January 2007 ISSUE
DOING BUSINESS
EUB Gives Suncor Nod for Further Expansion
BY NORDAHL FLAKSTAD
Freelance Writer
Suncor Energy Inc. can now expand production to more than
half a million barrels per day between 2010 to 2012, thanks to the Alberta Energy
and Utilities Board’s approval of a third oil sands upgrader.
As part of the Project Voyageur approval, regulators also accepted related plans
for the Steepbank mine extension. The EUB placed several conditions dealing with
tailings management at the site, 30 kilometres north of Fort McMurray.
Meanwhile, work continues on Suncor’s current phase of oil sands expansion. Targeted for commissioning in 2008, it is expected to increase production capacity to 350,000 bb/d from 260,000 bb/d. Work under way also includes the expansion of Suncor’s in-situ operations, targeted for completion this year.
Sporting Gesture Worth $69 Million
The Alberta Government has committed $69 million towards a planned $276-million rejuvenation of winter-sports facilities, including Canada Olympic Park in Calgary. The funding represents 25 per cent of the cost of the Calgary Olympic Development Association’s proposed project, which includes upgrades to existing facilities, as well as a new athletic and ice complex to house Hockey Canada.
Edmonton Airport Expansion Readies for Take-Off
Edmonton International Airport has unveiled plans for $200 million in upgrading. Plans include adding 1,200 surface parking stalls. The various improvements are expected to be completed by 2010, when projections estimate the airport’s annual passenger volumes at 7.5 million — two million more than in 2006.
Petro-Canada Selling Properties
Petro-Canada is auctioning off five in-situ properties — Chard, Stony Mountain, Liege, Thornbury and Ipiatik — in which it has an interest amounting to 1.7 billion barrels of bitumen.
Petro-Canada still controls an estimated three billion barrels of total bitumen resources at Syncrude and Fort Hills, and an estimated five billion barrels plus in its in-situ properties at MacKay River, Lewis and Meadow Creek.
“The properties for sale are very attractive oil sands assets, but their development, for us, will be a ways down the road,” said senior vice-president, oil sands, Neil Camarta, P.Eng.
Garneau Investing In Camrose Operation
Garneau Inc. will spend $5 million upgrading its Camrose pipe-coating plant. The news follows announced plans earlier in the fall by rival Shaw Pipe Protection Ltd., outlining intentions to build a new $30-million coating plant in Camrose.
TransCanada Will Build Ontario Power Plant
The Ontario Power Authority has awarded TransCanada Corp. a 20-year contract to build, own and operate a 683-MW, natural-gas-fired power plant near Halton Hills, Ont. TransCanada expects to invest about $670 million in the generating station, slated to begin service in 2010.
Joslyn Project Begins Production
Total E&P Canada Ltd. has announced commercial start-up of a Joslyn project using steam assisted gravity drainage technology, 60 km northwest of Fort McMurray.
Deer Creek Energy Ltd., a wholly owned Total subsidiary, operates Joslyn and has an 84-per-cent interest. The Joslyn lease will use both steam assisted gravity drainage and oil sands surface mining technologies. This first development using SAGD will bring production to 10,000 bb/d of bitumen for shipment to a terminal on the Athabasca Pipeline.
Mining is planned for the first part of the next decade. In February 2006 an application was submitted to the Alberta Energy Utilities Board for the first 100,000 bb/d — the surface-mining project. It is being reviewed.
Oilpatch Spurs Strong Growth in Other Sectors
Support services for Alberta oil and gas are expected to be the fastest-growing sectors of the Canadian economy in 2007, says an economist with BMO Financial Group. Earl Sweet singled out drilling firms, seismic engineers and food contractors as areas of particularly impressive growth.
Chevron/Western Oil Sands Endorse Athabasca Expansion
Minority owners Chevron Canada Ltd. and Western Oil Sands Inc. have approved expansion of the existing Athabasca Oil Sands Project, which they own with Shell Canada Ltd. Shell had earlier approved the expansion.
Plans call for a 65 per cent expansion of the operation of the Fort McMurray-area mine and the Scotford upgrader near Edmonton. This will raise daily production by 100,000 bb/d to 255,000 bb/d and is expected to cost $10 billion to $12.8 billion. Initial projections pegged the cost at $7.3 million.
Canadarm Technology Gets Down-to-Earth Use
The federal government is looking at technology to help first-response teams at crime and terror sites assess threat levels. MacDonald, Dettwiler and Associates Ltd. of Richmond, B.C., an advanced information solutions provider, has signed a $1.5-million contract with the federal government for a prototype mobile information system.
Using technology developed for use in space on the Canadarm, the company will integrate its Instant Scene Modeler, which is a sophisticated 3-D surveillance camera, with a variety of contaminant sensors on a mobile platform. It will provide the data processing and fusion to create a real-time, 3-D view of the scene, overlaid with physical and contaminant measurements.
First responders will be able to use the system from a safe distance and then plan their courses of action. Contaminant sensors include chemical, biological, radiological and nuclear sensors.
Enbridge Ratchets Up Alberta Clipper Capacity
Enbridge Inc. intends to bump up by 50,000 bb/d the capacity
of its planned Alberta Clipper oil pipeline, which had a forecast capacity of
400,000 bb/d when announced last February.
The Alberta Clipper line would parallel Enbridge’s existing main east-west
North American line and could be in operation in late 2009 to carry output from
the Alberta oil sands.
