June 2006 ISSUE
doing business
Airport Expansions Cleared for Take Off
BY NORDAHL FLAKSTAD
Freelance Writer
Calgary and Edmonton international airports face major expansions in a hot economy — some of them coming sooner than earlier envisioned.
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Plans to Expand |
Calgary International, poised to handle 11 million passengers this year, expects to spend $400 million to upgrade check-in and baggage handling, and to add more gates.
Calgary Airport Authority President and CEO Garth Atkinson said: “We’re going to aggressively expand the terminal building. We’ve got to add more parking and do things on the airfield a bit sooner than anticipated.”
Next year, work begins to expand an airport concourse. A new 14,000-foot
runway is also planned.
Meanwhile, designs proceed on a 184-room Marriott Courtyard Hotel, scheduled
to open at Edmonton International Airport next year. Construction of the hotel,
owned by Concord Hospitality Enterprises of Raleigh, N.C., will begin this fall.
A pedway will connect it to the main terminal.
In the face of strong passenger and cargo growth, Edmonton Airports is reviewing existing facilities — which underwent a $300-million expansion begun in 1997. The corporation anticipates it may seek up to $150 million for added expansion.
Said Edmonton Airports President and CEO Reg Milley: “The scope of the original Air Terminal Redevelopment Project anticipated supporting 5.5 million passengers by 2015. But with 10.5 per cent passenger growth in 2005 and 12 per cent in the first quarter of 2006, passenger numbers are far ahead of that forecast and on-track to reach five million this year and 5.5 million in 2007.”
CAPP Rejects Call
For Oil Sands Moratorium
Should new oil sands development be halted to give the province time to sort
out water usage issues? No way, says the Canadian Association of Petroleum Producers.
It has rejected recommendations from the Pembina Institute that there be a new development moratorium until the province determines how much freshwater the industry should use.
Mary Griffiths, a representative of Pembina, said: “A fee on fresh water would provide companies with an incentive to maximize efficiencies and to seek to eliminate or reduce water use.” The institute is an environmental think-tank.
Pierre Alvarez, president of the petroleum producers’ group, said, “We recognize that we have to improve our water use.” However, he noted that the producers already indirectly pay for water through the royalties applied on oil sands production.
Canadian Hydro
Opens Biomass Plant
Canadian Hydro Developers Inc. of Calgary has officially opened a $55-million,
25-MW biomass power plant at Grande Prairie. The plant is fuelled by sawdust
and bark from Canfor’s nearby sawmill and will feed electricity to the
Alberta grid.
Study to Look Into
Coal Gasification
For Power Production
The Canadian Clean Power Coalition, whose membership includes a number of utilities,
has gasification of coal in its sights. The coalition expects to launch a $33-million,
three-year engineering study, which could lead to construction of a 400-MW, clean-burning
power plant run on synthetic gas made from coal. Costs will be shared by the
federal government, the province and industry.
EPCOR Utilities has committed up to $11 million for preliminary development work adjacent to its existing Genesee station.
Mackenzie Road Top Priority
Of N.W.T. Gov’t
Northwest Territories Premier Joe Handley says development of an $840-million,
1,800-km highway down the Mackenzie Valley is a top priority of his government.
Speaking to the Meet the North Conference in Edmonton, the premier said the project, including a $140-million, 900-metre bridge at Fort Province, should be built as part of the national highway system.
Shell Ready for Role
In Handling CO2
The president and CEO of Shell Canada Ltd. says his company is ready to work
with government to develop new gathering and storage infrastructure for capture
and handling of carbon dioxide, which he classes as “public infrastructure.”
“Such a project does not deliver commercial returns and we will need government funding to invest in the creation of a CO2 market,” explained Clive Mather.
The project “could help trigger other greenhouse gas reduction opportunities throughout Canada and be a technological showcase for the world,” he continued. “It requires a collective effort.”
CPR May Ride
The Bullet Train
Canadian Pacific Railway Ltd. is tracking developments on a possible high-speed
rail link for travel between Edmonton and Calgary. CPR Vice-President of Strategic
and External Affairs Jane O’Hagan will lead efforts examining the high-speed
passenger train initiative.
Premier Ralph Klein has previously voiced interest in such a link, which may cost, according to a variety of estimates, between $1.7 billion and $3.4 billion.
