Oil Sands News
Chevron announced it will develop five oilsands leases in the Athabasca basin. The leases were purchased from the Alberta Crown for less than $70 million and contain 180,000 acres and an estimated 7.5 bbbls of oil. The company plans to produce more than 100,000 bpd of oil by 2015 from the leases. (see number 1 on map)
Enbridge announced plans to increase the diameter for the Southern Access Expansion pipeline from 30 inches to 36 inches. The Southern Access Expansion will extend the reach of the current pipeline from Superior, Wisconsin to southern Illinois and Cushing, Oklahoma. Expanding the line will help provide an additional 400,000 bpd of additional heavy crude capacity from the Alberta oilsands. The pipeline is expected to reach full capacity in 2009. When combined with the expansion of capacity planned between Alberta and Wisconsin, the total cost for both expansion programs is $1.18 billion. (see number 2 on map)
Enbridge is considering offering minority stakes in the proposed Gateway and Alberta Clipper pipelines to its customers. Gateway is set to run from Edmonton, Alberta to Canada’s west coast while the Alberta Clipper is set to run from Hardisty, Alberta to Superior, Wisconsin. Enbridge is considering offering up to a 49% share in each pipeline but will not be selling a controlling stake in either of the lines. PetroChina is one of the customers considering a bid. Last year, the state-controlled Chinese oil company signed a Memorandum of Understanding with Enbridge to ship up to 200,000 bpd on the Gateway line. (see numbers 3 and 4 on map)
BA Energy has approved a $900 million plan to build an upgrader near Edmonton, Alberta. The "Heartland Upgrader" will process approximately 50,000 bpd of bitumen from the oilsands and will be developed in three phases; start up of the first phase is scheduled for early 2008. The first phase will process 77,500 bpd of bitumen blend but total capacity will be approximately 250,000 bpd once the project is fully expanded. Approval for all three phases of the project was received from the Alberta Energy and Utilities Board in July, 2005. (see number 5 on map)
West Coast News
The B.C. government is examining a new targeted royalty scheme and other incentive programs to stimulate oil and gas development. Specifically, the Minister of Energy stated that the province is looking at net profit royalty systems, as well as several programs aimed at lengthening the drilling season in B.C. The Minister has also drawn attention to the possibility of the offshore moratorium being lifted as a result of the new federal government.
Canadian Arctic News
Environmental hearings for the $7 billion Mackenzie Valley pipeline began this month. Over the coming year, a seven member panel will hear evidence in 27 communities from Tuktoyaktuk, in the Northwest Territories, to Calgary, Alberta. The focus of these hearings will be on the impact of the pipeline project on Arctic ecosystems and regional aboriginal interests. The panel will then present its findings and recommendations to the National Energy Board. Last month, the National Energy Board also commenced hearings into the technical aspects of the proposed pipeline project. (see number 6 on map)
East Coast News
The Government of Nova Scotia announced that it is holding talks with various parties in an effort to attract a new oil refinery to the province. The talks with unnamed parties come amid heightened interest in potential new refineries in Canada to supply the U.S. market. The Government noted Nova Scotia’s suitability for such refinery projects because of its deep water ports. Presently, Imperial Oil’s 84,000 bpd Dartmouth facility is the only refinery in the province. (see number 7 on map)
Alternative Energy News
Enbridge announced that it will partner with Sequoia Energy to develop wind energy in Manitoba over the next few years. Manitoba plans to develop 1,000 megawatts of wind-generated electricity, which would require approximately $2 billion in capital expenditures. Enbridge’s wind projects now span four provinces, from Alberta through to Ontario. In Ontario, Enbridge is under contract to build a $400 million, 200 megawatt wind-power facility in Bruce County, on the eastern shore of Lake Huron, with construction expected to be completed in 2007. In Alberta, Enbridge has partnered with Suncor and Spain’s ACCIONA Group on two projects, including a planned 30 megawatt wind power plant near Taber in southern Alberta. In Saskatchewan, Suncor and Enbridge also own and operate the 11.2 megawatt SunBridge wind power project near Gull Lake.
ON THE HORIZON…
- Talisman is looking to jump on the oilsands bandwagon by developing inherited leases in Alberta’s Athabasca oilsands.
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.