Planned Edmonton Plant To Handle Residual Waste
Edmonton will convert up to 100,000 tonnes a year of residual waste into energy. The $87-million project will use rubbish that cannot be handled by current city recycling and composting procedures. It will mean that up to 90 per cent of waste will be reused when it reaches Clover Bar landfill, which is already the site of a methane recovery facility.
The City of Edmonton, EPCOR Utilities Inc. and
the Alberta Energy Conservation Fund will each contribute $29 million. Design
is under way and the new facility is expected to be operational in 2010.
Costs Rise for Nexen and Devon
Nexen Inc. and Devon Energy Corp. both anticipate cost increases of about a third on their Alberta oil sands projects.
Nexen says cost estimates for its Long Lake oil sands project now stand at $4.6 billion, compared with $3.6 billion in December 2005. Nexen is partnered with OPTI Canada Inc. on the Athabasca-region oil sands project.
OPTI Canada President Syd Dykstra, P.Eng., says the project
is taking longer than expected and hourly construction costs are much higher
than expected. The complex, using steam assisted gravity drainage technology,
is nearly complete and the upgrader is more than 60 per cent complete.
Meanwhile, Devon expects to spend $600 million to $700 million on a second 35,000
bb/d phase of its Jackfish SAGD project. Located about 15 km southeast of Conklin,
the first phase of the project is scheduled for completion in 2008 and to cost
$550 million.
Talisman Makes Big Alberta Discoveries
Talisman Energy Inc. has drilled what is calls “another prolific” well in the Alberta Foothills. The well tested at a rate of 14 million cubic feet per day and is expected to be tied in during the second quarter of 2007.
The company has also announced initial results from an emerging exploration play in the Ram area of west-central Alberta. The area is southwest of Talisman’s successful Central Alberta Foothills structural play.
The company has built a substantial land position of over 48,000 acres in the area. The majority of prospective gas zones are relatively shallow (less than 2,000 metres) with multi-zone potential and a hydrogen sulphide content of less than one per cent.
Natural gas resources on the Ram acreage are estimated at 200-to-300 billion cubic feet. Talisman will spend about $100 million in the area in 2007 — with a further eight wells expected to be drilled. First production is expected in the third quarter of 2007, with potential exit rates of 30-to-50 million cubic feet per day.
Alberta Earmarks $30 Million For Water Research
The Alberta Government will spend $30 million on a water research strategy focused on safe drinking water, efficient water use and healthy watersheds. The strategy was developed by the Alberta Science and Research Authority, the Alberta Water Council, the provincial government and other research partners.
The strategy outlines goals, priorities and strategies for building on the scientific knowledge gained through the Alberta Research Council, the Alberta Ingenuity Centre for Water Research, post-secondary institutions, industry, utility companies, municipalities, water basin councils, water managers, stewardship groups and other provincial government departments.
The fund will be managed through Alberta Ingenuity, which will coordinate provincial water research with national and international efforts to ensure the long-term safety, quality and sustainability of Alberta’s water resources.
Shell Frothing Over New Technology
Shell Canada Ltd. has made public Shell Enhance, the first commercial application of an innovative high-temperature froth-treatment processing technology, which the company says will reduce costs and improve oil sands energy efficiency.
Developed by Shell Canada with the help of Natural Resources Canada’s CANMET
Energy Technology Centre facility in Devon, the technology uses high temperatures
in the paraffinic froth-treatment process to more efficiently remove sand, fine
clay particles and other impurities from oil sands froth.
Shell Enhance improves energy efficiency by 10 per cent — that’s
about 40,000 tonnes of greenhouse gas per year. It also takes up less space and
uses less water than other systems, says Shell.
Major Spending Plans Announced for School Infrastructure
Under a five-year comprehensive Schools for Tomorrow plan, the Alberta Government will invest nearly $1.4 billion in school infrastructure over the next three years.
It budgets $578 million for the 2006-07 fiscal year. This includes $200 million for infrastructure maintenance and renewal funding, and $378 million for facilities infrastructure. The government will also invest $404 million in the 2006-07 for plant operations and maintenance funding.
Duke Energy Proceeds With Gas Expansions
Duke Energy Income Fund is proceeding with a $22.5-million gas plant at West Doe in northeast British Columbia. Scheduled for completion in September, the plant will process 23.5 million cubic feet of sour gas a day.
Duke also announced it is proceeding with a 25-km sour gas pipeline tied into its Gordondale East processing facility in northwest Alberta. In addition, a $5.8-million Valhalla pipeline will be in operation in April.
The trust has interests in 13 gas plants and a 43 per cent stake in Duke Energy Midstream Canada Ltd., one of the largest processors in Alberta and B.C.
CEO Doug Haughey says the recent federal policy shift on income trusts still leaves Duke Income Fund “well-positioned to deliver stable cash flow to unit holders.”
Chin Chute Wind Farm Commissioned Near Taber
Chin Chute wind farm, a joint venture of Enbridge, Suncor Energy and Acciona Wind Energy Canada, has officially opened 20 km southwest of Taber. The $60-million wind-generation project includes 20 turbines each producing 1.5 megawatts of electricity.
Correction
A Doing Business item in the November 2006 PEGG contained incorrect information. The annual energy yield of the announced Coyote Ridge Wind Park near Lethbridge is predicted at about 700 gigawatt-hours. The PEGG item left out the word hours in the measurement.