April 2006 ISSUE

doing business

New Leases Boost Chevron Oil Sands Holdings


Freelance Writer

Chevron Corp. has expanded its Alberta oil sands presence by securing five leases covering about 75,000 acres and containing an estimated 7.5 billion barrels of oil in place.
Says Chevron Canada President Alex Archila: “This acquisition places Chevron in an excellent position to pursue in-situ oil sands development. It offers the opportunity to build upon our existing thermal and oil sands knowledge and capabilities.”

The new Fort McMurray-area leases are 24 miles southwest of Athabasca Oil Sands Project, which Chevron already is active in with a 20 per cent joint venture participation. The project includes the Muskeg River Mine and the Scotford Upgrader, and produces about 155,000 barrels per day.
The leases have the potential for recovery using steam assisted gravity drainage. Athabasca project partners Shell Canada Ltd. and Western Oil Sands each will have the right to acquire a 20 per cent interest in the new leases.

WorleyParsons Expands Presence
The Australian engineering firm WorleyParsons, with a staff of 13,000 and 70 offices in 30 countries, has made two recent Canadian acquisitions.

In one of the deals, the firm has purchased Komex International Ltd., a full-service environmental consulting and engineering company established in 1977. Komex will now operate under the name WorleyParsons Komex.

WorleyParsons also has obtained a 100-per-cent stake in MEG Worley, formerly MacDonalds Engineering, in Calgary. The firm will be known as WorleyParsons MEG.

Through these Canadian acquisitions, WorleyParsons will be active in Canadian hydrocarbon, power, infrastructure and mining.

Stantec Acquires Consulting Firms In Canada and U.S.
Stantec has acquired the Toronto electrical consulting firm Carinci Burt Rogers Engineering Inc. and the multi-disciplinary design firm Dufresne-Henry, headquartered in North Springfield, Vt.

With a 20-member staff, Carinci Burt Rogers has illumination experience across all project categories, including commercial, industrial, institutional, residential and recreational. The firm’s high-profile projects include work on the Ontario Association of Architects headquarters in North York, and, in Toronto, the Art Gallery of Ontario and the Hockey Hall of Fame.

Dufresne-Henry has over 275 employees and 16 offices located in the northeastern U.S. and Florida. It offers professional services in engineering, planning, environmental science and landscape architecture. The firm focuses on public sector projects in the environment and transportation markets.
Meanwhile, Edmonton-based Stantec reported its 52nd consecutive profitable year. With revenues of $618 million, 2005 net income rose 34.6 per cent to $40.6 million from $30.2 million the previous year.

Bird Construction Building Fort Mac Treatment Plant
The Regional Municipality of Wood Buffalo has awarded a contract to build a $135-million water treatment plant in Fort McMurray to Bird Construction Co. Ltd. Work on the new facility, which will future expansion capacity to serve a population of 133,000, is scheduled to begin shortly and be completed in 2009.

Penn West Steps Up Pilot Project
Penn West Energy Trust will increase to 5,000 bb/d production at its Seal oil sands pilot project in northwestern Alberta.

In announcing the five-fold increase in output, Penn West President and CEO Bill Andrew, P.Eng., said: “We believe this area has the potential to add millions of barrels of reserves and very strong production additions.”

Penn West holds 800 square kilometres of leases in the Peace River oil sands region. Initially the Seal property can produce using conventional production and drilling methods.

Spar Enters Joint Venture With ITT Electronic
Spar Aerospace Ltd. of Edmonton is working with the electronic systems division of ITT in Clifton, N.J., to develop electronic warfare systems for Hercules C-130 aircraft. The systems involve advance threat warning, situational awareness and electronic countermeasures. The upgrades recognize that C-130s increasingly operate in hostile areas.

Committee Bay Wraps Up Australian Deal
Committee Bay Resources Ltd. now has gold assets in Western Australia. With Redemption Joint Venture partner Focus Minerals Ltd, Committee has made the final cash payments to Leviathan Resources Ltd. to complete the joint acquisition of the Coolgardie gold assets.

The $2.8-million deal, which also includes five million Focus shares, entails rights to 210 square kilometres within Australia’s main gold and nickel region, as well as a non-operating processing plant.
A news release from Committee Bay Resources President John Williamson, P.Geol., notes that the company now controls major greenstone belts in Nunavut and Western Australia.

Province seeks P3 Partners For Calgary Ring Road
Taking a page from the Edmonton southeast ring road, the Alberta Government is seeking a public-private partnership to build the northeast leg of Calgary’s ring road. The successful bidders will be responsible for the project’s design, construction and financing, as well as operation for 30 years.
Final contract award is expected by early 2007, and construction could begin in spring 2007 and be completed in fall 2009.

