Canada: FMC’s Overview of Significant Developments in the Canadian Energy Industry - January 2006

Oil Sands News

Enbridge announced that it is expanding discussions with potential shippers for a newly announced $1.85 billion, 36-inch, crude oil pipeline from Hardisty, Alberta to Superior, Wisconsin. The proposed "Alberta Clipper Pipeline" would have an initial capacity of 400,000 bpd and would parallel the existing Canadian mainline and interconnect with the existing mainline system in the U.S. (See number 1 on map)

TransCanada announced that it now has long-term contracts in hand for the Keystone pipeline proposal. The contracts are for a total of 340,000 bpd with an average commitment of 18 years. The main shipper will be ConocoPhillips. The 3,000 kilometre (1864 mile) pipeline is expected to be in service by the fourth quarter of 2009 and will move approximately 435,000 bpd of crude from Alberta to Illinois, and possibly Oklahoma. Regulatory applications are expected to follow later this year. (See number 2 on map)

Fort Hills Energy Corporation announced plans to build an oil sands upgrading facility in Sturgeon County, approximately 40 kilometres (25 miles) northeast of Edmonton, Alberta. Petro-Canada operates Fort Hills with a 55% stake; UTS Energy has a 30% working interest and Teck Cominco has a 15% working interest. The upgrader will process bitumen from the Fort Hills oil sands mine, 90 kilometres (56 miles) north of Fort McMurray. Fort Hills will seek regulatory approval for the upgrader late this year or early in 2007. The mine portion of the project is approved for up to 190,000 bpd of bitumen production from reserves of 2.8 billion bbbl. (See number 3 on map)

North West Upgrading has filed an application to build a $4.8 billion merchant heavy oil upgrader. Like the proposed Fort Hills upgrader, North West’s upgrader is to be built in Sturgeon County and will process raw bitumen into light synthetic crude oil. The project has three phases, each of which will cost about $1.6 billion. The plant’s initial phase will have a processing capacity of about 50,000 bpd of bitumen and 27,000 bpd of diluent, either in the form of synthetic crude oil or condensate. The next two phases are expected to be built between 2013 and 2015 and will add additional capacity for 60,000 bpd of light synthetic oil and 14,000 bpd of diluent. (See number 3 on map)

Suncor has produced over 1 bbbl of oil from its oilsands facilities near Fort McMurray. It took Suncor 29 years to produce the first 500 mbbl but less than 10 years for the next 500 mbbl. Production of the next 1 bbbl should happen even more quickly as the expansion of upgrading facilities in 2005 has increased production capacity to 260,000 bpd, with plans to further expand to more than 500,000 bpd by 2010-2012. (See number 3 on map)

West Coast News

Kinder Morgan has reached agreements with shippers to boost the capacity of its Trans Mountain system in Canada to 300,000 bpd by 2008 at a cost of $600-million. Trans Mountain is currently the only link to the West Coast from the oilsands in Western Canada. The pipeline carries crude oil and refined products from Edmonton, Alberta to marketing terminals and refineries around Vancouver, British Columbia and Puget Sound in the State of Washington. In the future, Kinder Morgan plans to expand Trans Mountain’s capacity to as much as 1.1 million bpd and will begin a call for shipping commitments in March, 2006. (See number 4 on map)

Enbridge’s proposed Gateway crude oil pipeline is another proposed link between the oilsands and the West Coast. Enbridge plans to file regulatory documents this year and has received non-binding indications from shippers to move more than 400,000 bpd. (See number 5 on map)

Canadian Arctic News

National Energy Board (NEB) hearings began in January to discuss technical aspects of the proposed 1,300 kilometre (800 mile) Mackenzie Valley pipeline. Separate public hearings on the environmental and socio-economic effects of the project will begin in mid-February. The NEB will visit 25 northern communities that could be affected by the development of the pipeline. The proposal includes three of the four aboriginal groups in the Mackenzie Valley as part-owners of the pipeline with Imperial. The project would tap natural gas in the Mackenzie Delta and move it into Alberta, where it could then be moved on to U.S. markets through existing pipelines. (See number 6 on map)

East Coast News

Petro-Canada has revised its estimate of recoverable oil in the Hibernia field upwards to 1.2 bbbl, an increase of approximately 250 mbbl. Since Hibernia first produced oil in 1997, estimates have continued to increase. Two years ago the estimated recoverable size of the field was 750 mbbl, which was raised a year ago to approximately 940 mbbl. (See number 7 on map)

Stealth Ventures announced plans to commence coal bed methane drilling operations in Springhill, Nova Scotia. Stealth is drilling a horizontal CBM well to test productivity of natural gas from the historic coal beds of Cumberland County, Nova Scotia. The well will complete an earning obligation that increases Stealth’s working interest from 50% to 75% in the Exploration Permit, which covers approximately 177,000 acres. (See number 8 on map)

Alternative Energy News

There is currently a boom of development in the Canadian wind energy industry, largely as a result of support from the Federal Government, as well as various provincial governments. Large Canadian companies usually associated with other aspects of the Canadian energy industry are now active in the Canadian wind energy industry, including Suncor, Enbridge, EPCOR, Nexen and TransCanada. The national wind energy industry has expanded from roughly 300 MW of installed capacity in 2003 to 682 MW at the end of 2005 with several thousand MW of further proposed capacity. Hydro-Quebec recently issued a call for tenders for the purchase of 2,000 MW of wind power, which would represent between $3 and $4 billion of capital investment. The Government of Ontario awarded 955 MW of procurement commitments, which will involve investments of roughly $1.5 to $2 billion. In addition, Manitoba Hydro released an invitation for expressions of interest for up to 1,000 MW of wind power projects, which could result in $2 billion in capital investment, $1 billion in operating expenditures and $7 billion in energy sales. 

In this newsletter, 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.

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.