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R001697746 VOL. 6 ISSUE 7 DIST: 16,000 SERVING THE OIL & GAS INDUSTRY IN NORTHERN B.C. AND ALBERTA PIPELINENEWSNORTH.CA FREE! JULY & AUGUST 2014 SPECIAL REPORT: Sea change—BC orders LNG-powered ferries BC’S REFINERY FUTURE PACIFIC FUTURE ENERGY Key points: is Vancouver-based company is headed by Robert Delamar. e top contender for a site is Prince Rupert. Initially the product will move by rail. KITIMAT CLEAN Key points: Formed in 2012, it is wholly owned by David Black, majority owner of Black Press. Dilbit will move via pipe to Kitimat. KC began a two-year Environmental Assessment in May. EAGLE SPIRIT ENERGY Key points: is Aboriginal-owned company is backed by Aquilini Investment Group. It has narrowed down its site to Northeast B.C. or North Alberta. Product will be refined before it’s piped. British Columbia could play a more essential role than anyone expected in getting Alberta’s oil to international markets if even one of the three proposed refinery and upgraders come to fruition.

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Page 1: Pipeline News North July 2014

R001697746

VOL. 6 ISSUE 7 DIST: 16,000 SERVING THE OIL & GAS INDUSTRY IN NORTHERN B.C. AND ALBERTA

PIPELINENEWSNORTH.CA

PIPELINE NEWS NORTHFREE!

JULY & AUGUST 2014

special report: sea change—Bc orders lNG-powered ferries

bc’s refinery future

PACIFIC FUTURE ENERGYKey points: This Vancouver-based company is headed by Robert Delamar. The top contender for a site is Prince Rupert. Initially the product will move by rail.

KITIMAT CLEANKey points: Formed in 2012, it is wholly owned by David Black, majority owner of Black Press. Dilbit will move via pipe to Kitimat. KC began a two-year Environmental Assessment in May.

EAGLE SPIRIT ENERGY Key points: This Aboriginal-owned company is backed by Aquilini Investment Group. It has narrowed down its site to Northeast B.C. or North Alberta. Product will be refined before it’s piped.

British Columbia could play a more essential role than anyone expected in getting Alberta’s oil to international markets if even one of the

three proposed refinery and upgraders come to fruition.

Page 2: Pipeline News North July 2014

2 • PIPELINE NEWS NORTH

R002424268

Page 3: Pipeline News North July 2014

PIPELINE NEWS NORTH • 3

Fort St. John, B.C.250.785.7907

Toll Free: 1-888-830-9909

Dealer for WESTERN STAR • DOEPKER • TREMCAR • PACESETTERSALES • PARTS • SERVICE

R001757923

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R00

1828

320

$10.74: The so-called Alberta-B.C. Natural Gas Dis-count—the difference in price a BTU of NG costs

in Tokyo compared to Alberta—is at its lowest level in more than two years. Chart on Page 5.

$4.13: The AECO “C” spot price, the Alberta gas trading price, has nearly doubled in the past year,

to $4.13/Gj. Chart on Page 5.

341: The number of wells drilled in B.C. in the first six months of 2014. It’s the highest H1 figure

in three years. Chart on Page 5.

3: The number of B.C.-based refinery and up-grader proposals that want to refine crude here

before shipping it to Asia. Story on Page 6.

5: The number of LNG-powered ferries that will

be in the possession of BC Ferries by 2018. Story on Page 10.

$10 million: British Columbia’s revenue from June’s Crown Petroleum and Natural Gas Public

Tender. Story on Page 13.

$250 million: The price tag of AltaGas’s LNG plant that might be built near Dawson Creek. The proj-

ect was announced when Christy Clark visited last month. Story on Page 14.

1 km: The B.C. government’s recently announced “safe zone” that bans drilling near schools.

Story on Page 18.

Aug. 15-17: The dates of the FSJ Petroleum As-sociation’s 5th Annual Family Weekend.

Events list on Page 21.

0: Pacific Future Energy’s refinery would create “near zero net carbon emission” its CEO told

Pipeline News North. Story on Page 22.

10,000: The estimated number of full time jobs that would be created from the Aboriginal-owned

and operated Eagle Spirit Energy refinery. Story on Page 22.

$10 billion: The amount of money Kitimat Clean has asked the federal government to guarantee of

the borrowed capital costs. Story on Page 24.

5: The number of LNG export licenses that Steel-head LNG applied for on July 8, 2014.

LNG export list on Page 28.

Al Seib / MCT

The following figures were taken from the stories in this issue of Pipeline News North.

PNN NUMBERS

Page 4: Pipeline News North July 2014

PNN New RR channels take effect

Chart: Alberta-B.C. LNG discount

Chart: Alberta

gas price

B.C. refineries rundown

Vancouver gets

taste of LNG boom

China, Alberta team up on liquefaction

BC orders first three

LNG-powered vessels

Douglas Channel LNG back on track

FNFN company picks

up LNG contract Tetra Tech EBA wins

Kitimat LNG contract

U.N. confirms what we already knew

June’s NG land auction

brings total to $37M

Clark lands in the Peace

LNG Canada hires URS to streamline info

LNG’s big challenges

22 ENCANA SELLS MoRE GAS ASSETS iN ALBERTA & B.C.

23 School’s out for drilling

24 SemCAMS announces new Montney pipeline

25 ‘Clean’ fracking? We’re working on it

26 oil & gas industry events through 2014

26 Strongest Q2 in seven years: CAoDC

26 B.C. REFiNERy: PACiFiC FUTURE ENERGy

27 B.C. refinery: EAGLE SPiRiT ENERGy

27 B.C. refinery: KiTiMAT CLEAN

27 Senior oilmen’s golf tournament

27 LoNG-TERM LNG ExPoRT PRoJECTS

28 Pre-register for LNG Buy BC

ThE RiGhT CALL oN NoRThERN GATEWAy

Look for PNN on Twitter @PipelineNN

Look for PNN on Facebook / pipelinenewsnorth

prov

ince

comm

unitycharts

events

26

07

Published monthly by Glacier Ventures International Corp.Pipeline News North is politically independent and a member of the B.C. Press Council. The Pipeline News North retains sole copyright of advertising, news stories and photography produced by staff. Reproduction is prohibited without written consent of the editor.

