October 2005 ISSUE
DOING BUSINESS
Horizon Clear For Landings and Departures
BY NORDAHL FLAKSTAD
Freelance Writer
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Build it and They will Come |
Canadian Natural Resources Ltd. has opened its 6,000-foot paved runway, built to bring construction workers in by air to its Horizon oil sands project, 70 km north of Fort McMurray.
The airstrip will handle the arrival and departure of up to 400 workers a day. According to CNRL CEO Steve Laut, P.Eng.: “The airport will move people in and out efficiently. Workers’ travel time will be much less, much more safe, and most importantly they will have a better quality of life.”
In another development, CNRL has reached a 25-year agreement calling for twinning by Pembina Pipeline Corp. of its Athabasca Oil Sands Pipeline. The $290-million expansion will transport production from CNRL’s Horizon site at a rate of 110,000 bb/d in 2008 and then 232,000 bb/d by 2012. Construction on the pipeline will begin next year.
Teck Cominco
Buys Into Fort Hills
Teck Cominco Ltd. is bringing its vast mining experience to oil sands extraction
by obtaining a 15 per cent interest in the $5-billion Fort Hills project, under
development by Petro-Canada and UTS Energy Corp.
In March, Petro-Canada bought into the project, which is scheduled to produce
100,000 barrels of oil per day in 2010. Teck Cominco will pay $475 million for
its share.
The company is the world’s leading zinc miner and a major copper, gold
and metallurgical coal producer.
Suncor Energy
On Rebound Following Fire
Suncor Energy Inc. says it has recovered from a Jan. 4 fire that curtailed production
at its Fort McMurray facilities. The company stands to receive $197 million
from its business interruption coverage and $55 million through property insurance.
At the end of August, Suncor’s average daily output from oil sands operations was 133,000 barrels, compared to 225,000 bb/d before the fire. Overhauls done during the fire recovery and additional mine work open the way for production of 260,000 bb/d by year-end.
EPCOR Shuts Clover Bar
EPCOR Utilities Inc. was set to begin decommissioning its Clover Bar Generating
Station in Edmonton this month. Expected to take two years or more, decommissioning
comes in response to a Balancing Pool decision earlier this year to terminate
its Clover Bar power purchase arrangement with EPCOR effective Oct. 1.
Each of four units, commissioned in the 1970s, has a capacity of 165 MW.
Enbridge, Suncor
Team Up On Wind Project
Enbridge Inc. has joined Suncor Energy
Products Inc. and EHN Wind Power Canada
Inc. to build a 30-MW wind power plant west of Taber. Enbridge will pay one-third
of the cost for a one-third interest in the proposed $60-million Chin Chute project.
The project would consist of 20, 1.5-MW wind turbines to be operated by EHN, the renewable energy subsidiary of the Spanish ACCIONA Group.
The wind farm is expected to be in service in late 2006.
Spar to Keep
U.S. Coast Guard Hercs In Air
Under a contract to service its C-130 aircraft, the U.S. Coast Guard will pay
Spar Aerospace Ltd. of Edmonton $20 million.
EnCana Selling
Ecuador Interests
EnCana Corp. is selling its oil and pipeline interests in Ecuador to Andes Petroleum
Co., a joint venture of Chinese petroleum companies, for approximately $1.42
billion US. EnCana has been active in Ecuador since 1999.
President and Chief Executive Officer Gwyn Morgan, P.Eng., describes the sale as part of an effort that has seen EnCana divest more than $10 billion in non-core assets to focus on unconventional natural gas and oil in North America.
Enbridge Pushes Ahead
With Waupisoo Pipeline
Enbridge Inc. has reached agreement on long-term shipping commitments via the
Waupisoo Pipeline with ConocoPhillips Canada, Petro-Canada, Suncor
Energy Inc. and Total E&P Canada Ltd. Enbridge will construct the 30-inch diameter, 380-km,
$400-million pipeline to transport crude oil from the Alberta oil sands to Edmonton-area
refineries.
The line will have an initial 350,000 bb/d capacity, rising to a maximum of 600,000 bb/d.
It is expected to be operational in mid-2008. Enbridge is including a separate 16-inch, $200-million, diluent return line within the scope of the project.
Enbridge has also reported more interest than anticipated from potential users of a proposed $1.6-billion condensate pipeline, one element of the Gateway Project. The latter also involves a crude oil export pipeline to transport crude oil from Edmonton to Kitimat or Prince Rupert to service U.S. West Coast markets and Asia-Pacific refiners.