TransCanada To Operate Northern Border Line
As part of several related transactions, TransCanada Corp. will become the operator of the Northern Border Pipeline in early 2007.

Northern Border owns a 2,010-kilometre pipeline system that transports natural gas from the Montana-Saskatchewan border, where it connects with TransCanada’s Foothills System, to interconnecting pipelines in the upper U.S. Midwest.

In connection with the deal, TransCanada is selling its 17.5 per cent interest in Northern Border Partners, L.P., to a subsidiary of ONEOK Inc. for $30 million US.

“With capacity of 2.4 billion cubic feet per day, Northern Border is the largest natural gas pipeline connecting the Alberta Hub with growing markets in the U.S. Midwest. In 2005 more than 20 per cent of the total amount of natural gas exported from Canada to the United States was shipped on Northern Border,” said TransCanada CEO Hal Kvisle, P.Eng. He added that, with more than a third of the northern Alberta-Chicago route forming part of TransCanada’s existing system, the new arrangement makes sense.

Work to Proceed On Hwy 63 Twinning
Work will begin on twinning the 240 kilometres of Highway 63 between Fort McMurray and the junction of Highway 55 near Grassland this year, starting at the south end of Fort McMurray.

Premier Ralph Klein said: “Building infrastructure leading to the oil sands pays dividends for a stronger economy, and the twinned highway will provide a safer transportation corridor for industry and residents of northeastern Alberta.”

Work has begun to clear the trees for the section of twinned highway from south of Fort McMurray to Highway 881, while engineering and planning work continues farther south. Cost of twinning is estimated at over $650 million.

Alberta Government Tests Public’s Taste For High-Speed Rail
The Alberta Government is selecting a consultant to assess the ridership potential of a high-speed passenger rail link between Calgary and Edmonton. If the survey fails to suggest enough public interest, the project — estimated to cost $5 billion — will be set aside for now.

Wolfden Plans Arctic Port
Base-metal mining company Wolfden Resources Inc. plans to invest up to $135 million building an arctic port at Grays Bay, Nunavut. The project would include a related all-weather road to serve its five mining properties in the region.

Chief Operating Officer John Begeman says the port and road initially will support the company’s properties but eventually might be made available to other producers.

Wolfden also has paid $50 million for a 70 per cent interest in Inmet Mining Corp.’s Izok, Hood and Gondor base metal properties, adding them to its High Lake and Ulu gold plays. In order to produce ore from its properties, Wolfden has acquired Kinross Gold Corp.’s closed Lupin gold mine, originally opened in 1982.

Planned Nunavut Mine Gets Board’s OK
 Production could start in 2008 at the Doris North gold mine, in the aftermath of public hearings earlier this year. The Nunavut Impact Review Board has now recommended to the Minister of Indian and Northern Affairs a go-ahead on development of the Miramar Mining Corp. project near Cambridge Bay.
Vancouver-based Miramar anticipates obtaining permits in 2006 to allow shipping of equipment to Hope Bay in the summer of 2007.

EnCana Sells U.S. Gas Storage
EnCana Corp. is selling its U.S. gas storage business interests for $1.5 billion US to the Carlyle/Riverstone Global Energy and Power Fund.

The sale of this non-core asset is part of EnCana’s divestiture program. The company continues to focus on capture and development of long-life North American natural gas and in-situ oil sands plays.
EnCana has about 174 billion cubic feet of working gas capacity at five facilities in Alberta, California and Oklahoma. It will retain its Hythe gas storage facility in northwest Alberta.

Dominion Starts Up Pembina Battery
Dominion Exploration Canada Ltd. has started up its new oil battery in the Pembina area, 165 km southwest of Edmonton. The $35-million expansion is designed to process 30 million cubic feet of natural gas and 18,900 bb/d of oil.

The facility also is licensed for 345 tonnes of sulphur and 5,000 cubic metres of water per day.
With a 60 per cent working interest, Dominion, as oper-ator, will staff the facility continuously. Extensive monitoring and control systems are in place, both in the battery and at field sites, to ensure complete operational integrity at all times. Dominion has opened a Pembina field support office just north of the new battery.

EPCOR To Run Calgary Calpine Plant
EPCOR Utilities Inc. has acquired rights to power from the Calgary Energy Centre.

The Energy Centre, which had been owned and operated by Calpine Power Income Fund, is a 250-MW baseload, natural-gas-fired power generation facility, with an additional 50 MW of peak production capability.

The tolling arrangement gives EPCOR exclusive rights to market power from the facility until June 30.
The $300-million plant in northeast Calgary has been shut down since Calpine Corp. of California filed for bankruptcy in December.