3

5

5

5

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6

6

8

8

13

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18

21

21

mATT LAmErS PHOTO

26

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Asia

inve

st

Page 5: Pipeline News North July 2014

PIPELINE NEWS NORTH • 5

#LNGinBC the ChArts

New resource road (rr) chan-nels and radio-on-call protocol were implemented on June 16 in the North Peace and Fort Nelson districts.

To prepare for the change, Indus-try Canada suggests that all road user’s radios be programmed with the new rr channels; take note of signs with new rr channels and other required radio commu-nications signage; take note that conflicting frequency signs are removed; rr user employers and representatives must communi-cate the implementation to ensure safe travel and conformance to the new radio channels and communi-cations protocols; rr users utiliz-ing mobile radios adhere to posted

channels and protocols.Enform says Industry Canada

worked with stakeholders across British Columbia to develop the standardized bank of radio chan-nels for use on resource roads to enhance traffic safety.

“road User Groups worked over the past several months with road users to inform them of the chang-es and to program the new chan-nels,” according to a release.

The changes involve rrs at 100 mile House, Cariboo-Chilcotin, Fort St. John and Fort Nelson For-est District.

The changes are now in effect for all effected areas.

rr channels are used for calling kilometers on radio assisted roads. The appropriate channel is posted at the entry point of the respective roads.

New RR channels take effectMatt Lamers

Staff Writer

Net proceeds (in millions of $) from oil and gas land auctions in B.C. had been steadily increasing in the past six months, but sales cooled slightly, reversing the 10-month trendline. Source: BC Oil and Gas Commission

Left, the Henry Hub Natural Gas Spot Price (dollars per Million Btu) traded at $4.10 in the first week of December and began July at $4.39. Source: U.S. Energy Information Agency

The Japan LNG Import Price has been trending downward for several months after reaching all-time highs last year. Japan still hasn’t restarted any of its nuclear reactors. Source: World Bank

The AECO “C” spot price, the Alberta gas trading price, has nearly doubled in the past year, to $4.13/Gj but remains at or near historic lows. Source: Natural Gas Exchange

Alberta gas price

The so-called Alberta-B.C. Natural Gas Dis-count (ABCD) is the dif-ference in price that a BTU of natural gas costs in Tokyo compared to Alberta. Sources: Natural Gas Exchange, Bloomberg

The alberta-B.C. lng discount

Japan gas price

U.S. gas price

BC land auction

December 2013 to July 2014

March 2012 through July 2014

September 2013 through July 2014

October 2013 through July 2014

December 2013 to May 2014

The price of oil has been effected by geopolitical factors in the Middle East and elseware that has some investors on edge. $100. Source: U.S. Energy Information Agency

There was an up-ward trend in monthly drilling in the last 13 months in B.C. Drill-ing typically dips in the warmer months and rises in the winter. Source: BC Oil and Gas Commission

There were 341 wells drilled in B.C. the first six months of 2014, the most since 2011. Source: BC Oil and Gas Commission

Wells drilled, first half

Wells drilled, monthly

Oil price

June 2013 through July 2014

2010-2014, first six months

May 2010-July 2014, first six months

Page 6: Pipeline News North July 2014

6 • PIPELINE NEWS NORTH

William JulianREGioNAL MANAGER

250-785-5631wjulian at

pipelinenewsnorth.ca

alison mcmeansMANAGiNG EDiToR250-782-4888editor atpipelinenewsnorth.ca

Dan PrzybylskiSALES250-782-4888 ext 101c: 250-784-4319dcsales atpipelinenewsnorth.ca

ryan WallaceSALES

250-785-5631C: 250-261-1143

rwallace at ahnfsj.ca

maTT lamersREPoRTER

250-785-5631C: 250-794-1979

reporter atpipelinenewsnorth.ca

Janis kmeTBC SALES250-782-4888 C: 250-219-0369jkmet at dcdn.ca

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CONTACT USPhone (250) 785-5631 Fax (250) 785-3522

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B.C. could play an even big-ger role than expected in get-ting Alberta’s oil to market. As Alberta seeks overseas custom-ers for its petroleum products, three refinery and upgrader proposals have emerged as leading contenders to make that happen.

The projects pitch convert-ing oil sands bitumen prior to shipping, relieving the need for tankers full of diluted bitumen (dilbit) navigating the coast – a point of contention for First Nations due to the potential impact on marine habitat.

One of the major focuses of all three projects is on mitigat-ing environmental impacts and ensuring that First Nation part-nership consent is given from

the get-go. Pipelines such as Northern

Gateway are proposed as a method of transporting dilbit to international markets for refining. Current Canadian op-erations are capable of refining light crude oil and upgraders convert heavy oil into a lighter crude, but heavy oil refining is largely done in the U.S.

“From an upstream perspec-tive, every refinery is a new

Elaine AnselmiStaff Writer

PACIFIC FUTURE ENERGYThis is a Vancouver-based company headed up by B.C.-native CEO Rob-ert Delamar and Executive Chairman Samer Salameh. The top contender for a site is Prince Rupert, but two oth-ers are being considered. Initially the product will move by rail.

