Canada: FMC´s Overview Of Significant Developments In The Canadian Energy Industry - January 2009

Last Updated: February 11 2009

Article by Doug Black, Q.C., Bill Gilliland, Alex MacWilliam, Miles Pittman, Anne Calverley, Rich Miller, John Hurley, Cyrus Reporter, Ron Stuber and Jerry Farrell



Oil Sands News

1. Nexen announced it has produced the first synthetic crude from its $6.1 billion Long Lake oil sands project. The main process units in the upgrader were successfully started up. Synthetic gas from the upgrader is being used in the SAGD operations, which will reduce the requirement to purchase natural gas. Early synthetic production rates are in the range of 10,000 to 15,000 bpd of high quality synthetic crude. Nexen said it will take 12 to 18 months before the upgrading plant reaches the capacity rate of 60,000 bpd of synthetic crude. Nexen has completed the acquisition of an additional 15% interest in the Long Lake project and the joint venture lands from OPTI for $735 million. Nexen is now the sole operator of the resource and upgrader, and holds a 65% interest in the project and the joint venture lands.

Connacher Oil and Gas announced that it is resuming full output at its oil sands project after six weeks of reduction because returns on the extra-heavy crude have improved. The company cut output to 5000 bpd of bitumen when the operation became unprofitable. Connacher expects to reach full production of 9000 bpd of bitumen by the end of next month. It had been the first notable Canadian oil sands producer to chop production as oil prices tumbled. Connacher also suspended construction on its second steam-driven oil sands development, the Algar project.

Enbridge has put plans on hold for the $346 million Trailbreaker pipeline expansion that would have shipped western Canadian oil through Ontario and Quebec to markets in the Gulf of Mexico via tanker by mid-2010. There was not enough support from shippers and the Canadian Association of Petroleum Producers (CAPP) to move this project forward. Plans have been put on hold until there is renewed interest in the project from shippers and CAPP. Enbridge outlined the interim scheme in July to give Canadian producers access to the Gulf Coast by using the pipeline expansion and then shipping the crude by tanker down the Atlantic seaboard from Portland Maine. It would have provided transportation for 130,000 bpd of oil sands production to the US and up to 70,000 bpd to Montreal refiners. The project involved re-reversal of Line 9 from Montreal to Sarnia and the reversal of an existing 18-inch line from Portland to Montreal. The system would have also required expansion of the system from Chicago to Sarnia. There have been a variety of proposals for increasing transport of crude from Canada's oil sands to refineries in Texas and Louisiana, that have been hit with declining volumes of oil from Mexico and Venezuela.

French Oil Company major Total SA made an unsolicited $617 million takeover bid for UTS Energy Corp. to acquire an interest in the Fort Hills oil sands project in Alberta. UTS has a 20% stake in the Fort Hills project, as well as interests in two other undeveloped oil sands leases. Other partners in Fort Hills are Petro-Canada, who is also the operator, and Teck Cominco. Total also has a 74% stake in Joslyn project and a 60% stake in the Northern Lights project, neither of which has been developed and a 50% stake in the Surmont project which is producing.

East Coast News

2. Corridor Resources recently approved a total capital expenditure plan of $59.9 million for 2009. The budget for 2009 is aimed at increasing natural gas production from the McCully field in southern New Brunswick and to evaluate the potential of oil and shale gas in the surrounding basin.

The Newfoundland and Labrador offshore industry recently achieved a milestone when the 1 billionth bbl of oil was produced from Hibernia, Terra Nova and White Rose. The revenues received from these 3 projects accounted for 33% of the entire province's revenue for 2008/2009. Since 1997, the province has received over $5 billion in royalties from these projects.

Despite the recent drop in the price of oil, activity in Canada's East Cost offshore is continuing with a few wells expected, subject to rig availability, and planning underway to develop the Deep Panuke offshore Nova Scotia and Hebron off Newfoundland. White Rose is scheduled for a major expansion with plans to conduct development drilling on 3 White Rose satellite fields. Offshore Newfoundland, Statoil HydroCanada is having an exploration well drilled. Petro-Canada confirmed that it will drill in an exploration well in the East Coast offshore. Chevron and ConocoPhillips also have plans to drill off the East Coast.

Fluor Canada has been selected by Irving Oil to conduct front-end engineering design for a proposed $7 billion refinery that is to be constructed in St. John, New Brunswick. This refinery is expected to produce 300,000 bpd of oil. Construction on this project is expected to begin in 2011 with start-up operations scheduled for 2015.

West Coast News

4. EnCana Corporation plans to construct a natural gas processing plant 60 km northeast of Fort Nelson in northeastern British Columbia to help meet expected production growth from the Horn River shale gas play. First phase completion is planned for 2011. A project description has been filed with the British Columbia Environmental Assessment Office. The initial processing capacity is expected to be 400 mmcfpd of gas with final processing capacity expected to be 2.4 bcfpd. There are six phases planned with each one coming on-line as processing demand increases in the Horn River Basin. In the project description EnCana estimates the Horn River shale formation to contain as much as 600 tcf of gas with 10 - 30% of that being recoverable. If suitable formations can be found and fiscal programs can be implemented the project should include carbon capture and sequestration opportunities in the area. Where possible, pipelines will use existing pipeline corridors in order to reduce potential adverse environmental effects.

