Canada: FMC’s Overview of Significant Developments in the Canadian Energy Industry - September, 2005

Last Updated: October 17 2005

Article by Doug Black, Q.C., Bill Gilliland, Nick Kangles, Alex MacWilliam, Miles Pittman, Francis Saville, Q.C. and Karim Mahmud

Alberta Oilsands News

Petro-Canada announced it has entered into an agreement with mining giant Teck Cominco that will see Teck acquire a 15% interest in the Fort Hills oil sands project. Teck will earn a 10% interest from Petro-Canada in return for funding $250 million worth of expenditures incurred by Petro-Canada and its project partner UTS Energy. In a separate agreement Teck will earn a 5% interest from UTS in return for funding $225 million of UTS expenditures. The overall ownership interest in the project will be 55% Petro-Canada, 30% UTS and 15% Teck. Located north of Fort McMurray, Alberta, the Fort Hills project has regulatory approvals to produce up to 190,000 bpd of bitumen. (See number 1 on map)

Nexen and OPTI plan to inject in excess of $10 billion into their Long Lake joint venture over the next decade to triple current production to 240,000 bpd by 2015. OPTI’s CEO suggested that the prospect of high oil prices for the foreseeable future have bolstered the case for expansion, though he noted the project would be profitable even if oil prices fall below $30 (US) a barrel. The Long Lake venture is an in-situ project located southwest of Fort McMurray, Alberta. (See number 1 on map)

Shell announced it is considering a multi-billion dollar project to develop oil sands leases it holds in the Peace River area in northwestern Alberta. Along with giants such as Suncor, Shell is already an established open-mining player in the Athabasca region near Fort McMurray. Although the Athabasca region boasts the largest oil sands deposits, other areas such as the Cold Lake and Peace River regions contain significant deposits. Presently, Shell is weighing the merits of a three-phase expansion, resulting in production of 30,000 bpd by 2009. (See number 2 on map)

Enbridge announced long-term shipping agreements in relation to its proposed Waupisoo pipeline. Agreements have been struck with Petro-Canada, Suncor, ConocoPhillips and Total E&P to transport crude oil from the oil sands to Enbridge’s Edmonton area refinery. The 30-inch diameter, 380-kilometer Waupisoo pipeline will bring Enbridge’s ultimate takeaway capacity from the oil sands to 1.2 mbpd. The pipeline is expected to be completed by mid-2008. (See number 1 on map)

West Coast News

Husky announced the completion of the first phase of its Clean Fuels Project. Husky’s Prince George refinery is now capable of producing low sulphur gasoline. Husky’s President & CEO noted that "[t]he low sulphur gasoline produced at the refinery meets the Government of Canada’s new fuel specifications and will also benefit the environment by reducing vehicle emissions in central and northern British Columbia." The project complements Husky’s ethanol infrastructure in Lloydminster, Saskatchewan. The Project began in July 2004 and was completed in August 2005. (See number 3 on map)

EnCana has entered into an agreement with Methanex whereby Methanex would provide EnCana with the use of its import terminal in Kitimat, British Columbia. The terminal would be used to transport condensate by rail to Alberta for use in EnCana’s oilsands operations. Condensate is used to dilute bitumen, which is too viscous to transport by pipeline. The announcement also validates Enbridge’s recent plans to build a condensate pipeline alongside the planned oil pipeline as part of its Gateway Project. (See number 4 on map)

Canadian Arctic News

The Mackenzie Valley Pipeline has a revised completion schedule of 2010 or 2011, however negotiations are still proceeding daily with First Nations groups. The proposed pipeline is the largest project of its kind in Canadian history. It will offer access to 9 tcf of proved and probable natural gas reserves already discovered in the Mackenzie Delta and will open up further exploration both on the Mackenzie River Delta, in the Beaufort Sea and through the Mackenzie Valley. (See number 5 on map)

Devon is spudding the first offshore well in the Beaufort Sea in 15 years. At the end of August, Devon positioned an offshore platform just off the western coast of Beluga Bay, north of the Mackenzie River Delta in the southern Beaufort Sea. Drilling of the well is set to begin in mid-December. If Devon sees positive results from this well, it will follow with three more offshore wells over the next three winter drilling seasons. Devon has invested $250 million in exploration since acquiring four offshore licences in 2000 and this well is being drilled at a cost of $58 million. In the Canadian Mackenzie Delta – Beaufort region, there is an estimated 67 tcf of recoverable gas and 7 bbbls of recoverable oil, discovered and undiscovered. The region accounts for about 20% and 25% respectively of the total gas and oil resources in Canada’s frontier basins. (See number 6 on map)

The Governor of Alaska stated recently that the State should invest about $4 billion USD in the Alaska gas pipeline, giving it a 20% stake in the project. According to the published reports, the State has proposed this investment to ConocoPhillips, BP and ExxonMobil, the major producers of petroleum in the Prudhoe Bay area, and hopes to have a contract finalized by the end of this year. An Alaska natural gas pipeline would transport gas from Alaska to Alberta and thereafter to markets in the lower 48 states. Depending on the project configuration, the pipeline is estimated at upwards of $20 billion USD. Prudhoe Bay and other North Slope oilfields contain 35 tcf of proven reserves. The pipeline would supply 10% of US gas needs and would have an operating life of 30 to 50 years. (See number 7 on map)

East Coast News

There is a great deal of commercial interest in two LNG terminals proposed for the St. Lawrence River region of Quebec. The Gros Cacouna terminal is being proposed by Petro-Canada and would be situated about 240 km northeast of Quebec City. The Rabaska project is being proposed by

Gaz Metro, Enbridge and Gaz de France and would be situated near the town of Levis, Quebec. The two proposed terminals would represent a combined capacity of 1 bcf per day. The Rabaska terminal would tie-in with the Trans-Quebec and Mountain Pipeline at St. Nicolas, Quebec after receiving LNG from tankers coming up the St. Lawrence River. Both Rabaska and Gros Cacouna are currently advancing, although neither has yet been approved by regulators. The two Quebec terminals would be in addition to the Irving Oil Canaport terminal near St. John, New Brunswick and Anadarko’s Bear Head terminal in Nova Scotia, both of which have already received regulatory approval. Collectively, all four facilities will be able to process up to two bcf of gas per day.


  • Suncor donating $3 million to help address shortage of skilled workers in Alberta.
  • Enbridge announces conclusion of Gateway condensate pipeline open season and increases planned diameter to 20 inches.

In this article, all dollar amounts are Canadian dollars. 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 - million barrels; bbbl - billion barrels; boe - barrels of oil equivalent.

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
4 Nov 2016, Seminar, Toronto, Canada

Please join us for a complimentary half-day seminar on the following topics:

  • "When “actively employed” is not enough: Employee bonus update", presented by Matthew Curtis and Chelsea Rasmussen
  • "The top 10 labour arbitration cases of the past year", presented by
18 Nov 2016, Seminar, Vancouver, Canada

Ten days following the election, join us for a discussion with Gary Doer, former Canadian Ambassador to the US, and Gordon Giffin, US Ambassador to Canada under Bill Clinton, to discuss how the new President and Congressional makeup will shape US-Canada relations for years to come.

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.