EAGLE SPIRIT ENERGY Key points: This Aboriginal-owned company is headed up by Chairman Calvin Helin, with backing by Aquilini Investment Group. It has narrowed down its site to Northeastern B.C. or Northern Alberta. Product will be refined before it’s piped to the West Coast, where it will be loaded onto ships bound for Asia.

bc’s refineries: which will go?Three proposed refinery and upgrader projects in British Columbia — pacific future energy, eagle spirit energy and

WALTEr SIEGmUND PHOTO

Page 7: Pipeline News North July 2014

PIPELINE NEWS NORTH • 7

Fort st. Johntwitter.com/pipelineNN

customer and every customer is good and we are all for them,” Ca-nadian Association of Petroleum Producers manager of B.C. Opera-tions, Geoff morrison said. “But, it is easier to sell an unrefined prod-uct than a refined product; that’s part of the dimension of that. You typically refine closer to markets in which you consume them, as opposed to refining them here and finding a market for that specific product.”

morrison said refining prior to transportation requires finding a customer for that specific prod-uct, be it gasoline, diesel, jet fuel or otherwise.

“That’s not to say it can’t be done and it certainly can be done, were all for refining in Canada, more customers are good and that’s an important discussion that needs to happen,” morrison added.

With much of the conversation around the proposed projects fo-

cusing on their social license, mor-rison said it is certainly a marker of how expectations have changed.

“It has changed a lot, the magni-tude of projects has changed, the opportunities have changed and the expectation of society in gen-eral,” he said. “There is greater ex-pectation of participation and part of the decision making process.”

morrison noted that this change is not unique to oil and gas, con-sidering other major development

projects that have received a great deal of public response, but that it has certainly been visible across the industry.

Before shovels enter the ground on the Northern Gateway pipeline, Enbridge has some work to do on the 209 conditions the National Energy Board stamped on it.

The following is a breakdown of the three proposed refinery proj-ects. in British Columbia.

See REFINERY on PAGE 22

‘it is easier to

sell an unrefined

product than a

refined product;

that’s part of the

dimension of that.

That’s not to

say it can’t

be done.’

KITIMAT CLEANKey points: Formed in 2012, it is wholly owned by David Black, majority owner of Black Press. Dilbit will move via pipe to Kitimat. KC began a two-year Environmental Assessment in May and has asked the federal government to guarantee $10 billion of the borrowed capital costs.

WILL THERE BE ANOTHER? Enbridge purchased a 158-acre parcel of land in Prince Rupert last December. Bloomberg speculated it could be a “Plan B” for Northern Gateway, which faces resistance at its current end-point in Kitimat. Enbridge has said the land is for an LNG terminal, but it could just as easily be the site of a refinery.

bc’s refineries: which will go?kitimat clean — have emerged as new potential pathways

to getting Alberta’s oil to international markets.

mAGNUS LArSSON PHOTO

Page 8: Pipeline News North July 2014

8 • PIPELINE NEWS NORTH

Vancouver is about to get a taste of the province’s LNG spoils, if WesPac midstream Vancouver LLC is successful.

The company, a unit of Tex-as-based WesPac midstream LLC, has filed an application with Canada’s National En-ergy Board to export 3 million tonnes of LNG a year for 25 years.

The liquefaction plant would be built in Delta, B.C. south of downtown Vancouver.

It is the 17th LNG project that proposes producing, liq-uefying and shipping gas from British Columbia and Alberta to Asia. Eleven proponents have export permits in hand. Three, including WesPac, await a decision by the NEB and an-other three have yet to submit their applications.

This is the first project that has proposed using facilities so close to Vancouver.

Two of the 17 LNG projects envision export terminals in Oregon while the rest are based in B.C.

In its regulatory filing, WesPac said construction could start as soon as 2015, meaning a final investment decision could be in the works for the end of this year or early next year, and the gas would be headed for markets in Asia, the U.S., Central America and South America.

By liquid gas volume, it is one of the smallest LNG projects.

In the filing, WestPac identi-fied as a potential site Fortis Inc.’s existing LNG facility on Tilbury Island on the Fraser river. The plant has capacity to liquefy up to 4.24 mmcf/d.

Fortis BC, a subsidiary of For-tis Inc., previously announced a $400-million expansion of the plant.

“Engineering and site analy-ses have confirmed that the Tilbury site is capable of ac-commodating further LNG ex-port production expansion of

approximately 462 million cu-bic feet per day of natural gas equivalent LNG production,” WesPac said in the application.

WestPac midstream LLC is majority owned by Highstar Capital LP.

Another LNG project in the Lower mainland is Woodfi-bre LNG, slated for Squamish. Woodfibre LNG is a proposed small-scale

processing and export facil-ity that recently decided to build a land-based liquefac-tion facility rather than a float-ing one. It would be built at an existing industrial site, the former Woodfibre pulp mill, which the proponent says is suited for conversion for LNG. It is privately owned by Singa-pore-based rGE Pte. Ltd. and received NEB approval in De-cember for a 25-year license to export 2.1 million tonnes annually.

“Obtaining the requested li-cense is an important step in the development of the WesPac LNG marine Terminal.”

matt lamersStaff Writer

Vancouver gets a taste of LNG boom

Another gas liquefaction plant is in the works for Alberta.

In July, Petrox resources Corp. announced a co-operation framework agreement with Qingdao Sinoenergy Corporation of China and Asiafic Clean Energy Limited of Hong Kong to establish an Al-berta joint venture company called Gascana AB Energy Ltd.

The main objective of Gascana AB will be the construction of an LNG liquefaction plant in Alber-ta with a daily production capacity of 2,950 tonnes.

Asiafic is a wholly owned subsidiary of Qingdao Sinoenergy.

Gascana is working with the Edmonton Econom-ic Development Corp., which says that the proposal could include more petrochemical and manufac-turing plants totaling some $4 billion.

The facilities would be constructed in Sturgeon County and the LNG would be transported to the coast for export via rail.

