July 2007 Issue

Doing Business

Enbridge Seeks Regulatory OK for Clipper

By Nordahl Flakstad

Freelance Writer

Enbridge Inc. has filed an application with the National Energy Board for the construction and operation of the Canadian segment of the Alberta Clipper Project, a proposed 1,607-km expansion to provide greater access to the U.S. Midwest for Western Canadian crude oil.

Alberta Clipper will form part of the existing Enbridge mainline liquid pipeline system in Canada owned by Enbridge Pipelines Inc., and the Lakehead System in the United States owned by affiliated Enbridge Energy Partners, LP.

Construction could start in 2008 and the Alberta Clipper is expected to be in service by mid-2010.
Alberta Clipper involves the construction of a new, 36-inch-diameter crude oil pipeline from Hardisty, Alta., to Superior, Wis., within or adjacent to Enbridge’s existing right-of-way. It will have an initial capacity of 450,000 barrels per day and allows for future expansions to 800,000 bbl/d.
Costs of Alberta Clipper are expected to be about $2 billion for the Canadian segment and $1 billion US for the American segment.

Meanwhile, Enbridge Inc. and ExxonMobil Pipeline Co. will jointly assess commercial development of a new crude-oil pipeline from Patoka, Ill., to Beaumont, Tex., and onward to Houston. The project would provide access for U.S. domestic and growing Canadian supplies of crude oil to be transported from the Patoka pipeline transportation hub to the U.S. Gulf Coast.

The two companies have been talking with potential shippers of Canadian crude about the scope, timing and value of the project. Shipper interest and input will help guide the development of the project, which could be in service as early as the end of 2010.

Synenco Energy Reduces Staff
Synenco Energy Inc. has eliminated 46 positions, reducing its workforce by about 30 per cent to 118. The move follows an earlier announcement in May that Synenco was setting aside plans for a 100,000 bbl/d upgrader near Redwater, north of Edmonton.

Synenco is the managing partner of the Northern Lights Partnership, in which it has a 60 per cent interest. It is operator of the Northern Lights oilsands project, north of Fort McMurray.

AEUB Sets Up Ethane Inquiry
The Alberta Energy and Utilities Board has announced it will conduct a public inquiry into ethane extraction. Public hearings are scheduled to begin in November. The inquiry will examine Alberta’s gas, pipeline, liquids extraction and petrochemicals.

Paramount Energy Buys Gas Properties From Dominion Resources
As part of a sale of Canadian exploration assets by Dominion Resources Inc., Paramount Energy Trust has paid $392 million for a series of Central Alberta gas-producing properties. The properties produce 47 million cu. ft. equivalent of gas a day and contain probable reserves of 269.1 billion cu. ft. of gas. The sale also involves interests in 13 gas plants.

PTI Announces Oilsands Lodging Expansion
PTI Group Inc. will spend about $15 million later this year, to further expand its PTI Wapasu Creek Lodge. The lodge provides accommodation and catering for construction workers northeast of Fort McMurray.

This is the second announced expansion to Wapasu Creek Lodge and will raise the facility’s capacity to a total of 1,353 rooms from the previously planned 905 rooms. The lodge, under construction, currently has about 344 rooms available.

The lodge will include catering, ancillary and convenience services, free Internet service, conference rooms and leisure facilities for fitness, entertainment and relaxation.

CP Rail Making Tracks To Heartland
Canadian Pacific Railway is seeking regulatory approval from the Canadian Transportation Agency to construct rail lines to serve planned and existing bitumen upgraders in the Industrial Heartland, northeast of Edmonton.

The railway has made arrangements for 25 km of right-of-way, which would allow it to develop direct rail service to industries on either side of the North Saskatchewan River. The program also includes plans for a new bridge over the river.

 CP will immediately invest $15 million in capital for new infrastructure to increase fluidity, and distribution and logistics capacity. CP will first offer expanded transload capabilities for in-bound construction materials, including dimensional shipments required by the upgraders.

Nuclear Power Proponents Step Forward
Calgary-based Energy Alberta Corp. says it will apply to the Canadian Nuclear Safety Commission to build twin, 1,100-megawatt nuclear reactors at Peace River and Whitecourt in Alberta.

Wayne Henuset, the company’s president, says the project would take nine years to build and cost an estimated $6.2 billion.

Meanwhile, a Canadian-based official of Areva, the state-owned company that has built the nuclear plants that provide most of France’s electricity, says it will compete with Atomic Energy Canada Ltd. to build nuclear facilities in Alberta.

