spending $20.6 Billion On Voyageur Expansion
Suncor Energy Inc. has approved $20.6 billion in investment to boost production at its Fort McMurray oilsands operation by 200,000 barrels per day. Suncor calls the Voyageur expansion a key step in achieving its long-term goal of increasing crude oil production capacity to 550,000 bbl/d in 2012.

An investment of about $9 billion is focused on bitumen supply. About $11.6 billion will go to construction of an upgrader designed to process 245,000 bbl/d of bitumen into 200,000 bbl/d of crude.
At peak construction in 2009 to 2010, the expansion is expected to employ about 7,800 people. On completion, the expansion is expected to create about 800 new permanent jobs.

The expansion plan came shortly after Suncor announced it had reached an agreement with the Government of Alberta to increase company royalties by up to 20 per cent starting in 2010. It terminates an earlier royalty pact with Suncor scheduled to run until 2016.

ConocoPhillips Obtains Half Interest in Keystone
ConocoPhillips has acquired 50 per cent of Keystone Oil Pipeline from TransCanada Corp., the top end of what an earlier memorandum of understanding gave it the right to acquire. The MOU also committed ConocoPhillips to ship crude oil on the pipeline.

TransCanada affiliates will construct and operate the 3,456-kilometre Keystone Pipeline, which will be capable of delivering 590,000 bbl/d of crude from Hardisty, Alta., to U.S. Midwest markets at Wood River and Patoka, Ill., and to Cushing, Okla. Initial deliveries to Patoka are expected to begin in late 2009.

Keystone has secured long-term contracts of 495,000 bbl/d with an average duration of 18 years.

Upgraders Present Vast Opportunities
If Alberta-based suppliers can out-manoeuvre competition from outside the province’s borders, they could capture a sizeable slice of sales and service contracts related to the Edmonton-area’s upgrading boom.

So says a recent report jointly sponsored by Alberta Employment, Immigration and Industry, and the Edmonton Economic Development Corp.

Upgraders planned or under construction could require up to $5.6 billion worth of pumps and compressors, says the Greater Edmonton Area Bitumen Upgrader Supply Chain Report. Another $1 billion worth of metal valves could be needed, along with annual maintenance support valued at $658 million.

The report, prepared by QGI Consulting, cautions: “The challenge for Alberta companies will be to remain cost competitive with foreign suppliers in the face of rising costs for labour, energy and materials due to the strong domestic economy and Canada’s very strong currency.”

Horizon Price Creeps Up
High labour costs and this winter’s cold weather have combined to push the cost of Canadian Natural Resources Ltd.’s Horizon oilsands project almost $2 billion over the budgeted $6.8 billion. The facility will produce 100,000 bbl/d when it goes into production later this year.

Even with the increased cost, Horizon’s price tag of $80,000 per flowing barrel comes considerably below comparable projects, according to CNRL President Steve Laut, P.Eng.

EPCOR Builds Wind Portfolio
An EPCOR Utilities Inc. subsidiary, Power Development (British Columbia) Ltd. Partnership, has launched an environmental assessment process for the 100-to-200 MW Quality Wind Project, northeast of Tumbler Ridge, B.C.

Quality, which is being assessed under B.C.’s Environmental Assessment Act, was initiated by Chinook Power Corp. It will stay on as a consultant.

In addition to its existing generating facilities, EPCOR currently operates the 40-MW Kingsbridge Wind Power Project in Ontario.

Mont.-Alta. Power Line Gets Conditional Approval
Subject to conditions, the Alberta Energy and Utilities Board has approved Montana Alberta Tie Ltd.’s application to construct and operate a 230-kilovolt power line to import and export electricity between Lethbridge and Great Falls.

In April 2007, the National Energy Board issued the company a federal permit to construct and operate the 130-kilometre Canadian portion of the proposed line.

The EUB held a public hearing in the fall of 2007 to hear evidence from affected landowners and others. It has directed that the power line company conduct further discussions on specific impacts on individual landowners. The company must report to the EUB by April 30 and the board will not issue a permit until satisfied that it meets this requirement.

(The EUB retains full authority to issue decisions and permits for proceedings initiated under its jurisdiction in 2007. Once approval is issued, the continuing regulation of the project will be the responsibility of the new Alberta Utilities Commission, which began operation Jan. 1, 2008.)

Oilsands Quest Expands Land Position in Alberta
Oilsands Quest Inc. has paid $10 million at recent provincial land sales to acquire two Alberta oilsands exploration permits near the junior oil company’s Saskatchewan lands. Each permit covers about 18,432 hectares near the company’s Axe Lake discovery in Saskatchewan.

Tolko Industries Closes in High Prairie
Tolko Industries Ltd. has closed its oriented strand board mill at High Prairie — indefinitely, this time — due to poor business conditions. These include the U.S. housing slowdown, a strong Canadian currency and higher operating costs.

A temporary shutdown was announced in December at Tolko’s High Prairie division, which employed 119 through the mill and related woodlands.

Tolko is a private, Canadian-owned forest company based in Vernon.

Talisman Energy Inc. Buys RSX Energy Inc.
Talisman Energy Inc. is buying junior energy firm RSX Energy Inc. for $106 million. RSX is active in northwest Alberta, producing 1,566 barrels-of-oil equivalent a day.



About CN and Shortline Railways
CN Rail Re-acquires Alberta
Shortlines, Doing Business, March 2006 PEGG Online

About Athabasca Northern Railway
Shortline Railway Offers Opportunities and Solutions, by Tim Green, P.Eng.,
October 2003 PEGG Online.