As of press time, neither the Alberta Energy regu-lator nor the National Energy Board had received applications for the project.

Calgary-based Petrox will initially have a 10 per cent equity interest and will be responsible for the implementation of the project, including the acqui-sition of all regulatory approvals for the construc-tion of the LNG plant, obtaining utility supplies, and other project planning and development activities.

Asiafic will possess a 90 per cent equity interest in the joint venture and will be responsible for obtain-ing the upstream natural gas supply and purchas-ing the land for the plant.

Gascana AB will be responsible for the construc-tion of the plant, applications to related authorities and engineering.

Petrox is a publicly-traded Canadian junior oil and gas company listed on the TSX Venture Ex-change (PTC).

Qingdao Sinoenergy — a clean energy operating company based in China — explores and develops natural gas resources, operating LNG terminals and LNG plants, processing and distributing CNG/LNG, building and operating CNG/LNG filling sta-tions, and supplying natural gas or LNG to large in-dustrial clients.

Qingdao Sinoenergy is also involved in the man-ufacturing of natural gas storage and transporta-tion equipment and CNG/LNG conversion kits for vehicles.

MATT LAMERSStaff Writer

China, Alberta team up on liquefaction plant

the [email protected]

A new liquefaction plant could be built in Delta, B.C. south of Vancouver. It’s the 17th natural gas project proposed in British Columbia. MAGNuS LArSSoN Photo

The Vancouver-headquar-tered Steelhead LNG project took a significant step forward when it applied to Canadian au-thorities in June for a license to build its terminal on Vancouver Island.

The application to the Nation-al Energy Board outlined its plan to export 30 million tonnes per annum of liquefied natural gas.

Steelhead LNG agreed to terms with Huu-ay-aht First Na-tions to construct facilities on their land at Sarita Bay, at the southern end of Alberni Inlet.

Few details were available when the project was originally announced in march 2014.

On march 18, Steelhead LNG appointed former B.C. Attorney General Geoff Plant as a mem-

ber of its board of directors.The company is financed by

KErN partners. If it makes an affirmative fi-

nal investment decision, the $30-billion project would be amongst the biggest of the 15 LNG projects on Canada’s West Coast, putting it into direct competition with the likes of Chevron and Petronas.

Steelhead LNG lands on Vancouver Island

Page 9: Pipeline News North July 2014

PIPELINE NEWS NORTH • 9

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Page 10: Pipeline News North July 2014

10 • PIPELINE NEWS NORTH

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#LNGinBCspeCiAl report

sea

BC Ferries orders its first three LNG-powered vessels, ushering in a new era

of clean, efficient and cheaper marine transportation. Could this be

the future of ferries in British Columbia?

BC Ferries has awarded a $165 mil-lion contract to a Polish shipbuilder for three new liquefied natural gas

powered ferries. The project has a total budget of

$252 million after financing, project management costs, and importation taxes are incorporated, making the cost per vessel $84 million.

The ships will be the first in the province’s fleet to operate as dual-

fuel capable using LNG or diesel for propulsion.

“This is an exciting initiative for BC Ferries that can reduce upward pressure on fares due to lower fuel costs for LNG, and reduce the envi-ronmental emissions substantially since LNG is a cleaner and greener

fuel compared to current alterna-tives,” said BC Ferries’ vice president of engineering, mark Wilson.

Also announced in July, two more ferries will be upgraded to LNG pro-pulsion in 2016-2017.

The LNG-ship contract comes just two months after Pipeline News

MATT LAMERSStaff Writer

change

Page 11: Pipeline News North July 2014

PIPELINE NEWS NORTH • 11

R001697755

industry newstwitter.com/pipelinenn#LNGinBC

The stalled Douglas Channel LNG project has been given a kickstart courtesy AltaGas Ltd.

The project had been the front runner to ex-port liquefied natural gas from British Colum-bia before insolvency filings in B.C. by LNG Partners LLC last October put the project in limbo.

Original plans had construction beginning this year, and an investment by AltaGas Ltd. could put the project back on schedule.

A CIBC World markets report said the $500 million project’s creditor protection process could come to a successful conclusion as early as July 7, and AltaGas is likely to take a stake.

“We believe development of Douglas Chan-nel will drive additional opportunities in Alta-Gas’ field gathering and processing business, and utility business,” analyst David Nosewor-thy told clients.

A letter of intent on June 20 from AltaGas and the B.C. government outlined plans to increase the use of LNG in the province by Sept. 30 of this year.

“The LOI may asset in moving the first phase of the project to final investment decision,” Noseworthy added.

He expects AltaGas to invest about $250 mil-lion in its regional LNG plan as part of its ap-proximately $ 2 billion of LNG-related projects.

MATT LAMERSStaff Writer

Douglas Channel LNG back on track?

SAm BEEBE PHOTO

North reported that the West Coast can benefit from marine use of lique-fied natural gas.

The Canadian Natu-ral Gas Vehicle Alliance has suggested that the cost savings would be significant in the long run, possibly enough to save the ailing BC Ferries corporation.

The 105 metre vessels will carry 145 vehicles and 600 passengers apiece.

Following are the de-sign-build, fixed-price contract terms.

Design remontowa assumes

full design and construc-tion risk.

regulatory remontowa is responsi-

ble for building vessels that comply with all Transport Canada regulations, as well as classification (interna-tional shipbuilding stan-dards) and environmental regulations.

Payment The total cost of the

three vessels is $165 mil-lion. Four payments of five per cent per vessel are payable during the con-struction period, with the remaining 80 per cent pay-able upon completion of each vessel.

refund A refund guarantee from

remontowa’s bank will be in place to provide security for BC Ferries’ pre-delivery instalment payments.

Liquidated damages

remontowa guarantees the delivery and the per-formance of the vessels; specifically speed, fuel consumption, weight and freight capacity, accelera-tion time and rate of turn.

