February 2007 ISSUE
DOING BUSINESS
Northern Lights Eyes Waterway
Shipping to Cut Cost
BY NORDAHL FLAKSTAD
Freelance Writer
Synenco Energy Inc. plans to build huge modular units overseas and then float them to its Northern Lights oil sands mining and extraction operations in Alberta. The modules will be transported to Fort McMurray from Asia by sea, heading up the Mackenzie River, through Great Slave Lake and Lake Athabasca, and then along the Athabasca River.
Thirty modules weighing up to 2,000 tonnes each would be fabricated in China, Korea and Malaysia. In contrast, delivery by land via Edmonton would require division into 1,000 components of no more than 175 tonnes. SinoCanadian Petroleum, a subsidiary of China’s Sinopec, owns 40 per cent of Northern Lights.
The proposed process is expected to reduce project costs by 21 per cent to $4.4 billion from $5.6 billion. It will also more than halve requirements for Canadian construction labour.
Suncor Sues
Consultants Over Fire
On behalf of insurers, Suncor Energy is suing several engineering companies
in the aftermath of a 2005 fire. Suncor says the fire lost it oil sands
production of 115,000 barrels per day for nine months.
Firms named in the $650-million suit include Bantrel Co., SNC Lavalin and the Bechtel Group Inc.
Investigations determined that a faulty fractionater nozzle caused the fire. The nozzle is used to separate crude oil into various product streams. Court documents claim the nozzle had a design-life of 15 years but failed after three.
TransCanada Purchases
Major Pipeline System
Through the purchase of some major El Paso Corp. assets, TransCanada
Corp. has acquired one of the largest natural gas pipeline systems
in the U.S.
The company has bought ANR Pipeline Company and ANR Storage Company,
plus moved
into a controlling interest position in Great Lakes Gas Transmission
Limited Partnership, all for $3.4 billion US.
The ANR system consists of 17,000 km of pipeline with a peak-day capacity of 6.8 billion cubic feet per day. It transports natural gas from producing fields in Louisiana, Oklahoma, Texas and the Gulf of Mexico to markets in Wisconsin, Michigan, Illinois, Ohio and Indiana.
The Great Lakes partnership stake grows to 53.55 per cent from 50 per cent. TransCanada will become the operator of the partnership, replacing an affiliate it owns jointly with El Paso.
Panel Sets Limits
In Approving Albian Expansion
A provincial-federal review panel has placed 16 environmental and
technical conditions on an expansion adjacent to Albian Sands Energy
Inc.’s existing
oil sands mine, 70 km north of Fort McMurray.
The panel, formed by Alberta Energy and Utilities Board and the Government of Canada, has handed qualified approval to Albian to expand its Muskeg River project. The decision also approves integration with Shell Canada’s Jackpine Mine and the building of a bitumen extraction plant.
The panel refused Albian’s request for relocation of portions of Highway 63 in the Athabasca River Valley. Nor was Albian granted approval for an additional 60-metre-wide corridor east of the highway for pipelines to the Aurora North mine. And neither did it get approval for a 30-metre-wide corridor for a 240-kV grid connection to Albian’s plant site.
The joint panel made 13 recommendations to the federal government relating to water quantity, water quality and fish habitat.
Twenty-one recommendations aimed at the Alberta Government include calls for coordination by all levels of government to ensure that the Regional Municipality of Wood Buffalo can service sustained growth.
Stantec Announces‘
Major Presence’ in New York
Edmonton-headquartered Stantec has announced plans to acquire Vollmer
Associates LLP, an award-winning New York City company with a
staff of 650. Vollmer’s
gross revenues reached about $80 million US in 2005.
“The addition of Vollmer Associates will be very strategic for Stantec,” says Stantec President and CEO Tony Franceschini, P.Eng. “It will significantly increase the size of our transportation practice, enhance our service offering in transportation, particularly in specialized areas such as toll roads and major transit systems, and add critical mass to our U.S. east operations with a major presence in New York City.”
From offices throughout the northeast U.S., the firm provides engineering, architecture, planning, landscape architecture and survey services focused on transportation. The transaction is expected to close in April.
Shell Steps Up
Peace River Efforts
Shell Canada Ltd. has filed a regulatory application to raise output
from an oil sands development near Peace River to 100,000 bb/d
from 12,000 bb/d.
Shell
has operated in the area since 1979. It acquired additional land
and production through its acquisition of BlackRock Ventures in
2006.
EUB Upholds
Power Corridor Decision
A lawsuit looms, but the Alberta Energy and Utilities Board has
upheld its earlier decision favouring a west corridor for a power
transmission
link
between Edmonton and Calgary.
“Evidence presented at the review did not demonstrate that the west corridor is unsuitable for future transmission development or that any of the other corridors (are) markedly superior,” says an EUB release.
