Going West – Imperial Oil Plans Move to Calgary
Editor’s Note: Doing
Business is a roundup of news and developments in the
business end of engineering, geology
BY NORDAHL FLAKSTAD
Imperial Oil Ltd. will get closer to the
action by shifting its head office to Calgary from Toronto.
The move will affect approximately 300 head office positions
in a company that has 6,300 employees Canada-wide. Imperial
becomes the last major integrated oil company to shift its
headquarters to Canada’s oil and gas capital.
Imperial expects to complete the move by August 2005. According
to Imperial CEO Ted Hearn, “Many of our major initiatives
are located in Western Canada and the North. This move will
enable us to strengthen our focus on these key priorities.”
Genesee Phase 3 Completed With Injury-Free Record
Owners, contractors and workers at Genesee Phase 3 power plant
west of Edmonton joined forces recently to celebrate two million
hours of construction work without a lost-time injury. To
mark the occasion, a $60,000 donation has been made to STARS
Substantive construction on the $695-million EPCOR
and TransAlta joint venture was completed
in July under the direction of the principal construction
contractor, Hitachi Canada.
The project is on time and on budget, and commissioning
activities are now underway. More than 2,000 trades people,
represented by 16 unions, and contractors worked at the generation
facility during peak periods.
Think Tank Says High-Speed Rail Could Succeed
A high-speed passenger train linking Calgary and Edmonton
could be a viable proposition, says a report by the Van Horne
Institute, a transportation think tank at the University of
Calgary. The institute’s pre-feasibility study, worth
$800,000 in federal and provincial money, places the cost
of the rail connection between $1.7 and $3.4 billion. The
line would require extensive infrastructure work, including
new bridges as well as tunnels to replace level crossings.
One of two options the study considered was a high-speed
train similar to France’s TGVs running on dedicated
track at 300 kilometres per hour. A slower (230 km/h) alternative
would use the existing Canadian Pacific and Bombardier’s
JetTrain, which can quickly adjust speed depending on roadbed
Pipeline Plans Filed With Regulators
Proponents of the Mackenzie Valley Pipeline have filed applications
with regulators for what is now a $7-billion project —
an increase of $2 billion over earlier projections.
In addition to the 1,220-km gas line connecting Inuvik and
northwestern Alberta, the project now envisions a 475-km liquids
pipeline. It would carry liquid gas byproducts to the existing
Norman Wells pipeline owned by Enbridge Inc.
Completion of the Mackenzie project is targeted for 2009-2010
and will require a 7,000-member workforce. A go-ahead will
depend on final cost estimates and the regulatory process,
which involves the National Energy Board and a joint environmental
review panel with federal, provincial and aboriginal participation.
The ownership consortium includes Imperial Oil,
ConocoPhillips, Shell Canada
and the Aboriginal Pipeline Group.
Meanwhile, projections prepared in connection with the consortium’s
application indicate that when the 1.2-billion-cubic-feet-per-day
pipeline comes on stream in 2010, Alberta oilsands operations
alone will require an estimated 1.1 billion cu. ft. of natural
gas a day.
Gold Makes a Return In Northwest Territories
Gold is giving diamonds a run for the money in the Territories.
Steady, high gold prices above $400 US an ounce helped the
Northwest Territories register the most active summer exploration
season in a decade.
“Diamonds have been the darling of the exploration
business for the last five years. But lately gold has come
back,” said Mike Vaydik, general manager of the N.W.T.
and Nunavut Chamber of Mines. “It’s a good time
to be in the mining sector in the North.”
Besides the search for new deposits, surging prices have
rekindled interest in former producing properties. For example,
Tyhee Development Corp. has begun redevelopment north of Yellowknife
at the Discovery Mine, which produced gold in the 1950s and
1960s. Seabridge Gold Inc. is exploring in the Courageous
Lake area, site of the 1980s-era Salmita Mine.
In another development, Anaconda Gold Corp. and Doublestar
Resources Ltd. are drilling at Damoti Lake, 180 km north of
Tahera Teams Up With Tiffany
Tahera Diamond Corp. has moved closer to bringing Canada’s
third diamond mine on stream through a deal struck with international
jewelry giant Tiffany & Co. The latter will finance $35
million of the proposed $76.5-million Jericho Mine in the
Northwest Territories. Tahera plans to raise the remaining
capital on equity markets.
New Research Centre Will Focus on Tailings
A new Oil Sands Tailing Research Facility associated with
the University of Alberta has opened at the Natural Resources
Canada Research Centre, at Devon southwest of Edmonton.
The facility will investigate ways to dry and reduce the
wet waste generated by bitumen mines in the Fort McMurray
area. Dr. Dave Sego, P.Eng., of the geotechnical
group within the U of A’s Department of Civil and Environmental
Engineering, has been a driving force behind creation of the
$2.2-million facility. It’s supported by university,
industry, and federal and provincial funding.
According to Syncrude Canada President Jim Carter,
P.Eng., processes expected to emerge from the new
facility will speed the reclamation that follows mining.
Canada Aiming To Woo China On Wood Sales
China offers tremendous opportunities for Canadian forest
products, says the president of the Canadian Council of Forest
Industries. Paul Newman told the Alberta Forest Products Association
annual conference that China produced 160 million cubic foot
of wood in 2002. But, he said, that was still 108 million
cubic feet shy of what it used.
Russia has been a traditional wood-products supplier to
China. Canada, however, hopes a Canadian wood products development
centre in China will increase its role, Mr. Newman said.