Increasing financial penalties, up to the point of contract cancellation with a full refund, will be levied if the perfor-mance of the vessel does not meet the contract specifications.

Corporate guaranteeremontowa will pro-

vide a corporate guarantee from its parent company, remontowa Holding, as security for the perfor-mance of all of remon-towa’s obligations under the contracts.

WarrantyAn extended builder’s

warranty of 24 months from delivery will ap-ply to materials, con-struction, design and workmanship.

Noise and vibrationremontowa guarantees

that the vessels will be built to the highest shipbuilding standards for noise and vi-bration.

If they are not, BC Fer-ries has the right to re-ject the vessels for a full refund.

title to design, plans and drawings

BC Ferries will acquire the title to the vessels’ design, plans and draw-ings upon delivery at no additional cost to BC Ferries.

‘This is an exciting

initiative for BC

Ferries that can

reduce upward

pressure on fares

due to lower fuel

costs for LNG,

and reduce

emissions since

LNG is a cleaner

and greener fuel

compared to

current

alternatives.’

Page 12: Pipeline News North July 2014

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Page 13: Pipeline News North July 2014

PIPELINE NEWS NORTH • 13

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Tetra Tech EBA was awarded a contract by Fluor/JGC to carry out site investigations for the pro-posed Kitimat LNG liquefaction facility at Bish Cove, near Kitimat, British Columbia.

Kitimat LNG is currently in the Front End En-gineering and Design (FEED) phase. In January 2014, JGC/ Fluor was awarded the engineering, procurement and construction contract.

Tetra Tech EBA’s work involves detailed onshore geotechnical studies and foundation/seismic design.

Tetra Tech EBA is a consulting engineering and sciences company with more than 800 employees in Canada. Together with its sister company Tera Tech, their 4,000 employees provide a broad range of services in the energy industry.

Kitimat LNG is a joint venture between Chevron Canada Ltd. and Apache Canada Ltd.

Apache is looking to sell part of its 50 per cent stake in the project because it doesn’t want to spend up to $1 billion in 2014 related to front-end engineering and design for the LNG terminal.

The project has all major provincial and federal environmental approvals in place and support from 15 First Nations. The proposed facility would be built on land leased from Haisla Nation.

MATT LAMERSStaff Writer

Tetra Tech EBA wins Kitimat LNG contract

BrUCE mCKAY PHOTO

British Columbia pulled in $10 million from June’s Crown Petroleum and Natural Gas Pub-lic Tender, down from may’s $17.17 million and $10.4 million in April.

June’s revenue brings to $37 million the total auctions’ contribution to the fiscal year.

The average price paid per hectare in June came in at $1,322 per hectare, which is in line with previous months: march, April and may came in at $1,854, $1,091 and $1,487, respectively.

The June 18 sale offered five parcels of land in Northeastern B.C. covering 7,468 hectares. All five parcels were sold.

Two leases 160 kilometres northwest of Fort St. John accounted for the majority of the monthly income.

The land is in the Bubbles North-Tommy Lakes area and collectively earned more than $8.8 million in tender bonus.

See DrILLING on PAGE 10

MATT LAMERSStaff Writer

June’s NG land auction brings total to $37M

mATT LAmErS PHOTO

Black Diamond Dene Limited Partnership has signed a long-term camp lease for workforce housing facilities in the Horn river Basin of North-eastern British Columbia, three hours north of Fort Nelson.

Black Diamond Dene Limited Partnership ac-quired the operating camp lease, which includes a 425-room lodge, and related infrastructure in the Horn river area at kilometre 90 on Komie road.

“This is a unique opportunity for Black Diamond to service customers active in the Horn river Basin and satisfy the future housing demand we antici-pate from increased B.C. natural gas exploration and production stemming from LNG export proj-ects,” said Black Diamond Group’s president and chief executive officer, Trevor Haynes.

The facility has been operated by a North Ameri-can energy producer and managed by Black Dia-mond since 2008.

Black Diamond said it will operate the facility as an open camp. There are currently three an-chor tenants, whom are active in exploration and production.

The company foresees revenue to exceed $17 million through 2015.

In 2009, Black Diamond and the Fort Nelson First Nation entered into an equity-based agree-ment called Black Diamond Dene LP.

According to the company’s website, the goal has been to provide customers in the area with a quality, competitively-priced service while in-cluding the Fort Nelson First Nation people in the benefits that come with the development of their traditional lands.

Black Diamond Group is one of North America’s leading providers of remote workforce housing. The Calgary-based company is one of the fastest growing remote lodging, modular building and energy services companies in the world.

Northern British Columbia is home to one of the largest untapped natural gas deposits in the world.

Apache has confirmed a shale play in the Li-ard Basin that has a net estimated sales gas of 48 trillion cubic feet (Tcf) of natural gas, or 8 billion BOE, across 430,000 acres held with a 100 percent working interest.

Apache also has interest in 200,000 net acres in the adjacent Horn river Basin, which it calls “one of the highest-quality unconventional gas plays in North America.”

MATT LAMERSStaff Writer

FNFN company picks up LNG camp contract

do you tweet?

So do we. Fire up that google machine of yours and Find Pipeline News North on Twitter, @pipelineNN. We’re also on Facebook: www.fb.com/pipelinenewsnorth

Page 14: Pipeline News North July 2014

14 • PIPELINE NEWS NORTH

@pipelineNN

premier was in fsj & dawson

creek for a few hours, but

in that time she rallied her

troops, met critics and checked

in on the industry that will

make or break her legacy.

Christy Clark met with First Nations leaders in Fort St. John before flying to Dawson Creek to speak at two separate LNG events on June 20.

Before the day was over, she met with party faith-ful at a dinner event. And from there, Clark boarded a plane back to Victoria.