CPR, which would like to see the provincial government pick up part of the tab, is counting on the concept gaining renewed momentum next year, when Mr. Klein’s successor takes office.
Focus Energy, Profico
Join Forces
Focus Energy Trust has merged with Profico Energy Management
Ltd., the largest
privately owned natural gas company in Western Canada.
The $1.2-billion deal will result in Profico shareholders owning 51 per cent of Focus, which more than doubles its production to between 23,750 and 25,250 barrels of oil equivalent. The deal includes 46.7 million barrels of oil equivalent of proved and probable reserves, and 138,000 hectares of undeveloped land.
Shell Reaches Deals
With BlackRock Ventures,
Fort McKay First Nation
Shell Canada Ltd. has bought BlackRock Ventures Inc. for $2.4 billion. The deal
gives Shell access to 325 square kilometres of bitumen properties in the Seal
area, 80 km east of Peace River.
With an estimated one billion barrels that Shell intends to develop, a production system of about 200 wells is slated to start operating in the fall of 2007.
Shell also has agreed with Fort McKay First Nation on an exchange of options to acquire oil sands leases. These are Shell’s Lease 90 and the Fort McKay oil sands lands received as part of its treaty land claim settlement.
This agreement recognizes the right and interest of Fort McKay First Nation, located 65 km north of Fort McMurray, to commercialize land received under its land claim settlement by leasing it to Shell for potential incorporation into the Athabasca Oil Sands Project. The agreement also gives the first nation entry into the oil sands business through an option to acquire and work with Shell to develop Lease 90.
The Athabasca Oil Sands Project is a joint venture by Shell (60 per cent), Chevron Canada Ltd. (20 per cent) and Western Oil Sands L.P. (20 per cent). Shell plans to increase total production of the project to more than 500,000 bbl/d of bitumen from the current 155,000.
Infrastructure Funding
Receives Federal Attention
The Stephen Harper government’s first budget projects more than $5.5 billion
in new federal funding over the next four years for the Highways and Border Infrastructure
Fund, Canada’s Pacific Gateway Initiative, the Canada Strategic Infrastructure
Fund, the Municipal Rural Infrastructure Fund and the Public Transit Capital
Trust.
Finance Minister James Flaherty’s May 2 budget also maintains an estimated $3.9 billion in current funding over the next four years under existing infrastructure agreements.
Says the budget: “By 2009-10 the level of federal support for provincial, territorial and municipal infrastructure will reach almost $5 billion. This is nearly eight times the average annual support during the past 10 years.”
The Canada Strategic Infrastructure Fund, which receives an additional $2 billion, makes strategic investments in highway, urban transit, sewage treatment, flood mitigation and other projects.
Crude Flows
Through Line — In Reverse
A flow reversal in the U.S. gives shippers of Western Canadian crude oil direct
pipeline access to U.S. Gulf Coast refining markets.
Mobil Pipe Line Company, an affiliate of ExxonMobil Pipeline Company, has started delivering Canadian crude to the U.S. Gulf Coast through a 1,380-km pipeline from Patoka, Ill., to Nederland, Tex.
The project reverses a 20-inch pipeline that historically ran south-to-north from Nederland to Patoka.
Penn West and
Petrofund Energy Trust Merge
Calgary-based Penn West Energy Trust and Petrofund
Energy Trust have merged to
create North America’ s largest conventional oil and gas trust.
The combined trust will operate under the Penn West name and have a value of more than $11 billion. Once the merge is competed, Penn West unit holders will own about 71 per cent of the combined trust and former Petrofund unit holders 29 per cent. The trust has initial production of 135,000 barrels of oil equivalent per day.
EPCOR Deals
Battle River Rights
To ENMAX Corp.
EPCOR Utilities Inc. is selling its interests in the Battle River Power Purchase
Arrangement and the Battle River Power Syndicate Agreement to ENMAX
Corp. for
$567 million.
EPCOR acquired the arrangement’s rights in August 2000 through a deregulation auction conducted by the Government of Alberta. The syndicate agreement includes Alberta Power (2000) Ltd.’s Battle River 3, 4 and 5 Units, with a total committed capacity of 662.8 MW.