Canada Energy Partners Inc. reports it is beginning to sell gas from eight wells on its Peace River coalbed methane project in British Columbia. Canada Energy owns a 50% working interest in the project. GeoMet Inc., through its subsidiary Hudson's Hope Gas, Ltd., owns the other 50% and is the operator. This is the first commercial coalbed methane project in British Columbia. Canada Energy also holds a 50% interest in the gas treating and compression facilities on the project.

Canadian Arctic News

6. Environment Minister Jim Prentice said that the government of Canada has made an offer to the backers of the Mackenzie Gas Project of financial support for the $16.2 billion Arctic gas pipeline. The offer includes providing financial support for infrastructure as well as for pre-construction expenses. Minister Prentice indicated that the offer does include a sharing of risk and returns on the project.

MGM Energy reports that it has reached a deviated target depth at 2102 meters at its Ellice J-27 well in northern Canada. The Ellice J-27 well is the first of its three well drilling program for 2009. The well encountered a number of zones containing natural gas and also encountered net gas bearing sandstones in four zones. Testing on the natural gas zones is scheduled to occur in February.

Alternative Energy News

3. TransAlta is reporting that it has launched commercial operations at its $170 million Kent Hills Wind Farm in New Brunswick as of December 31st, 2008. The 96 MW wind farm is located 30 kilometres southwest of Moncton, New Brunswick.

Wal-Mart Canada opened its 1st environmental demonstration store in Burlington, Ontario. The store uses a geothermal technology which is the first of its kind in a large-scale Canadian retail operation. Wal-Mart has indicated that it will start rolling out these types of stores which, according to Wal-Mart, are 30% more energy efficient than its traditional retail outlets. The environmental demonstration store also includes a number of other energy efficient features.

Better Place, a company based in California is seeking to extend its electric car charging and battery exchange stations across Canada, starting first in Ontario. Better Place has partnered with Bullfrog Power and Macquarie Captial Markets. Better Place is planning on starting out in the Greater Toronto Area and then plans to move other major cities in Ontario.

Six long term green energy project contracts have been awarded by the Ontario Power Authority (OPA). According to the OPA these projects should create roughly 2,200 jobs, provide enough electricity for upwards of 120,000 homes and also produce cleaner energy for the province. The projects are also expected to create a combined 492.1 MW of renewable generation.

Alternative Energy News

TransAlta is reporting that it has launched commercial operations at its $170 million Kent Hills Wind Farm in New Brunswick as of December 31st, 2008. The 96 MW wind farm is located 30 kilometres southwest of Moncton, New Brunswick.

Wal-Mart Canada opened its 1st environmental demonstration store in Burlington, Ontario. The store uses a geothermal technology which is the first of its kind in a large-scale Canadian retail operation. Wal-Mart has indicated that it will start rolling out these types of stores which, according to Wal-Mart, are 30% more energy efficient than its traditional retail outlets. The environmental demonstration store also includes a number of other energy efficient features.

Better Place, a company based in California is seeking to extend its electric car charging and battery exchange stations across Canada, starting first in Ontario. Better Place has partnered with Bullfrog Power and Macquarie Captial Markets. Better Place is planning on starting out in the Greater Toronto Area and then plans to move other major cities in Ontario.

Six long term green energy project contracts have been awarded by the Ontario Power Authority (OPA). According to the OPA these projects should create roughly 2,200 jobs, provide enough electricity for upwards of 120,000 homes and also produce cleaner energy for the province. The projects are also expected to create a combined 492.1 MW of renewable generation.

On the Horizon

On January 27, 2009, the Federal Government unveiled its 2009 Federal Budget which included a stimulus package totalling $40 billion in measures over the next two years. The stimulus package includes over $10 billion in infrastructure spending and $20 billion in tax relief measures to help provide an economic boost and create more liquidity in the markets. The government has provided up to $200 billion in existing and new liquidity financing under "Extraordinary Financing Framework" in order to improve access to credit for businesses.

When President Barack Obama makes his first foreign trip to Canada, the Canadian oil sands will be on the agenda. The President's visit is planned for February 19, 2009. The oil sands deposits in Alberta, Canada are the biggest oil reserves outside of Saudi Arabia. Canada accounts for about 20% of US imports of crude and oil products.

Mergers and Acquisitions: Acquiring a Canadian Company

This publication has been prepared to provide a general overview of the principal securities, tax, competition, foreign investment, labour relations, employment and pensions considerations that would be applicable in the acquisition of a Canadian business. Most of the material contained in this publication focuses on federal, British Columbia, Alberta, Ontario and Quebec legislation. The material is not meant to be an exhaustive analysis of the law. Persons considering the acquisition of a business in Canada should obtain professional advice as it relates to their specific investment or activity. Additional information relating to the acquisition of a business in Canada may be obtained from any of the offices of Fraser Milner Casgrain LLP.

Click here to view the full guide.

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 Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
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

    Mondaq.com (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 www.mondaq.com

    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 Mondaq.com’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.

    Disclaimer

    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.

    Registration

    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 unsubscribe@mondaq.com 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.

    Cookies

    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.

    Links

    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.

    Mail-A-Friend

    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.

    Emails

    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 .

    Security

    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 webmaster@mondaq.com.

    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 EditorialAdvisor@mondaq.com.

    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 enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com 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