May 2006 ISSUE
doing business
Alberta Budget Unveils Infrastructure Upgrade
BY NORDAHL FLAKSTAD
Freelance Writer
 |
Ringing on |
Finance Minister Shirley McLellan’s 2006 Alberta budget calls for investments of $3.6 billion over three years to build and enhance provincial highways. It includes funding to begin twinning Highway 63 south of Fort McMurray, to complete twinning of Highway 43 north to Grande Prairie, and to start work on key segments of the Edmonton and Calgary ring roads.
In addition, the budget provides for grants of more than $1 billion for municipalities in 2006-07. This includes $600 million through the Alberta Municipal Infrastructure Program, a five-year program begun in 2005.
Water management will receive $277 million over the next three years. This spending encompasses $126 million in capital grants to support municipal water supply and treatment, and wastewater treatment and disposal, as well as $72 million for irrigation rehabilitation and $57 million for government water management infrastructure.
Husky to Expand Lloydminster Upgrader
Husky Energy Inc. is going ahead with detailed engineering to double capacity
at its Lloydminster upgrader. The expansion will increase daily capacity to 150,000
barrels a day from 80,000 bb/d.
The cost of the expansion is initially placed at $2.3 billion, while processing
and licensing costs will amount to about $90 million. Engineering is expected
to take 15 to 18 months.
Royal Dutch Emerges As Player In the Oil Sands
The parent company to Shell Canada Ltd., Royal Dutch Shell PCL, has emerged as the mystery buyer of a record $465 million worth of Fort-McMurray-area leases sold earlier this year by the Alberta Government. The leases originally were obtained through a numbered company.
Royal Dutch subsequently announced that it had bought 10 parcels through its U.S. subsidiary, Shell Exploration & Production in the Americas. The lease area, 100 kilometres west of Fort McMurray, includes the Grosmont Formation and is understood to contain bitumen encased in limestone.
Shell’s U.S. subsidiary has formed a new company, SURE Northern Energy, to seek new production methods for the property.
Peace River Upgrader Getting Ready for Construction Start-up
PRO Upgrading Inc. is targeting 2010 start-up for the 25,000 bb/d first stage of its proposed Blue Sky bitumen upgrader near McLennan, 320 km northwest of Edmonton.
The Peace River-area plant is projected to cost $782 million and work is to begin this summer. Key project backers, Don and Doug Allan, are the former operators of Northern Alberta Nitrogen, located on the site of the planned upgrader. The facility could have an eventual 100,000 bb/d capacity.
Power Plant To Be Built In Northeast B.C.
Hillsborough Resources Limited will develop an energy generation project in northeast British Columbia in conjunction with AES Pacific Inc., a power company based in Arlington, Va. To operate under the name AESWapiti Energy, the generation project will include a 165 MW thermal electric power plant and a 35-km and 230-kV transmission line.
Fuel will be supplied by Hillsborough’s Wapiti coal mine, which is located between Tumbler Ridge and Dawson Creek, B.C.
New Science Complex Planned for U of A
The University of Alberta has unveiled plans for a new $315-million Centennial Centre for Interdisciplinary Science. Scheduled to open in 2010, the centre will be one of only a few of its kind in the world to house interdisciplinary science research teams in one facility.
To be constructed using LEED building principles, the new facility will replace the existing physics and V-wing buildings.
ATCO Gas Opens Edmonton Centre For Meter Maintenance
ATCO Gas has opened a new, 55,000-square-foot gas meter, electronics, instrumentation and distribution centre in Edmonton. The 186th Street facility centralizes activities previously spread over four Edmonton locations.
ATCO manages about 920,000 meters in Alberta.
Petro-Canada Backs Water Recycling Project
Petro-Canada is supporting development of a newly opened, 5.5-km recycled water
line linking Edmonton’s Gold Bar Waste Water Treatment Plant and Petro-Canada’s
Strathcona County Refinery.
Under the joint venture with the City of Edmonton and Strathcona County, Petro-Canada
is contributing $13 million toward a membrane facility and a pump station at
Gold Bar. Besides supplying the refinery, surplus water will be provided to area
ski clubs for snowmaking and to parks for irrigation.
Petro-Canada will use 13,000 cubic metres of recycled water a day. About 30 per cent of the water will be returned to the North Saskatchewan River through the Alberta Capital Region Wastewater Treatment Plant.
West Fraser Plans Pulp Upgrades And Shutdown at Hinton
West Fraser Timber Co. Ltd. plans to shut down one of its two pulp machines in Hinton and to invest $20 million to update the remaining machine. The closure of the pulp machine on Nov. 30 will result in the loss of 100 jobs.
A higher valued Canadian dollar and competition from low-cost mills in Brazil and Indonesia are among the reasons.
Churchill Corp. Makes Turnaround
Churchill Corp. has swung from a $6.2-million loss in 2004, to register earnings
of $3.8 million in 2005.
Churchill President and CEO Norm Rokosh, P.Eng., said: “Improved
conditions in all of our markets, internal organizational and systematic changes,
as well as new capital construction, combined to produce significant improvements
in our financial results. We are facing the strongest construction market in
our history and look forward to 2006 being an even better year.”
West Hawk Targets Mackenzie Valley Coal
West Hawk Development intends to build a $2-billion strip mine near Tulita in the Mackenzie Valley. The Vancouver firm has acquired 1,100 square kilometres of leases with an estimated 2.1 billion tonnes of coal in three areas of the Northwest Territories.
The company envisions barging the coal out or feeding production into gasification plants for shipment south.
Firestone Ventures Active in Guatemala
Edmonton-based Firestone Ventures Inc. has announced results from the first six drill holes at its Torlon Hill zinc project, located near Huehuetenango, in western Guatemala. The objective of the 20-hole, 1,500-metre drill program is to evaluate the areas of zinc mineralization.
All six holes intersected the mineralized zone, which lies above a well-defined
serpentinite basement.
Firestone Ventures President Lori Walton, P.Geol. said, the first six holes were
drilled at close spacing in an area of high-grade zinc mineralization, locally
exceeding 40 per cent zinc exposed on surface.
Canadian Diamonds Sparkle in Europe
Statistics Canada says diamonds and precious metals, with sales worth $3.27 billion, have become Canada’s primary export to the European Union. Canadian diamond exports to the EU were valued at $1.92 billion in 2004 and the value of gold and other precious metals sold to the region reached $1.35 billion.
In contrast, shipments of wood pulp brought in $1.4 billion in 2004, down 54 per cent since 1995.
Shear Reports Churchill Discovery
Edmonton-based Shear Minerals Ltd. has reported a diamond discovery in the Churchill area of east Nunavut. Shear Minerals, the Stornoway Diamond Corporation and BHP Billiton announced that three macrodiamonds and 159 microdiamonds have been recovered from a till sample from the Sedna Corridor on the Churchill Diamond Project.
The company plans to drill test targets in the area of the sample, and reports increasing confidence that the results point to a kimberlitic source. An exploration budget of $4.5 million is proposed for the area this year. The Churchill Diamond Project has mineral rights to more than two million acres near Rankin Inlet and Chesterfield Inlet.
AltaGas Expands Prairie River
AltaGas Income Trust has announced that it will spend about $9 million to bolster throughput at its Prairie River Gas Plant, east of High Prairie. The additional compression and refrigeration capacity will increase throughput up to 10 million cubic feet per day.
Additional increases are planned at the Calgary firm’s Iron Creek plant in central Alberta and at the Rainbow Lake plant in northwestern Alberta. The company plans to spend more than $16 million in 2006 on capital expenditures, in response to continuing high levels of drilling activity.