Canada: Oh Canada - Significant Developments in Canadian Energy - December 2011

Last Updated: January 18 2012
Article by National Renewable Energy Group

Oil Sands News

Athabasca Oil Sands Corporation ("AOSC") received regulatory approval from both the Energy Resources Conservation Board (ERCB) and Alberta Environment & Water for phase one of its MacKay River steam‐assisted gravity drainage (SAGD) oil sands project. SNC-Lavalin has been awarded the engineering and procurement services contract for the 35,000 bpd of bitumen facility, construction of which is slated to begin in the third quarter of 2012, with first production expected in 2014. Following the exercise by AOSC of its option to divest its entire 40% interest, the project is now 100% owned by Cretaceous Oilsands Holdings Limited, a subsidiary of PetroChina.

Cenovus has filed an application with the ERCB for its Pelican Lake Grand Rapids project. The 180,000 bpd facility will employ SAGD, and may involve co‐injection of light hydrocarbons or solvent‐aided processes, where economically feasible. Cenovus expects to receive regulatory approval in the first quarter of 2014, with construction of the three phases of the project to commence in 2014 (Phase A), 2017 (Phase B), and 2020 (Phase C), respectively. The company projects first steam injection to commence for Phase A in 2017, Phase B in 2021 and Phase C in 2024. The project is predicted to consist of up to 3,700 well pairs from as many as 200 well pads over its projected 40 year life.

Imperial's board of directors has approved an $8.9 billion expansion phase for the company's Kearl oil sands project. The initial phase of the project, sanctioned in 2009, is expected to come on production late in 2012, with the 110,000 bpd expansion phase slated to come online late in 2015, which together with future debottlenecking operations will bring the total production from the facility up to 345,000 bpd of bitumen. The company reported that this expansion phase at Kearl represents an important step toward its goal of doubling production to approximately 600,000 bpd by 2020.

East Coast News

NWest Energy, a Canadian based resource company, was granted approval from the Canada‐Newfoundland and Labrador Offshore Petroleum Board to consolidate the company's four exploration licences located offshore western Newfoundland. The consolidation will permit NWest Energy to focus its resources on the near shore development of the Green Point oil shale unconventional resource and will allow for testing of the unconventional resource by drilling from onshore locations. Although further work is required to confirm the potential for commercially viable resource recovery and exploration of the Green Point unconventional resource is still in its early stages, the Green Point shale has been proven as an oil source rock in the region. According to the AJM Petroleum Consultants' recent report, the undiscovered petroleum initially‐in‐place resource was estimated at 18.8 bbbls.

West Coast News

Enbridge has acquired a 71% interest in the first two phases of the Cabin Gas Plant Development, which will process 800 mmcfpd of natural gas and involve a total investment by Enbridge of roughly $1.1 billion. Horn River producers have already fully taken up 100% of the capacity of both Phases 1 and 2. Construction of the 400 mmcfpd Phase 1 is already underway, and the company anticipates that the plant will be in service in the third quarter of this year. Phase 2 has received regulatory approval and will provide an additional 400 mmcfpd when it comes into service, which is expected to be in the third quarter of 2014.

Quicksilver has entered into a midstream partnership with Kohlberg Kravis Roberts & Co. LP (KKR) for the construction and operation of natural gas gathering, transportation and processing infrastructure to serve British Columbia and the Northwest Territories. KKR invested $125 million into the project for a 50% stake, and Quicksilver, as operator, will contribute its existing 32km 20‐inch gathering line and compression facilities and associated 10 year gas delivery contracts. Quicksilver will also dedicate current and future production from its Horn River plays to the project. The partnership agreement establishes an area of mutual interest (AMI) over 30 million potential acres in the Horn River, Liard and Cordova basins, which AMI includes third‐party transportation and processing infrastructure and agreements.

