FEBRUARY 2005 ISSUE
doing business
Shell Announces Major Alberta Gas Find
Shell Canada Ltd. has announced what is being described as Alberta's most significant gas discovery in two decades. Located in previously untested structures 30 kilometres southwest of Rocky Mountain House, the sour-gas find could contain 500 to 800 billion cubic feet of original raw gas in place, Shell estimates.
The gas contains approximately 60 per cent methane and 35 per cent hydrogen sulphide. Additional delineation drilling is needed to confirm the amount of gas in place and recovery factors.
The exploration well, owned by Shell (75 per cent) and Mancal Energy Inc. (25 per cent), was drilled to 5,100 metres. The discovery relied on special three-D seismic technology.
Coal Producers Secure Long-Term Asian Sales
Asian steelmakers continue to eye Western Canada as a long-term, secure source of supply for metallurgical coal.
Among those benefiting from the trend is Grande Cache Coal Corp. It has inked a three-year deal under which, starting April 1, two-thirds of its production will go to South Korean and Japanese steelmakers.
The Calgary-based company, which resumed production last year of what had been idled coal operations in Grande Cache, will sell 1.3 million tonnes of coking coal to Asia purchasers, including POSCO of South Korea. The coal is being sold at $125 US a tonne — twice the price fetched a year ago.
Fording Canadian Coal Trust and Teck Cominco Ltd., members of the Elk Valley Coal Partnership, have reached similar long-term pacts. Under these 10-year arrangements, POSCO and Japan Nippon Steel Corp. will also get a piece of the action; they acquire 2.5 per cent interests in the partnership's Elkview mine in southeastern B.C.
Fording President Jim Popowich, P.Eng., says: “The long-term nature of this agreement is of great value to Elk Valley Coal and the unit holders of Fording Coal Trust, while providing capital necessary to accelerate expansion plans at the Elkview mine.”
Great Divide MonikerGiven to Oil Sands Project
Connacher Oil and Gas Ltd. will seek government approval to build a 10,000-barrel-a-day oil sands pilot plant by next year. Located 80 km south of Fort McMurray and adjacent to Highway 63, the $150-million facility will operate under the name Great Divide.
Edmonton Takes Plunge Into Wet-Lab Facility
The City of Edmonton is supporting a multi-tenant, biotechnology business development to meet needs of smaller biotech firms seeking a suitable commercial setting. A lack of leaseable commercial sites with amenities, including wet labs, often forces biotech startups to improvise in inadequate surroundings such as warehouses.
Spearheaded by Edmonton Economic Development Corp., the $14.2-million, 6,400-square-metre facility would be built next to the Advanced Technology Centre in Edmonton Research Park. The city will finance more than half the total cost through a $1-million donation and an $8-million loan, with the remainder coming from federal, provincial and private-sector sources.
Producers Compensated For Shut-in Gas Wells
The Alberta Government will compensate gas producers with $95 million in forgone royalities for doing their part to protect oil sands mining. The money is being paid out because of the shut-in production arising from an Alberta Energy and Utilities Board decision to limit gas activity where it could threaten oil sands development.
Susan Riddell Rose, P.Geol., president of Paramount Energy Trust, one of the affected gas producers, says producers will continue through technical hearings with the AEUB to open gas sites affected by the shut-in order.
EPCOR Subsidiaries Active On Wind and Water Fronts
Through its subsidiary, EPCOR Power Development Corp., EPCOR Utilities Inc. will build a new 39.6-MW wind farm on the shores of Lake Huron, near the community of Goderich, Ont. Pending final regulatory approvals, construction of Kingsbridge Wind Power Project will begin in early 2005.
In another development, EPCOR Water Services has announced a three-year agreement with the Town of Picture Butte, north of Lethbridge. Under the agreement, EPCOR will provide water services that include around-the-clock, continuous monitoring of the town's water and wastewater systems.
Bentall Building Tower In Downtown Calgary
Work is expected to begin immediately on the first of two towers of a $130-million high-rise in downtown Calgary. To be located at Second Street and Third Avenue S.W., the complex is being built by Bentall Real Estate Services. Named after Calgary pioneer Sam Livingston, it will include a parkade, a 21-storey tower and 39,600 metres of space.
EnCana Considers Shipping Bitumen To U.S. for Upgrading
EnCana Corp. is partnering with American refiner Premcor Inc. to convert an existing Ohio refinery for the upgrading of Northern Alberta bitumen. The partners are each prepared to invest $1 billion US in the project — if technical studies prove it's feasible. The conversion would cost about half
as much as building a new upgrader in Alberta, the part-ners estimate.
TransAlta Alters Keephills Power Plans
TransAlta Corp. will downsize and postpone a planned Keephills coal-fired generator, west of Edmonton. The previously announced project's capacity will be halved to 450 MW. The plant will also incorporate environmentally beneficial “supercritical technology” used in EPCOR's recently completed Genesee 3 generator, in which TransAlta has a 50-per-cent interest.
In the face of indications that Alberta has a 30-per-cent power surplus, TransAlta expects to postpone construction until 2008 of a plant now forecast to cost $750 million. The estimate was $1.8 billion for the larger version.
Meanwhile, on Dec. 31 TransAlta shut off two aging generators at Lake Wabamun. Their capacity was 119 MW.
Alberta Still Eyes Single Regulator For Resources
The Alberta Government appears to be moving toward recommendations that it adopt a single-agency approach for natural resources regulation. The proposal — floated in a 2002 report by a former Alberta deputy environment minister, Vance MacNichol, P.Eng. — has received a less-than-enthusiastic response from some environmental groups.
But industry groups, including the Canadian Association of Petroleum Producers, have urged adoption of a one-window approach in dealing with areas now falling under several agencies, notably the departments of energy, sustainable development, and environment, and the Alberta Energy and Utilities Board.
Tolko Set To Expand In Alberta
Tolko Industries Ltd. expects to spend $220 million to expand the Slave Lake oriented strand board plant it bought from Weyerhaeuser Canada Ltd. a year ago.
Site selection and engineering are underway for the project, which comes on top of upgrading underway at Tolko's High Level lumber mill. According to a news release, the privately owned forestry company from Vernon, B.C., is weighing a number of other capital projects, including work at its existing High Level oriented strand board facility.
In a related development, Tolko has announced that it has signed a pioneering joint forest tenure agreement with the Whitefish Lake First Nation. The agreement provides for joint management of 1,119 square kilometres north of the Whitefish Reserve and about 110 km north of High Prairie, where Tolko also has an OSB mill.
Chinese Official Confirms Interest in Canada's Oil Sands
A senior official of China's Sinopec International Petroleum Exploration and Production Corp. has confirmed Chinese interest in acquiring an ownership position in Canada's oil sands.
Speaking to the Canada-China Business Council, Sinopec Vice-President Qui Xianghua noted that his country has 21 per cent of the world's population but just 1.8 per cent of global oil supplies.
He added that Canada's oil sands are “a remarkable resource and we currently are investigating them.” Investing in Canada would benefit both nations, said the Sinopec executive.
Devon Looks To Beaufort
A few months after selling off substantial portions of its Canadian production properties, Devon Energy Corp. has unveiled plans for an ambitious drilling program in the Beaufort Sea next winter.
The Oklahoma company plans to spend $80 million on the venture in the first year. According to information filed with the National Energy Board, it plans to target nine offshore drilling locations, as well as one on an island in Mason Bay.
Canfor to Shut Hines Creek Mill
Canfor Corporation will close its Hines Creek sawmill on June 30 and consolidate its current operations at its existing Grande Prairie mill. Municipal officials in the Hines Creek area have objected to the closure, expected to lead to loss of close to 100 mill jobs. Canfor points to lack of a sufficient local lumber supply as a cause.
Weyerhaeuser Plans Upgrades to Mill At Grande Prairie
Weyerhaeuser Canada Ltd. will spend $160 million to improve its pulp mill at Grande Prairie. The improvements, which include reconstructing the mill's boiler, will add 30,000 tonnes to the plant's current 350,000-tonne annual capacity.
The upgrades will yield environmental benefits and added cogeneration, with resulting electricity being fed into the Alberta power grid. Construction is scheduled to begin this spring, with completion projected for 2007.
Shaflik Engineering Links With Stantec
Shaflik Engineering Ltd. of Vancouver is among the latest firms to join the Stantec group. For 40 years Shaflik has specialized in the planning, design and construction engineering of all electrical engineering aspects of power distribution control systems, electrical and lighting systems for sports and transportation facilities, and intelligent transportation systems.
Stantec has worked with Shaflik, a seven-member firm, on the design of the bobsleigh, luge and skeleton facilities in preparation for the 2010 Olympic Winter Games.
Agrium Settles For $100 Million-Plus With Unocal
Under a settlement of a long-standing natural-gas dispute with Union Oil Company of California, Calgary-based fertilizer producer Agrium Inc. will receive benefits worth $105 million US.
Key settlement components include:
• establishing a definitive gas supply obligation from Unocal to Agrium's Kenai, Alaska, facility until Oct. 31, 2005.
• providing Agrium $47 million US in recognition of reduced future gas deliveries, environmental and other liabilities.
This $105-million settlement is in addition to the $50 million US Agrium received from Unocal in 2004 based on an earlier arbitration panel ruling.
Tahera Expands Diamond Search
Toronto-based Tahera Diamond Corp. plans to double 2004 spending — to almost $6 million — on diamond exploration this year. Much of its effort will focus on the Jericho diamond project, 420 km northwest of Yellowknife. Tahera intends to develop its wholly owned Jericho project as Nunavut's first diamond mine.
Tahera aims to increase the diamond-reserve base within an economic radius of the Jericho project, while also advancing the company's other significant exploration projects.
Following the recent equity and debt financings, Tahera believes it is positioned to complete construction of the Jericho project. Plans call for completion of permitting activities and commencement of construction early this year.
Acclaim Energy Well Brought Under Control
Almost a month to the day after it blew, a sour-gas well just west of Edmonton owned by Acclaim Energy Trust was brought under control by GSM Inc., a Texas-base firm specializing in relief wells. The well started leaking Dec. 12 while attempts were made to bring it back into production. The leak resulted in evacuation of 700 residents of the nearby Enoch First Nation.
Author Credits
BY NORDAHL FLAKSTAD
Freelance Writer