June 2007 Issue
doing business
Alberta Budget Increases Infrastructure Spending
BY NORDAHL FLAKSTAD
Freelance Writer
Under the provincial budget, Alberta Infrastructure and Transportation is earmarking $368 million for highway rehabilitation and maintenance. The ministry’s 2007-08 capital investment budget is almost $1.7 billion — an increase of $590 million or 53.4 per cent over an earlier forecast.
The added capital investment will help fund several projects, such as the previously announced Royal Alberta Museum’s renovation and expansion, the first phase of the construction of a new Edmonton remand centre and a crop research greenhouse in Brooks.
Funding will also accelerate construction of a Highway 4 bypass of Milk River, an interchange on the TransCanada and Highway 9 near Strathmore, and a new bridge on Highway 49 over the Smoky River west of High Prairie. It will also help build projects such as an upgrade of the QE II North Innisfail interchange, a QE II median widening from Crossfield to Acme Road Interchange, and a twinning of Highway 779 in Stony Plain.
ENMAX Plans Major Power Plant For Southern Alberta
ENMAX Energy intends to build a major natural gas and gas-from-coal
generation plant in southern Alberta able to supply about two-thirds of Calgary’s
electrical requirements. The proposed 1,200-MW station will use the best available
gas technology and produce 50 per cent less carbon dioxide than current coal
plants.
The company says the first phase of the plant can be built within three years, subject to finalizing construction contracts and regulatory matters. The location of the projected $2.5-billion plant remains confidential as alternatives are evaluated.
TELUS Wins Contract For High-Tech Court System
TELUS Corp. has been awarded a $16.3-million contract from the
Alberta Government to install high-tech, two-way video and audio systems in 73
Calgary courtrooms. The system allows for digital evidence and for videoconferencing
with witnesses in remote locations.
It’s been described as one of the most elaborate and technically advanced systems of its kind in the world.
Another Cost Increase For Nexen at Long Lake
Nexen Inc. has projected further cost increases for its Long
Lake oil sands projects, with the price now placed at $5 billion. The latest
anticipated cost increase of $400 million means the project price has risen by
43 per cent since the original forecast of $3.5 billion.
Long Lake, a joint venture with OPTI Canada Inc., is expected to produce 35,000 to 45,000 barrels of oil a day by the end of this year.
Flooding Delays Project, Adds Many Millions to Cost
Saskatoon’s Cameco Corp. says a flood last October will delay its Cigar
Lake project for three years and more than double, to $1 billion, development
costs. The deposit in Northern Saskatchewan contains high-grade ore valued at
$25.5 billion US.
Blasting by contract miners using improper equipment and inadequate safeguards resulted in a larger-than-anticipated opening and caused groundwater to flood the mine under development. Production from the mine, whose earlier costs were placed at $400 million, had been scheduled to start later this year.
BHP Sells Interest In Churchill Diamonds
International mining giant BHP Billiton has agreed to sell its 12.5 per cent
interest in the Churchill diamond property in Nunavut to Shear Minerals
Ltd. of Edmonton and Stornoway Diamond Corp. of Vancouver. Together,
the two purchasers already own more than 75 per cent of the northern play.
Suncor Committed To Oil Sands Investments
Suncor Energy Inc. is prepared to stay the course by investing
$5.3 billion, including $2.1 billion to build a third coker and $1.5 billion
to increase the bitumen-feed capacity at its Fort McMurray operations. This affirmation
came as the company reported a 23 per cent earning decline to $551 million for
the first quarter, when compared with the same period in 2006.
Norway Company Eyes Major Oil Sands Company
Statoil ASA of Norway has made an all-cash offer for North American Oil
Sands Corp. worth about $2.2 billion.
The Calgary-based oil sands company was formed in 2001 and about 69 per cent of its shares are held by Paramount Resources Ltd., funds managed by affiliates of ARC Financial Corp., and the Ontario Teachers’ Pension Plan.
NAOSC’s oil sands leases in northeastern Alberta hold about 2.2 billion barrels in recoverable reserves. Its Leismer demonstration project, which is in its final phase of obtaining regulatory approvals, expects to have a capacity of 10,000 bbl/d of bitumen by late 2009 or early 2010.
Alberta Invests $130 Million In Nanotechnology
The Province of Alberta will invest $130 million in the next five years in nanotechnology.
Minister of Advanced Education and Technology Doug Horner said a three-pillar strategy to foster new nanotech businesses, garner nanotech talent and build nanotech infrastructure aims to place Canada among the top five countries in nano-based economic activity.
