Canada: Oh Canada - Significant Developments In Canadian Energy, June 2012

Oil Sands News

1. A commercial development application has been filed by BlackPearl Resources with the Alberta Energy Resources Conservation Board ("ERCB") for a $2.8 billion steam assisted gravity drainage ("SAGD") project in northwest Lac La Biche County. The 80,000 bpd project is expected to have up to 69 well pads over its lifespan, and will be constructed in three phases between 2013 and 2021. An independent reserves evaluation of the project has assigned a total proved plus probable reserves figure of 182 mmbbl to the first phase of the project, slated to begin construction at the end of 2013, with a further best‐estimate contingent resource figure of 476 mmbbl to the remainder of the project.

1. Alberta Oilsands announced an assignment of 119 mmbbls of best estimate bitumen contingent resources for its Grand Rapids property near Fort McMurray. The assignment, in addition to its previous total company best estimate of 373 mmbbl, represents an increase in total company best estimate contingent resources of 32%, totalling 492 mmbbl of bitumen. Alberta Oilsands is formulating a continued exploration program for the Grand Rapids property, with 20 core holes expected to be drilled during the 2012‐13 winter drilling season.

1. In a $20 million transaction expected to close in the third quarter of 2012, AltaGas has agreed to acquire a 50% interest in Quatro Resources' midstream assets, including its 87% interest in the 75 mmcfpd Gilby gas plant. AltaGas intends to build a 70 km pipeline to connect the Gilby facility and its 30 mmcfpd Sylvan Lake to its deepcut, turbo expander facility at the Joffre ethane extraction plant. The additional volumes earmarked for the pipeline and Joffre facility are supported by a long term fee‐for‐service contract and are expected to utilize all of the Joffre facility's excess capacity. The pipeline is expected to cost $100 million and is scheduled to be completed by the end of 2013.

East Coast News

2. Statoil has discovered a resource volume of approximately 100‐200 million bbls of recoverable oil equivalents in the Flemish basin, offshore Newfoundland and Labrador. The discovery occurred at the Mizzen exploration well, which is operated by Statoil and owned jointly with partner Husky Energy. With a view to become a prominent producer offshore Newfoundland, Statoil aims to drill two new wildcat wells in the area between 2012 and 2013, and potentially drill additional wells in 2014.

West Coast News

3. Transcanada Corporation has been selected to design, build, own and operate an estimated $4 billion pipeline by Shell Canada and its partners Korea Gas Corporation, Mitsubishi Corporation, and PetroChina Company Limited. The proposed Coastal GasLink project will be 700 kilometers of large diameter pipe with an initial capacity of 1.7 bcfpd, and will transport natural gas from the B.C. Montney, Horn River and Cordova basins and elsewhere in the Western Canadian Sedimentary Basin to a delivery point at the LNG Canada liquefied natural gas export facility near Kitimat, B.C. The Coastal GasLink project will also provide options for shippers to access gas supplies through an interconnection with the Transcanada Nova Gas Transmission System and liquid Nova Inventory Transfer trading hub. A contractual extension of the Nova System to Vanderhoof, B.C., which will utilize capacity on the Coastal GasLink pipeline, has also been proposed and would allow the Nova System to offer delivery service to interconnecting natural gas pipelines serving the West Coast.

Canadian Arctic News

4. Apache stunned natural gas investors with a natural gas discovery just south of the Yukon and Northwest Territories in northern British Columbia. The discovery is estimated to be 22 mmcfpd from one well in a shale formation. Apache may have made one of the world's largest shale‐gas discoveries. Apache drilled three wells into its leased acreage in the Liard Basin, which is a sub basis of the Mackenzie basin. The Liard basin covers 1.25 million hectares; Apache, the largest player in the remote northern region, has drilling rights to 180,000 hectares, a little over 15%, about 430,000 acres. The wells have already been connected to pipelines in the region and the gas is sold. The wells tapped into a massive shale‐gas reservoir so large it could potentially supply U.S. demand for almost two years.

Alternative Energy

5. Samsung, headquartered in South Korea, is expanding its unprecedented private‐sector investment into Ontario's renewable energy industry through its recent partnership with Six Nations, a First Nations community in Ontario to build the Grand Renewable Energy Park ("GREP") near Lake Erie. The GREP, with the assistance of developer Pattern Energy, one of Canada's leading wind and transmission companies, and Kepco, a Korean manufacturer of power supplies, is expected to consist of a 150 MW wind project and a 100MW solar project.

6. Mustus Energy, a clean‐energy company that uses residual wood from forest industry facilities in a clean combustion process, has announced that Shell, a major energy company which markets and trades natural gas and power, would purchase all power and environmental attributes produced by its first biomass facility. The facility will be built in La Crete, Alberta. The power purchase agreement commits that Mustus Energy will sell all of its power, offsets, and other environmental attributes for a 10 year period to Shell. The biomass facility will begin construction this spring, and will be in operations by mid 2014. The facility is estimated to provide baseload electrical power to the Alberta grid, providing energy for over 30,000 homes. The by‐product from the facility will be used as a soil enhancement for agriculture.

7. Turbine maker Vestas Wind, a leading wind energy company with headquarters in Denmark, has signed a co‐operation agreement with methanol production giant and Canada‐based company Methanex. Under the agreement, the companies will cooperate to establish a baseline for the development of future wind projects around Methanex's global production facilities, to support and to advise Methanex in the development of new wind projects. Methanex has a production facility located in Medicine Hat, which was restarted in 2011 and produces 470,000 tonnes of methanol per year. As producing methanol is an energy intensive process, Methanex looks forward to wind projects which will decrease the company's dependence on natural gas supplies in regions where supply is scarce.

8. Nova Scotia Power, a provider of the majority of the generation, transmission and distribution of electricity in the Province of Nova Scotia, is pairing with the District of Guysborough to submit a bid to the province for a proposed 13.8 megawatt wind farm. The project is called Sable Wind and is composed of six turbines. The Project is expected to generate enough energy to power 4,600 homes and will be located on 137 hectares of land near Canso and Hazel Hill.

On the Horizon

An ERCB report expected output from Alberta's oil sands to more than double from current production levels of 1.7 mmbbl per day in 2011, growing to 3.7 mmbbl per day by 2021. The ERCB figures represent a 19% increase over projections recently released by the Canadian Association of Petroleum Producers, which predicted oil sands production of approximately 3.1 mmbbl by 2020. The ERCB also announced that conventional oil production in Alberta rose in 2011 by 7% from the previous year to 490,000 bpd, due to better prices and the advent of horizontal wells and multi‐stage hydraulic fracturing, and production is expected to continue to rise to 560,000 bpd by 2014.


In this newsletter, all dollar amounts are Canadian dollars unless otherwise stated. We have also used the following abbreviations: bpd ‐ barrels per day; boepd ‐ barrels of oil equivalent 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.

Events from this Firm
25 Nov 2016, Seminar, Toronto, Canada

On Thursday, September 22, 2016, Dentons hosted a panel discussion about the management of liabilities and risks associated with environmental crises, including potential liabilities for directors and officers and provided insight into risk and liability techniques associated with environmental crisis management.

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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.