The visit was not with-out its share of important announcements. Perhaps most immediately impact-ful to the Northeast, the government announced a moratorium on oil and gas drilling within one kilome-tre of schools.

related story on Page 18.

Clark also announced a deal with AltaGas, poten-tially worth $250 million, to develop LNG infrastructure

in B.C. focused on helping homes and business in the North switch from diesel or propane to natural gas, which a government re-lease called “the first agree-ment of its kind for domes-tic LNG.”

The linchpin of the agree-ment, as previously report-ed by the Alaska Highway News, would be an LNG processing facility near Dawson Creek, expected to cost $22 million.

However, despite unoffi-cial reports before and dur-ing the visit that the plant was essentially a done deal, the letter of intent between Clark and AltaGas still says the company is only “con-sidering” such a facility at this time.

Still, for the premier, it was mostly another day of checking in on the ground-level aspects of her govern-ment’s high-profile LNG strategy.

The premier began her day in Fort St. John after a trip to Kitimat – the other

side of her government’s dream of getting B.C. gas to the world market.

At her first stop in the Peace, Clark sat down for a last-minute meeting with Treaty 8 leaders to address local First Nations concerns about the environmental impacts of development in the region.

Late last month, Treaty 8 Tribal Association Chief Liz Logan delivered an in-vitation to Clark at an LNG conference in Vancouver, asking for a meeting on June 21 to coincide with National Aboriginal Day. As previously reported, Logan had received no reply from the premier’s office as of June 9, but Logan updated the Alaska Highway News in her regular column on Friday that the premier had in fact found time to meet.

Clark told the Alaska Highway News that the meeting was productive, and included an open in-vitation for chiefs to meet with her.

Jonny WakefieldStaff Writer

CLARK lands in the peace

the B.C. premier was in the Peace region on June 20, meeting First Nations leaders in Fort St. John before going to Dawson Creek to speak at two separate LNG events. CourtESY PhotoS

Page 15: Pipeline News North July 2014

PIPELINE NEWS NORTH • 15

dAwson [email protected]

LNG Canada signed up UrS Corporation to be its main information contractor through the FEED phase of development.

UrS’s work will involve configuring, imple-menting and supporting an engineering en-vironment that enables the liquefied natural gas project to create and share information through a central and globally accessible platform.

The company said this represents a shift in how the industry leverages technology to gain efficiencies and improve the quality of information.

“We look forward to providing our skilled re-sources, in multiple locations and time zones, to support the LNG Canada project,” said mark Costello, UrS general manager. “LNG Canada has chosen us as a partner to ensure coordinated, consistent, complete, and accu-rate data for the entire project life cycle.”

UrS will work closely with LNG Canada’s main contractor, CFSW LNG Constructors, which is a joint venture between Chiyoda Cor-poration, Foster Wheeler AG, Saipem S.p.A and WorleyParsons Ltd.

The contract will run through the duration of the project’s front-end engineering design phase.

LNG Canada comprises Shell Canada Energy (50 per cent), an affiliate of royal Dutch Shell, affiliates of PetroChina (20 per cent), Korea Gas Corporation (15 per cent), and mitsubishi Corporation (15 per cent).

Announced in 2012, LNG Canada proposes building an LNG export terminal, including marine facilities, facilities for storage and a gas liquefaction plant.

TransCanada’s Coastal GasLink Pipeline will feed natural gas produced in Northeastern B.C. to the plan in Kitimat. A 48” diameter, 650 km pipe will begin near Dawson Creek.

San Francisco-based UrS Corporation has more than 50,000 employees in nearly 50 countries.

Shell has said it expects to make a final in-vestment decision as soon as 2015, although significant challenges remain, such as labour projections, the province’s so-called LNG In-come Tax and gaining the consent and partici-pation of First Nations.

MATT LAMERSStaff Writer

LNG Canada hires URS to streamline information

“What we talked about was resetting our government-to-government relationship, finding a way for us to sit down together and work through all the cumulative impacts [of LNG development],” she said at an event at her next stop, Northern Lights College in Dawson Creek, later the same day.

But also in Clark’s answer was a warning to those who would wish to slow the race to export LNG to lucrative Asian markets.

“One of the points that I made was that many First Na-tions people are in the natu-ral gas industry here. One of

the things we need to come to grips with is that we either need to export this resource and grow the industry, or we are going to see this industry shrink, along with the num-ber of jobs and opportunities in the Northeast,” she said. “The price of gas is not high enough in North America to sustain the jobs that are here today.”

Logan could not be reached for comment.

The next step of Clark’s race to the sea will be developing a tax on gas – without which companies will not make de-cisions to invest in B.C. gas fields.

Clark said she was “abso-lutely rock-solid certain” that the LNG tax would be com-pleted in the fall legislative session. However, she gave no hints on what the final tax rate on the resource might look like, beyond saying, “If we set the tax rate too high, we will get 100 per cent of zero.”

She has said that all govern-ment-related costs, including the LNG tax, will be finalized by Nov. 30, which is essential to proponents reaching final investment decisions. Ana-lysts think there could be one or two FID by year-end if the tax is met favourably by the LNG players.

Clark appeared next at the Encana Water resource Hub outside Dawson Creek – a fa-cility that extracts saline wa-ter from underground for use in fracking operations. There, she donned black coveralls (monogrammed with “Chris-ty”) and mingled among a crowd of workers in red and blue.

If LNG in B.C. is to suc-ceed, Clark will need many more workers like those at the Encana facility.

As she told the Alaska High-way News, the short supply of workers is a big concern for both the LNG industry and the Site C dam, which has yet to win the government’s go-ahead.

Clark said Site C, if ap-proved, would not compete for workers with LNG devel-opments. The dam was ap-proved tacitly by a Joint re-view Panel earlier this spring despite many critics. Her gov-ernment has until September to make a final decision.