Celanese Closes Edmonton Doors
After more than half a century of operation, Celanese Canada has closed its Edmonton complex, once a pioneering and major employer within Alberta petrochemical sector. Employment at the facility, which peaked at over 1,000, has gradually declined since the company’s earlier announcement that the Edmonton plant was being phased out in response to offshore competition.

SNC-Lavalin Acquires Aqua Terre
SNC-Lavalin has acquired a specialized environmental consulting practice based in Ottawa that has major offices in Toronto, Calgary and Saskatoon. Aqua Terre Solutions Inc.’s services include contaminated site assessment, remediation, management, air-quality modelling and occupational health and safety.

Aqua Terre’s 110 employees bring the environment section of SNC-Lavalin to over 500 people from coast to coast.

Aecon Group Gains Major Contracts
Several Aecon Group divisions have secured major Alberta contracts.

Aecon will provide pipe fabrication, module assembly and related construction services, plus site installation, for BA Energy’s Heartland Upgrader project. Fabrication services and assembly involves about 70 pipe-rack modules.

The company also will supply fabrication and construction services to Kinder Morgan Canada Terminals for its Edmonton North 40 Terminal Expansion project.

These two contracts have a combined value of $60 million.

Aecon further announced that it will fabricate specialty pipe and assemble over 200 pipe rack and process modules for Shell Canada’s Scotford Upgrader Expansion 1, north of Edmonton.

Work will be carried out at Aecon’s fabrication and module assembly facilities in Edmonton.

Cameco Buys Into Western Uranium
Saskatoon-based uranium producer Cameco Corp. has bought a 10 per cent interest in Western Uranium Corp. Western Uranium has properties in Nevada, where it’s based, and in New Mexico.

High-Speed Rail Wins Over Conference Board
The Conference Board of Canada has endorsed a high-speed rail-link between Calgary and Edmonton. The think tank released its opinion recently in a report called Sustainable Urban Transportation: A Winning Strategy for Canada.

Anne Golden, the board’s president and CEO, commented on the Alberta link and one for Windsor-Quebec City. She said: “Too often, we don’t pursue projects because we focus on what they cost. The question we need to ask instead: what are the costs of not having high-speed rail transport between urban centres? Federal and provincial governments must seriously consider it as a partial alternative to road and air travel.”

Alberta Premier Ed Stelmach, meanwhile, has also backed the concept. “Now is the time to prepare, because we have the option available to purchase land,” he said.

The Calgary-Edmonton link is the subject of a market study slated for release later this year.

urthermore, the province has secured land in Edmonton and Calgary, and along the Queen Elizabeth II Highway, which could be used.

Via Rail also has agreed to take part in a feasibility study of a suggested link.

Suncor Shuts Down One Upgrader During Tie-In
Suncor Energy Inc. has shut down one of its two upgraders near Fort McMurray to tie-in new facilities related to a planned expansion. Begun May 31, the work is expected to last approximately 50 days.

uring this period, the other upgrader is expected to continue operating at normal production of about 125,000 bbl/d.

The tie-in of new facilities is part of a planned expansion of oilsands production capacity to a targeted 350,000 bbl/d in 2008, from current capacity of about 260,000 bbl/d.

About 2,000 workers will be involved in the tie-in work, which involves a number of facilities including the upgrader’s cokers, vacuum unit, sulphur plant and cooling tower.

Alberta Government to Use P3 Approach for News Schools
The Alberta Government will use the system known as public-private partnership in a project to build 18 new schools in Edmonton and Calgary by September 2010. The P3 pilot will consolidate the design and construction of the new schools, which will be built on a standard core design to allow for future expansion according to need.

The government will follow a competitive bidding process requiring industry to design and build the 18 new schools, which will include financing and major maintenance for repairs, such as boiler and roof replacements, over a 25-to-30-year span.

Biomass Plant Going Up In Vegreville
BioStreet Canada, a privately owned Calgary company, is building a biodiesel crusher and refinery at Vegreville, east of Edmonton.

Construction is scheduled to begin later this year and be completed in late 2009. The plant will process up to 400,000 tonnes of canola a year, with the resulting liquid fuel being blended with conventional diesel.

Crushed seeds could also be used for human and animal consumption.

Added Costs Force Edmonton To Put Projects on Hold
Rising equipment and construction costs are forcing the City of Edmonton to delay or eliminate up to $224 million worth of projects. The delays include several infrastructure items, such a construction of a new $5.4-million fire station and a $20.1-million police station in the city’s southwest.

Another development placed on hold is a $2-million program area in the city’s Muttart Conservatory, which is being delayed due to a lack of available consultants.