Many landowners along the proposed route for Alberta Electric System Operator’s $495-million project have objected. The route involves placement of 750 towers west of the Queen Elizabeth II Highway. Landowners have suggested a longer, more costly route that’s further east.
Construction is scheduled to start in 2007, although a group against the corridor choice has filed a lawsuit to try to force the EUB to reverse its decision and hold new hearings. Lavesta Area Group alleges that the project is environmentally unsound and that its real purpose is to export Alberta power.
Quebec Company Plans
Calgary Hotel, Condos, Offices
Group Germain, a family-owed operator of boutique hotels from
Quebec City, plans to build a $110-million complex in Calgary.
It will
include a 150-room
hotel, 42 luxury condominium units and an 11-storey office
tower.
Germain is joining forces with Grenville Properties Ltd. on the development. It will be located close to the Calgary Tower and is scheduled for completion by 2009.
TRLabs Receives Financial Boost
Federal and provincial governments are providing $22.3 million
over five years to TRLabs, Canada’s largest not-for-profit information and technology
research consortium. The funds will benefit TRLabs’ 50 consortium members — within
government, universities and industry — and help
train students.
The federal government is providing $10 million and Alberta $7.5 million. The remainder will come from Saskatchewan and Manitoba.
Alberta-Pacific Forest
Upgrades Boyle Plant
Alberta-Pacific Forest Industries Inc. is investing $40
million to modernize its Boyle pulp operations. Construction
will
begin in April
and will
not disrupt output at the Alberta plant, which produces
650,000 tonnes of pulp
a year.
The project will include a tree-length logline, two conveyors for loading and de-icing logs, and a modern debarking and log chipper system.
Land Sales Set Record
Spurred by oil sands activity, petroleum-related land
sales by the Province of Alberta reached a record $3.4
billion
in 2006.
That’s up 50 per cent
from $2.26 billion in sales in 2005. Of the 2006 total, $1.96 billion was associated
with oil sands leases.
TransAlta Closes Mine
TransAlta Corp. has shut its 30-year-old Centralia coal mine in Washington.
The company will now purchase coal from Wyoming’s Powder River Basin
to fuel its Centralia coal-fired plant. The mine shutdown, prompted by earth
slides and safety concerns, means the loss of about 600 jobs.
Petro-Canada Files Application
For Sturgeon Upgrader
Petro-Canada Oil Sands Inc. has applied to the Alberta Energy and Utilities
Board and Alberta Environment to construct and operate the Sturgeon Upgrader,
40 km northeast of Edmonton.
The upgrader is expected to eventually process up to 340,000 bb/d of bitumen from the Fort Hills Mine and other production sources. The Sturgeon Upgrader and Fort Hills Mine have a projected combined cost of $12.8 billion.
The Fort Hills Mine obtained regulatory approval in 2002 for up to 190,000 bb/d of bitumen production, starting in 2011. It’s located 90 km north of Fort McMurray.
“This regulatory filing is a big step forward on the Fort Hills project,” said Neil Camarta, P.Eng., Petro-Canada’s senior vice-president, oil sands.
Fort Hills Energy L.P. consists of Petro-Canada with 55 per cent, UTS Energy Corp. with 30 per cent, and Teck Cominco Ltd. with 15 per cent.
TEC Edmonton’s
New Downtown Centre
Receives $15 Million
The federal government has contributed $15 million to establish the Technology,
Entrepreneur and Company Centre on University of Alberta property in
downtown Edmonton.
The TEC Edmonton project will be located at Enterprise Square — the former Hudson’s Bay Building — which is undergoing an $86.5-million retrofit.
TEC Edmonton is a joint venture of the University of Alberta and the City of Edmonton, through the Edmonton Economic Development Corp. The not-for-profit organization assists inventors at post-secondary and research institutions, helping them evaluate their inventions for market potential, protect intellectual property and market new technologies.
The federal contribution to the new centre comes through Western Economic Diversification.
TransCanada Plans Investment
In U.S. Wind Power
TransCanada Corp. will seek approval to build a 44-turbine wind farm
in Maine, just south of the border. Spending on the Kibby Mountain
initiative is estimated
at $250 million to $300 million US.
Nexen Starts Up
Buzzard Field Production
In North Sea
Nexen Inc. has begun production at the Buzzard field in the North
Sea. Buzzard is located in 100 metres of water, about 100 km northeast
of
Aberdeen, Scotland.
With gross recoverable reserves of about 550 million barrels of oil equivalent, it is one of the largest fields to be discovered and developed in the U.K.’s North Sea in over a decade. Peak daily production of 200,000 b.o.e. is expected to be reached during the first half of 2007.
Nexen has a 43.2 per cent working interest in Buzzard. Also in on the field are Petro-Canada, BG Group and Edinburgh Oil and Gas.