With her whirlwind tour complete, Clark was back on a plane south just after 6 p.m.

‘From the very

beginning, and

every step of the

way, our

partnership with

First Nations will

ensure that we

all benefit from

traditional and

ecological

knowledge, while

respecting their

rights to full

consultation and

accommodation.’

DrILLING from PAGE 13

Drilling licenses provide the exclusive right to explore for natural gas by drilling wells for terms of three, four or five years depending on location.

Leases provide the exclusive right to the successful bid-der to produce natural gas or

oil. They are acquired by at the Crown sale, which is held monthly, or selected from per-mits and drilling licenses.

Terms are usually five or 10 years, depending on the location of the land that is sold.

revenues from natural re-source land auctions fund social programs and infra-

structure development in communities throughout the province.

A portion is also rein-vested in infrastructure to support the natural gas sector.

The next sale is scheduled for July 16.

It will offer 14 parcels cover-ing 5,465 hectares.

5,465 ha on block in July’s auction

Page 16: Pipeline News North July 2014

16 • PIPELINE NEWS NORTH

R001697743

fb.com/pipelinenewsnorth

A report issued by the University of Calgary’s School of Public Policy in July adds to the volume of literature that underscores the issues that re-main for B.C. to fully take advantage of its burgeoning natural gas industry.

Following are parts of inter-views conducted over the past eight months with industry leaders about crucial factors, which include, labour shortages, new markets and foreign competition, regulatory hurdles, First Nations, the environment and win-ning over the public.

Filling jobsPhillipe reicher, vice president of

external relations for the Canadian Energy Pipelines Association, told

PNN that the shortage in skilled la-bour has been an issue for a long time and there are plans in the works should a number of projects receive affirmative FIDs.

“This is a concern of ours,” he said. “We are actually talking about if it would be worthwhile to take a more industry approach to deal with this issue. Because as you know, pipelines are a funny animal in that we need a significant number of workers dur-ing construction and the operation is quite small at after it’s finished.”

A Natural Gas Workforce Strategy Committee report issued last year said more than 60,000 people will be needed to construct LNG plants and pipelines during peak construction in 2016 and 2017. Another 75,000 work-ers will be needed to fill permanent positions after they are completed.

The natural gas industry in North-ern B.C. employed 13,235 people in

2012. “It’s heavy equipment operators, la-

borers, those types of folks, that we’re going to need during the construc-tion,” said reicher. “That’s going to be a real challenge. Particularly if we’re building pipelines at the same time as you have major plants being built. A lot of those jobs are using similar attributes, so it’s going to be a real challenge.”

The Petroleum Hr Council is act-ing. It launched the Careers in Oil + Gas Initiative, which involves the on-line portal Careersinoilandgas.com.

Carla Campbell-Ott, executive di-rector of the Petroleum Hr Council, said it’s part of the strategy to head off the looming labour crunch.

“It’s real,” Campbell-Ott said of the looming labour shortage. “Yes there is a huge labour shortage looming. Absolutely.”

The Premier’s LNG Working Group

was established in 2013 comprising government, industry, labour rep-resentatives and First Nations. After meeting nine times, they presented 15 recommendations on skills train-ing for LNG development.

Their recommendations were ac-cepted in entirety by Premier Christy Clark.

David Pryce, VP of operations for Canadian Energy Pipeline Associa-tion, said labour is the hidden chal-lenge. “We’re going to expand great-ly, LNG is going to expand greatly, oilsands continues to grow, the min-ing business is now talking about ex-panding, the forestry business is talk-ing about expanding, so there’s that perfect storm of economic opportu-nity but the labor supply becomes the challenge,” he said.

New markets and competition“So is B.C. falling behind in the race

matt lamersStaff Writer

lng’s BIG challengesFor B.C. to fully take advantage of its natural gas, it’s going to have to solve a number

of outstanding issues, according to experts reached by Pipeline News North – namely

mCT PHOTO

Page 17: Pipeline News North July 2014

PIPELINE NEWS NORTH • 17

R001642872

speCiAl [email protected]

to capture the market?” asked Len Coad, director of the Cen-tre for Natural resources Policy. He said the message is clear: the province is late to the party but is making great strides to catch up.

Coad and Pawel mirski coau-thored a report that assessed the potential of B.C.’s LNG industry. They said the province’s vast gas reserves will be successfully marketed if certain conditions are met: The government and industry must outmaneuver their competitors; the govern-ment should prepare for differ-ent development scenarios in the event that projected produc-tion and revenues build slowly; and greater attention ought to be paid to ensuring that price competitiveness is maintained.

The key plank here is the so-

called LNG Income Tax, which the province has yet to unveil.

Gary Weilinger, vice presi-dent of strategic development and external affairs for Spectra Energy, said Asia is an essential part of the equation in exporting B.C.’s LNG.

The United States has tradi-tionally been the only destina-tion for Canada’s natural gas, but significant discoveries of de-posits there mean the country is less dependant on its northern neighbour.

Last year saw Canadian natu-ral gas exports to the United States fall to the lowest level in 19 years, according to recent data by the U.S. Department of Energy (DOE).

“The other thing is this whole notion of finding a new market for our gas. Japan, Korea, China,

potentially India,” said Weil-inger. “If we don’t do that, and we think that we’re just going to use it ourselves, what we’re already starting to see is that be-cause the U.S. is more prolific in terms of its gas resources, we may lose our biggest market. And we’re starting to see that al-ready.”

Weilinger added that getting B.C.’s gas to the coast where it can be liquefied and exported is key to developing it, because “here in the northeast, [we’re] furthest from any of the demand centres.

“The pipelines are absolutely essential, because we need ac-cess to new markets. The sooner we can get access to these mar-kets the better,” said Weilinger.