Meanwhile, another conference speaker, Craig Campbell of
PricewaterhouseCoopers, cautioned that due to changes in B.C.
forestry policies, Alberta may be losing the advantage it
once had over its western neighbour.
Petro-Can Share Sale Pumps More Into Tank Than Ottawa
Willing buyers helped channel $600 million more than the $2
billion the federal government had expected to gain from the
sale of its remaining stake in Petro-Canada.
When Ottawa recently sold the 49.4 million shares it still
held, at $64.50 each, it raised $3.2 billion. When book value
and administrative costs were taken into account, that left
Though the federal government now has divested its financial
stake, it intends to maintain a political interest by continuing
to limit individual ownership in the former Crown corporation
to 20 per cent.
TransCanada Buys U.S. Hydro Plants
TransCanada Corp. is paying $641 million
Cdn to buy 41 hydro generating stations in the northeast United
The seller, USGen New England Inc., is insolvent and under
Chapter 11 bankruptcy protection. TransCanada already owns
or is building 4,700 megawatts of electrical generating capacity.
The generating system being acquired involves 13 dams and
produces approximately 1.4 million megawatt-hours of electricity
ATCO Power Trims Sails On Wind Power Project
ATCO Power is pulling out of a $250-million,
150-megawatt power farm development planned for the Rushlake
Creek area of southwest Saskatchewan. The pullback leaves
Saskatchewan’s provincially owned SaskPower alone to
move ahead with or without other partners.
In other wind-power developments, plans are under way in
Quebec to invest $1.9 billion to triple the size of that province’s
wind-power sector. The Quebec government has announced eight
wind farms with a total of 990 MW capacity. Cartier Wind Energy
Inc., partly owned by TransCanada Corp., will build six of
these facilities, slated for completion by 2012.
Meanwhile, Suncor Energy, Enbridge
Inc. and Spanish-controlled EHN Wind Power Canada
have proposed a 75-MW wind-power project near Ripley, Ont.
With just over 200 MW of installed wind-generating capacity,
Alberta currently accounts for more than half of Canada’s
371 MW of wind energy.
Total Telecom Builds Fibre-optic Network For Lloydminster
Total Telecom Inc. has completed design engineering for a
citywide fibre-optic network that it will build in Lloydminster.
The 20-km network will link 28 government and public buildings
in the city.
Devon Energy Puts Properties On the Block
Devon Energy Corp., which holds assets in
Alberta, Saskatchewan and eastern British Columbia, has joined
a parade of American oil companies selling off production
properties in Canada.
Devon said it will use proceeds from the sale of oil and
gas properties in the U.S., Canada and Gulf of Mexico to finance
a share buyback. El Paso Corp., Calpine Corporation and Marathon
Oil are among other U.S.-based companies that have sold off
their Canadian assets.
Infrastructure Money On the Way for Municipalities
Calgary and Edmonton are each expected to receive $1 billion
as part of a $3.3 billion provincially funded “catch-up”
program for municipal infrastructure. Premier Ralph Klein
indicated the spending program following a cabinet planning
session in late September. The funds are expected to be channelled
toward improvement and upgrading of municipal road, bridge
and transit infrastructure.
Report Recommends Ways to Increase Diamond Demand
Exploration incentives, a competitive tax regime and faster
approval of new mines are among the recommendations of a national
diamond strategy prepared with provincial, but not federal,
Released by the governments of the Northwest Territories
and Quebec, the report was prepared on behalf of all provinces
However, initial reaction indicated that the federal government
would not be anxious to adopt the recommendation to drop the
10 per cent excise tax on diamonds as a means of spurring
the industry and in order to make Canadian diamonds more cost-competitive
at home and abroad.
Drilling Slumps In Soggy Summer
A wet summer has reduced activity by oil and gas drilling
rigs, according to the Canadian Association of Oilwell Drilling
The association placed the number of rigs active in late
July at 486, a figure that had dropped to 349 by early September.
Despite this slowdown but with drilling expected to pick up
over the winter, the industry continues to face a shortage
of rig workers, said Don Herring, the group’s president.
Shell Canada Plans Oilsands Expansion
Shell Canada Ltd. anticipates oilsands production
to rise to 290,000 bbd from current levels of 155,000 bbd
by the time a planned $4-billion expansion comes on stream
Meanwhile, efficiencies and improvements over the next three
years will raise daily output of the Muskeg River Mine and
the associated Scotford Upgrader at Fort Saskatchewan by 180,000-to-200,000
bbd. Expansion of mining is expected to lead to peak construction
employment of 2,500 in 2008. Additions to the Scotford Upgrader,
including adding a third hydro-conversion unit, will employ
a construction workforce of 4,000 at peak in 2008.
Refinery Retrofit To Cost $250 Million
Imperial Oil plans to spend $250 million for conversions at
its Strathcona refinery near Edmonton to meet federal regulations
requiring reduced sulphur emissions from diesel vehicles by
mid-2006. The conversion, expected to take 18 months, follows
a similar retrofit completed last year to permit low-sulphur-gasoline
production at the same facility.
Tolko Upgrades High Level Plant
As part of a larger $150-million investment in its Alberta
facilities, Tolko Industries will spend $35 million to upgrade
its lumber mill at High Level.
The manufacturer and marketer of specialty forest products
expects to take nine months to complete the improvements,
which will increase fibre recovery, reduce waste and add to
the value of each log handled at the High Level plant. The
company is based in Vernon, B.C.