Canada: Oh Canada - Significant Developments In Canadian Energy - January 2012

Last Updated: February 22 2012
Article by National Renewable Energy Group

Oil Sands News

1. Sunshine Oil Sands is considering an initial public offering to raise the $500 million required for construction of the first phase of the company's West Ells oil sands project. The 10,000 bpd bitumen project will be constructed in two phases of 5,000 bpd each, and the project is expected to eventually produce 100,000 bpd of bitumen from the Wabiskaw zone for an 18 year period. First steam is projected for 2013, and the project is anticipated to have a productive life in excess of 50 years.

1. A new entity, SilverWillow Energy, will be formed out of Teck Resources' commitment to buy SilverBirch Energy for $435 million. Teck, which already has a 20% interest in the Fort Hills project owned by Suncor and Total, will acquire SilverBirch's 50% stake in the Frontier oil sands project. Frontier has an anticipated lifetime production of 2.8 bbbl and is projected to produce in excess of 74,000 bpd of bitumen by 2021, which production is expected to further increase to more than 277,000 bpd in 2030.

1. Grizzly Oil Sands announced that it will acquire Petrobank's May River oil sands property for $225 million. May River incorporates 18,250 hectares of high quality oil sands leases with estimated probable reserves of 90.6 mmbbl in respect of the leases and 624 mmbbl of best estimate contingent resources with respect to SAGD development. The company intends to develop May River using SAGD and its ARMS (advanced, relocatable, modular, standardized) development model, which model will also be employed at its Algar Lake SAGD project when it comes online in 2013. Pending regulatory approval, the May River transaction is expected to close at the end of February.

East Coast News

2. Shell is adding to its previous experience in deepwater oil and gas exploration offshore Nova Scotia with its successful bid for four 9 year leases located approximately 200 kilometres southeast of the province. The bid of $970 million represents the amount that the company will invest in exploration during the first six-years of the leases. Shell plans to complete seismic in 2013 and to drill in 2014. According to Canada's Minister of National Defence and Regional Minister for Nova Scotia, Peter MacKay, "[t]his bid is an example of the reinvigorated interest in Nova Scotia's oil potential, which could be as much as eight billion bbls of oil." In 2011, Nova Scotia completed a two-year, $15 million study which estimated that the province's offshore resources potential was 102 tcf of natural gas and eight billion bbls of oil.

3. Repsol has upheld its commitment to expanding its presence in Canada's east coast by concluding agreements with Statoil and Chevron to conduct exploration activities in Orphan Basin and Flemish Pass Basin, offshore Newfoundland and Labrador. Repsol, Statoil and Chevron will participate in a farm-out arrangement in a planned 2012 exploration well in Orphan Basin, where Chevron, as operator, will have 65 percent equity interest, Repsol will have 20 percent interest and Statoil will have 15 percent interest. Similarly in the Flemish Pass Basin, the parties will explore two exploration parcels where Statoil, as operator, will have 50 percent equity interest, Chevron 40 percent, and Repsol 10 percent.

West Coast News

4. PetroChina has signed a binding agreement to acquire a 20% stake in Shell's Groundbirch lands and assets in northeast British Columbia. The price of the deal remains undisclosed, but is speculated to be in excess of $1 billion. Shell acquired its 100% interest in Groundbirch through a $5.9 billion takeover of Duvernay Oil Corp. in 2008. Shell, along with joint venture partners Korea Gas Corp., Mitsubishi Corp. and China National Petroleum Corp., is now considering a possible liquid natural gas (LNG) export terminal at the Kitimat marine terminal it acquired from Cenovus last year.

5. BC LNG received approval from the National Energy Board for a license to export LNG near Kitimat, British Columbia. The license is the second of its kind, following on the heels of the license granted to Kitimat LNG last year, and will permit the export of 36 million tonnes of LNG over 20 years, with a maximum of up to 1.8 million tonnes of LNG per year. The project, currently comprised of 13 members, will operate as a cooperative made up of LNG buyers, marketers and natural gas producers who will bid to purchase LNG or provide natural gas to be liquefied.

Canadian Arctic News

6. A joint venture between Statoil and Chevron has added new lands to Statoil's extensive Arctic portfolio. Pursuant to a farm-out arrangement between the parties, Statoil and Chevron will participate in a Beaufort Sea 3D seismic program in the Beaufort Sea in northern Canada. The program is estimated to occur in the summer of 2012.

Alternative Energy

7. Capital Power has awarded the construction contract for the Halkirk Wind Project to RES Canada, a leader in the development and construction of renewable energy projects in Canada. Currently the largest wind project under construction in Alberta, the 150 MW Halkirk Project will generate electricity for an estimated 50,000 average local homes. The project is located near the town of Halkirk, in central Alberta. The estimated construction completion date is set for Q4 of 2012.

8. Windstream, a Canadian commercial wind power developer, signed a binding agreement with Siemens for the supply of 130 2.3MW turbines. Windstream intends to use the turbines for its 300MW offshore wind power project off the southwest shore of Wolfe Island, in eastern Lake Ontario. In the spring of 2010, Windstream won a 20 year offshore wind power purchase contract with the Ontario Power Authority (OPA) under its feed-in tariff (FIT) program. Pursuant to the agreement with Windstream, Siemens has agreed to manufacture rotor blades for the turbines at its plant in Tillsonburg, Ontario. This term guarantees Windstream will meet its 50 percent OPA Ontario content requirement under the FIT contract.

On the Horizon

MEG Energy has received conditional approval from the Energy Resources Conservation Board for a three phase expansion of its Christina Lake facility which will bring total production up to 210,000 bpd of bitumen. Pending cabinet and Alberta Environment and Water approvals, the project is slated to be completed by 2020, with each of the three 50,000 bpd expansion phases set to commence in 2014, 2016 and 2018, respectively. In advance of that expansion, construction remains ongoing at Phase 2B, which is expected to bring production at Christina Lake up to 60,000 bpd by 2013.


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