Canadian Arctic News

The NEB published a report entitled "The Past is Always Present – Review of Offshore Drilling in the Canadian Arctic, Preparing for the Future." The report highlights its key findings during an 18 month review of Arctic safety and environmental offshore drilling requirements, and was undertaken in response to the oil spill in the Gulf of Mexico. After holding more than 40 meetings in 11 communities with northern residents, companies and environmentalists, the NEB concluded that a ban on offshore drilling in the Beaufort was not necessary due to the adequate tools available to protect the Arctic environment and its people. The NEB also concluded that it would maintain the current same‐season relief rule, which requires companies seeking to obtain a drilling permit to demonstrate that they would be able to complete a relief well and cap a blowout in the same season, if necessary. The NEB also expressed, however, that it will allow companies to depart from the rule by demonstrating alternative means that "meet or exceed the intended outcome of the policy." The report was published as a companion document to the filing requirement for Arctic offshore drilling on December 15, 2011. More information about the report can be found on the NEB website at: rthnb/pplctnsbfrthnb/rctcffshrdrllngrvw/fnlrp rt2011/fnlrprt2011-eng.html

Alternative Energy

Finaverna, a wind energy development company, and the McLeod Lake Indian Band have executed a memorandum of understanding (MOU) for the development of two wind energy projects in the Peace Region of British Columbia. The Tumbler Ridge and Wildmare Wind Energy projects will total 124 MW of wind capacity for the region. The MOU sets out the processes and sharing of benefits for future wind projects and facilitates conversations between the partners for the proposed 117 MW Meikle and 60 MW Bullmoose projects in the same region.

The year 2011 marked a banner year for wind installations in Canada. With more than double the installations from 2010, wind installations in Canada totalled 1.4GW, placing the country ninth globally in terms of total installed capacity according to the Canadian Wind Energy Association. It is estimated that developers of wind energy spent close to $3.5 billion installing turbines in 2011 and it is expected that more than 6GW of wind capacity has been contracted for the next 5 years.

On the Horizon

Total announced that it has received an Order in Council from the federal government for its Joslyn North oil sands mine project, which represents the final stage of the regulatory approval process. Total is operator of the project, and holds a 38.25% stake, along with its joint venture partners, Suncor (36.75%), Occidental Petroleum Corporation (15%) and Inpex Corporation (10%). Initial production is expected to commence in 2018 at approximately 100,000 bpd of bitumen, with the potential to expand to 200,000 bpd. The $9 billion project will be the fifth oil sands mine in Alberta's Athabasca oil sands, and will increase the approved mineable area in the province by approximately 7%.

Enbridge Bakken Pipeline Limited Partnership received National Energy Board (NEB) approval for its Bakken Pipeline Project. The $180 million project involves the construction and operation of a new 123km 16‐inch pipeline running between Steelman, Saskatchewan and the Enbridge Pipelines mainline in Cromer, Manitoba, along with the acquisition and operation of the existing 34km Enbridge Westspur Line EX‐02.

Enbridge Bakken has already received firm commitments from shippers for nearly 70% of the pipeline's notional 148,500 bpd of oil capacity, which capacity is readily expandable to 345,000 bpd. Construction of the pipeline is scheduled to commence in the third quarter of 2012, and the pipeline is expected to be online in early 2013. Abbreviations

In this newsletter, all dollar amounts are Canadian dollars unless otherwise stated. We have also used the following abbreviations: bpd ‐ barrels per day; mmcfpd ‐ million cubic feet per day; bcfpd ‐ billion cubic feet per day; tcf ‐ trillion cubic feet; bbl ‐ barrel; mbbl ‐ thousand barrels; mmbbl ‐ million barrels; bbbl ‐ billion barrels; boe ‐ barrels of oil equivalent; MW ‐ megawatts; kV ‐ kilovolt; km ‐ kilometer; KW ‐ kilowatts; KWh-kilowatt hours; cmpd ‐ cubic meters per day; GJ ‐ gigajoule.

About Fraser Milner Casgrain LLP (FMC)

FMC is one of Canada's leading business and litigation law firms with more than 500 lawyers in six full-service offices located in the country's key business centres. We focus on providing outstanding service and value to our clients, and we strive to excel as a workplace of choice for our people. Regardless of where you choose to do business in Canada, our strong team of professionals possess knowledge and expertise on regional, national and cross-border matters. FMC's well-earned reputation for consistently delivering the highest quality legal services and counsel to our clients is complemented by an ongoing commitment to diversity and inclusion to broaden our insight and perspective on our clients' needs. Visit:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions