NOVEMber 2008 issue
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Doing Business
ATCO Electric Finds Partners To Expand Transmission
BY NORDAHL FLAKSTAD
Freelance Writer
ATCO Electric Ltd. will undertake a large portion of the transmission capital work identified in a 10-year plan of the Alberta Electric System Operator. In the 2007-2017 plan, AESO foresees the potential for $5 billion in transmission development to ensure a reliable supply of electricity for Alberta.
In connection with the move, ATCO Electric has formed an alliance with U.K.-based Balfour Beatty and Australia-based United Group Ltd. They will provide engineering, construction, procurement and project management services to supplement ATCO Electric’s expertise. Estimated value of the alliance contract is $700 million over five years.
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ALL WIRED UP |
EnCana Offshoot
Scheduling Changes
The offshoot has a name now, but EnCana Corporation is revising the original schedule for its proposed split into two independent energy companies focused on unconventional resources. One will be an integrated oil company named Cenovus Energy Inc., the other a pure-play natural gas company retaining the name EnCana Corporation.
Because of uncertainty and volatility in global financial markets, EnCana is delaying a December shareholder vote until clear signs of stability arise.
“We remain committed to creating Cenovus and we are continuing to work on reorganizing our company’s structure so that we are ready to move forward with the transaction at the appropriate time,” said Randy Eresman, the president and CEO of EnCana.
Under the proposed split, Cenovus will be a fully integrated North American oil company with in situ oilsands properties, refineries, and oil and gas resource plays. Cenovus derives its meaning from its letter couplings and root origins. Cen represents an innovative way of doing business in a new century. Novus is taken from the Latin root word meaning new.
EnCana has also announced that construction has begun on a 50-50 integrated oil venture with ConocoPhillips. Underway is a coker and refinery expansion at the Wood River refinery in Roxana, Ill. The project will
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add a 65,000-barrels-per-day coker to enable processing of growing supplies of heavy crude oil
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increase total crude oil refining capacity by 50,000 bbl/d to 356,000 bbl/d
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More than double heavy crude oil refining capacity to 240,000 bbl/d.
TransAlta Sells
Mexican Assets
TransAlta Corp. has sold its Mexican business to InterGen for $303.5 million US. The sale included a 252-MW gas-and-diesel combined cycle gas plant in Campeche, a 259-MW combined cycle gas plant in Chihuahua, and related commercial arrangements.
In another development, Luminus Management LLC has abandoned an almost year-long, $7.8-billion takeover bid of TransAlta. Luminus is already TransAlta’s largest shareholder. It owns about nine per cent of the shares of Canada’s largest independent power producer.
Babcock & Brown
Tapped For
P3 Schools Construction
The Alberta Government has signed an agreement with BBPP Alberta Schools Ltd. to design, build, finance and maintain 18 new schools in Calgary and Edmonton. The public-private partnership foresees the schools opening in September 2010.
BBPP Alberta Schools is a special-purpose company owned by Babcock & Brown Public Partnerships Ltd. of the U.K., an international public infrastructure fund specializing in the development and operations of public-private partnerships. The company succeeds over two other qualifying groups the Alberta Government also sought proposals from earlier this year.
Under the arrangement, cost to taxpayers will be $634 million. The province says the cost is $118 million less than it would be if the project was handled in the traditional way.
In the partnership are Edmonton’s Barr Ryder Architects and Interior Designers, GEC Architecture, Honeywell Canada Ltd. and Bird-Graham Schools, a joint venture of Bird Design-Build Ltd. and Graham Design Builders.
EPCOR LP Sells
Stake in Subsidiary
EPCOR Power LP will use proceeds from its stake in one company to pay for the recent purchase of a Chicago-area gas-fired cogeneration plant. The power income fund has announced plans to sell Primary Energy Recycling Holdings. EPCOR Power LP owns the company in partnership with Primary Energy Recycling Corp.
Edmonton-based EPCOR Inc. owns 30 per cent of EPCOR Power LP.
ATCO Forms Water Subsidiary
Newly formed ATCO Water, a division of ATCO Energy Solutions, will pursue water opportunities within and beyond Alberta. The division will focus on designing, building and operating water and wastewater infrastructure and plants for industry and municipalities — here and abroad.
ATCO Water has reached an agreement with GE Water & Process Technologies to draw on the latter’s leading technologies, especially in purification and advanced recycling.
Keyera Invests
In Two Gas Plants
Keyera Facilities Income Fund is increasing its stake in gas plants. It will pay $129 million to acquire an additional 40 per cent interest in the Keyera Brazeau River gas plant, as well as 100 per cent of the Nevis gas plant.
The Nevis plant is a sour gas plant in Central Alberta with a capacity of 150 million cubic feet per day.
In addition to the plants themselves, Keyera acquires extensive gathering pipeline systems and compression at both facilities.
Stantec Partners
On Okanagan Health Project
Stantec will work on the largest single investment ever in the health-care system in the British Columbia Interior. The $432.5-million expansion is a public-private partnership between Infusion Health and the Interior Health Authority of B.C.
Stantec is designing several facets of the project, including architectural, mechanical, electrical, structural, civil and LEED consulting services for work on the Kelowna and Vernon hospitals. Gold certification under LEED — the trademarked Leadership in Energy and Environmental Design program — is targeted for the two expansions.
Infusion Health is a joint venture of Bilfinger Berger Project Investments and John Laing Infrastructure.
Land Sales Set Record
In Saskatchewan
Saskatchewan’s oil and gas land sales in October brought in $223.4 million in revenue. The year-to-date revenue figure from land sales in the province now stands at a record $1.07 billion.
For the third time this year, a Saskatchewan land sale has exceeded $200 million in revenue. The top five land sales in Saskatchewan’s history have occurred in 2008.
October’s sale featured 49 petroleum and natural gas exploration licences that brought $164.5 million and 344 lease parcels that brought $58.9 million. The Weyburn-Estevan area attracted the most bids with sales of over $191.7 million, reflecting the continuance of a strong interest in the Bakken play.
The Swift Current area was next at $22.3 million, followed by Kindersley-Kerrobert at $6.6 million and Lloydminster at $2.8 million.
BA Heartland Project
Placed on Hold
Construction has halted on the BA Heartland Upgrader in the Fort Saskatchewan area, another victim of economic uncertainty. The project was acquired by Value Creation Inc. when the previous BA Heartland owner experienced economic difficulties earlier this year.
The project, elements of which have already been built near Shell’s Scotford refinery and upgrader, was projected to cost $5 billion and was anticipated to eventually produce 260,000 bbl/d.
Industry officials expect the project will be mothballed for four or five years.
SNC-Lavalin Awarded
Contract For Mexican Plant
SNC-Lavalin has been awarded a wide-ranging contract in the construction of a 2,400-tonne-per-day sulphuric acid plant in Mexico. The company will look after the technology package; engineering, project management and procurement services; and construction assistance.
Minera y Metalurgica del Boleo SA de CV is the owner, a Mexican company controlled by Baja Mining Corp.
The plant will be part of Mexico’s largest copper-cobalt project, a mining and processing complex under development in Baja, Mexico. Proponents want the complex to produce about 50,000 tonnes of copper and 1,850 tonnes of cobalt annually.
Capital investment for the new acid plant, including a 46-MW power island, is about $120 million US. Work on it has already started and the complex is scheduled to begin operations in March 2010.
Mammoet Sets Down
New Edmonton Footprint
Lifting specialist Mammoet Canada Western Ltd. has opened a single, large complex in Edmonton. The new 75,000-square-foot complex consolidates the operations of three existing Edmonton sites.
On 45 acres in northeast Edmonton, the complex accommodates 500 employees. Alberta’s oilsands are a major focus of the Netherlands-headquartered company’s crane and heavy hauling operations in Canada.
TELUS and Bell Make Connection For Wireless Future
TELUS Corp. and Bell Canada, a unit of BCE Inc., will combine to develop the next-generation of wireless networks in Canada in the form of high-speed packet access.
Said Darren Entwistle, TELUS president and CEO: “Next generation wireless services will give our clients more wireless functionality, including international roaming, fast network speeds and a compelling selection of globally compatible handsets and devices.”
NovaGold Resources
Begins Alaska Production
Vancouver-based NovaGold Resources Inc. has received regulatory authorizations and has begun production at its Rock Creek gold mine near Nome, Alaska. Upon achieving full commercial production, the Rock Creek mine is expected to produce about 100,000 ounces of gold annually.
Canfor Shuts
B.C. Plywoood Plant
Poor demand is forcing Canfor Paper Corp. to close its plywood plant in
Fort Nelson, B.C. The closure of the plant — with an annual capacity of 220 million square feet of plywood — affects 290 employees.
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