The University of Alberta already is home to the National Institute for Nanotechnology. The province will now further nanotechnology through a new $5.5-million entity called nanoAlberta, which will guide partnerships with industry, post-secondary institutions and government. It will also look for opportunities that have the most positive economic and social impact on Albertans, Mr. Horner said.
Synenco Upgrader Placed on Hold
Synenco Energy Inc. has set aside plans for a 100,000 bbl/d
upgrader near Redwater, north of Edmonton.
Synenco, with SinoCanadian Petroleum Corp. as a minority partner, is developing the Northern Lights oil sands mining and bitumen extraction project, north of Fort McMurray. In placing the upgrader on hold, Synenco officials said possible options being considered include bringing in other partners and other “commercial ventures.”
De Beers Reaches Agreement With First Nation Members
De Beers Canada Inc. has reached an impact benefit agreement for the Snap Lake
Mine, a diamond project 220 km northeast of Yellowknife. Construction began on
the project in February 2005.
The announcement follows a community ratification vote on April 23, in which members of the Lutsel K’e and Kache Dene First Nation supported acceptance of the agreement. Under it, Lutsel K’e agrees to respect the rights, licences, permits and authorizations to construct and operate the mine.
eanwhile, De Beers will provide benefits such as training, education, employment, business opportunities and financial compensation.
This is the final of four such agreements for the Snap Lake Mine. Earlier De Beers concluded agreements with the Yellowknife Dene First Nation, the Tlicho Government and the North Slave Métis Alliance.
Total’s Efforts Begin To Bring in Upgrader
Total E&P Canada Ltd. has launched the regulatory process
to build a bitumen upgrader near Fort Saskatchewan. The subsidiary of the France-based
multinational intends to proceed with the project in two stages, starting with
production of 130,000 bbl/d of synthetic crude.
Detailed engineering is expected to begin next year and construction would depend on regulatory approval. Commissioning could occur as early as 2013-14.
Total purchased the Joslyn leases northwest of Fort McMurray from Deer Creek Energy Ltd. in 2005 and currently is developing the Joslyn North Mine Project on a site obtained as part of that acquisition.
The company is also in a 50-50 partnership with ConocoPhillips Ltd. in the Surmont property, southeast of Fort McMurray. SAGD production is expected to begin there later this year.
Husky Energy Buys Ohio Refinery
Husky Energy Inc. has bought Valero Energy Corp.’s refinery
in Lima, Ohio, for $1.9 billion US. The Lima refinery can produce 165,000 bbl/d
of light crude oil. Husky holds extensive oil sands leases in Northern Alberta.
The company is reviewing options for reconfiguring and expanding the Ohio refinery to process heavy crude oil and bitumen.
New Industrial Park For Edmonton
Calgary developer Ken Mariash intends to open a 300-hectare industrial park in
the Clover Bar area of northeast Edmonton. Aurum Energy Park will be geared for
heavy construction and warehousing facilities relating to oil sands and other
resource projects. The development could be complete as early as 2012.
Micralyne Partners With U.S. Producer Of Analysis Tools
Micralyne Inc., an Edmonton-based fabricator of micro-electro-mechanical
systems, has formed a partnership with Polychromix, a developer of innovative
inspection and analysis tools.
Located in Willington, Mass., Polychromix has developed Phazir, a hand-held device that does qualitative and quantitative analysis of materials directly at their source. It uses trademarked Digital Transform Spectroscopy technology and micro-electro-mechanical systems.
Inter Pipeline to Service Shell’s Orion Project
Inter Pipeline Fund had outlined plans for the Cold Lake Pipeline
Limited Partnership to invest $11 million in transportation service to the Shell
Canada Ltd. Orion oil sands project in east-central Alberta.
New pipeline and related facilities will carry 13,500 bbl/d of blended bitumen from the first phase of the Shell Canada Orion project. Shell Canada has the option to transport up to 30,000 bbl/d of blended bitumen through the phased expansion of Orion.
The Inter Pipeline investment involves a new lateral consisting of two five-km pipelines and associated facilities to be built between the Orion project and the Cold Lake pipeline system near Bonnyville. The six-inch pipeline providing diluent service and the 12-inch pipeline supplying bitumen-blend service are to be completed by the third quarter of 2007.
EUB Sets Dates For Hearings On Montana Alberta Tie
The Alberta Energy and Utilities Board has set July 24 as the start of hearing
applications on the Montana Alberta Tie Ltd. proposal to construct and operate
a 240-kV merchant power transmission line from the Lethbridge area to the U.S.
border.