Stantec Builds LEED
With Keen Addition
Keen Engineering Ltd., a Vancouver-headquartered consulting firm with a
strong reputation in green-building design, is joining forces with the Stantec
Group.
Keen has approximately 275 employees and 10 offices in Canada, including one in both Edmonton and Calgary, and two in the United States. It offers particular expertise in sustainable mechanical, electrical, and plumbing design for buildings and facilities.
Keen has 163 professionals accredited in Leadership in Energy and Environmental Design. When combined with current Stantec employees with similar accreditation, it will give Stantec more than 280 LEED-accredited employees.
Sales Up, Jobs Down
In Forest Sector
The value of Alberta’s forestry production increased by nearly $1 billion
between 2000 and 2003, reaching $9.3 billion last year.
The Alberta Forest Products Association and Alberta Sustainable Resource Development issued the figures in a recent report. While sales increased, during the same period employment in Alberta’s forestry sector declined to 48,400 from 54,000.
Chinese to Buy PetroKazakhstan
PetroKazakhstan Inc., which is headquartered in Calgary but whose field operations
are confined to Kazakhstan, has agreed to a $5.02-billion takeover by the China
National Petroleum Corp.
Prior to announcement of the sale, Oil and Natural Gas Corp., the Indian state oil company, had signalled interest in acquiring PetroKaz. The company has a reported 550 million barrels in reserves but has experienced difficulties in dealings with the government of the former Soviet republic.
Costs Could Stifle
Drilling Activity, Report Warns
A report from the Ziff Energy Group warns that high drilling costs could jeopardize
the viability of natural gas drilling in Western Canada.
The Calgary consulting firm notes that the combined cost of drilling and well completion in the Western Canada Sedimentary Basin will reach $15 billion this year. Current completion costs of $3.80 per thousand cubic feet of gas compare with $1.90 a decade ago.
Epcor Power LP
Now Traded On TSX
EPCOR Utilities Inc., after gaining a 30.6 per cent controlling interest in TransCanada
Power LP (renamed Epcor Power LP), has moved its subsidiary’s office from
Calgary to Edmonton.
The former TransCanada Power, L.P., a limited partnership organized in Ontario in 1997, owns natural gas, small-scale hydro and biomass plants in Ontario, British Columbia, New York and Colorado, with a total capacity of 744 MW. It has traded on the Toronto Stock Exchange and effective Sept. 6 continued to be traded, but under the name Epcor Power LP.
Shear Drilling Yields Diamonds
Shear Minerals Ltd. of Edmonton, along with its partners Stornoway Diamond Corp.
and BHP Billiton Diamonds Inc., has announced that drilling on its Churchill
diamond property in Nunavut has led to recovery of diamonds from three of 11
kimberlites.
As of late August, the joint venture had drilled a total of 38 holes into 33 targets and discovered 13 kimberlites. A further 15 targets remain to be tested in this year’s drilling program.
Ipsco Expands In Calgary, Regina
Steelmaker Ipsco Inc. will expand the tubular goods, heat-treat capacity at its
Calgary plant. It will also increase its casing product range through modifications
to tubular operations at both its Calgary and Regina pipe mills.
The Calgary heat-treat facility’s capacity will increase by more than 70 per cent in an expansion is expected to be completed by year-end. The investments form part of Ipsco’s $100 million overall expansion budget for 2005.
In another development, Ipsco reported its Mobile, Ala., steelworks sustained minimal damage from Hurricane Katrina and returned to normal production in two days.
Precision Drilling
To Become Trust
Precision Drilling Corp. plans to reorganize into an income trust and will make
a sizeable payout to existing shareholders.
The conversion had been expected following the sale earlier this summer of Precision’s energy services division and international contract drilling division to Weatherford International Ltd. In addition to receiving one share of the trust for each Precision share, share-holders will divide $850 million in cash and 26 million Weatherford common shares.
NOVA and Quantiam
R&D Co-operation Leads
To Federal Research Grant
As part of a $12.2 million investment through Technology Partnerships Canada,
the federal government will provide $3.5 million to Edmonton’s Quantiam
Technologies Inc. The funds will be applied to research and development
on new, nanotechnology-based coatings to be used in the production of olefins.
Under this initiative, Quantiam is working with NOVA Chemicals Corp.