Pryce echoed the sentiment. See PIPELINE on PAGE 24

DEVON PHOTO mATT LAmErS PHOTO

Encana Corp. has sold off Bighorn natu-ral gas assets in Northwestern Alberta and Northeastern British Columbia to Calgary-based energy firm Jupiter resources for $2 billion.

The 360,000 net acres of land is located in the Deep Basin play.

The deal also includes all related pipelines, facilities and service arrangements.

“Bighorn is a high quality asset that has not been receiving significant investment in 2014,” said president and chief executive Doug Suttles.

The sale comes about one year after Encana sold natural gas assets in the United States and its U.S.-based liquefied natural gas (LNG) unit in April.

In that deal, Encana relinquished itself of all assets related to a Denver-based LNG unit to Texas-based Stabilis Energy. It closed April 30, 2013.

In may, Encana announced plans to buy a significant oil play in Texas for more than $3.1 billion

After taking over about one year ago, Suttles cut about 20 per cent of Encana’s workforce.

MATT LAMERSStaff Writer

Encana sells some gas assets in Alberta & B.C.

mATT LAmErS PHOTO

labour, first nations, regulatory hurdles, environmental

challenges, global competition and winning the pr war.

Page 18: Pipeline News North July 2014

18 • PIPELINE NEWS NORTH

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According to the ministry of Natural Gas Development, there have been no permits issued for oil and gas wells located within a one kilometre radius of schools for the past four years – and no one is trying to get one now.

Nevertheless, elected officials – and at least one local resident – praised the move.

“We are putting exclusion zones into policy to maintain a respon-

sible natural gas and oil sector,” said B.C. minister of Natural Gas Development rich Coleman. “Through strict regulations and policy procedures, the BC Oil and Gas Commission is upholding the health and safety of the public while overseeing the development of our energy future.”

“I fully support this policy of im-plementing mandatory setbacks of one kilometre from schools,” said South Peace mLA mike Bernier.

Brian Derfler, a Farmington res-

ident and member of the Peace Environment and Safety Trustees Society (PESTS) said “that compo-nent is great.”

He noted that there were al-ready other protections in place for wells within that one kilometre distance, as they were already the subject of an enhanced review, a rule that started in 2010.

“(Not drilling within a kilome-tre of schools) was already kind of an almost accepted rule,” Derfler added.

Derfler said that he would have

liked to have seen the setbacks for these oil and gas wells go further.

A report issued by the Universi-ty of Victoria Environmental Law Centre on behalf of PESTS called for a “minimum 1,500 meter set-back from a school’s property line for all pipelines, wells, and facili-ties containing H2S.”

(H2S, or hydrogen sulphide, is sometimes used in natural gas wells, and is poisonous to humans if released into the open air.)

When asked about the setback proposed by the Environmental

WILLIAM STODALKAStaff Writer

The B.C. government recently announced it would not allow new gas wells to be drilled within 1 kilometre of schools. But the move shouldn’t come as too much of a concern to gas companies.

School’s out for drilling

Page 19: Pipeline News North July 2014

PIPELINE NEWS NORTH • 19

industry [email protected]

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Law Centre, Bernier said that he had lobbied for the new exclusion zone based on what he heard from constituents – and was not influenced by the Law Centre’s report.

The ministry also said that they were not influenced by the Law Centre’s report in their decision.

“From my perspective, it’s always about listening to the people in the area, and trying to help them,” he said. “We understand that we always have to have that relation-ship; doing it best, as safely as possible, which is what we’re striving to do, to work with companies and their regula-tion around social license.”

He also said that even though there was earlier leg-islation regulating gas wells near school zones, this one sent a stronger message to the petroleum industry.

“There’s no question now that they would never be able to apply,” he said. “It puts them into regulation, so it’s ‘Don’t bother asking, because

we’re going to say no.’” Bernier went on to say that

these exclusion zones also ex-clude other “natural gas activ-ity” such as new pipelines or H2S facilities.

The announcement did not address any wells that had al-ready been drilled within one kilometre of schools.

According to the Environ-mental Law Centre report, at least three schools within School District 59 – in and around the Dawson Creek area – have at least one within the one kilometre school lim-it. In the North Peace area of the province – in and around the Fort St. John area – there is one school, Upper Pine El-ementary.

Eleven existing wells are currently operating within one kilometre of a school, the ministry of Natural Gas De-velopment said. They were recently inspected by the BC Oil and Gas Commission to ensure no leaks, spills, odours or other harms were found. All safety measures were con-

firmed to be in place.These wells will remain

in operation until they are shut down, after which the sites will be remediated and no wells will be permitted in these areas.

Bernier said that he was not aware that there were wells that were already drilled with-in one kilometre of schools. He said he would have to fol-low up with the BC Oil and Gas Commission on that issue.

In 2010, former Peace river South mLA Blair Lekstrom made a similar promise. He said that there would be a 1,000 metre exclusion zone for drilling near schools.

Lekstrom also promised that there would be an addi-tional 1,000 metre enhanced management area for these areas.

Currently, the BC Oil and Gas Commission conducts an enhanced review for any well applications within two kilometres of a school, the ministry said.

SemCAmS announced plans to construct a sour gas gathering pipeline near its existing Northwest Wapiti Pipeline.

The project is economical due to a 10-year ser-vice agreement with NuVista Energy Inc.

“SemCAmS is pleased with NuVista’s commit-ment and the confidence they have in our ability to handle their liquids rich Wapiti area gas produc-tion,” said general manager at SemCAmS, David Williams.

See PIPELINE on PAGE 29

MATT LAMERSStaff Writer

SemCAMS announces new Montney pipeline

Page 20: Pipeline News North July 2014

20 • PIPELINE NEWS NORTH

fb.com/pipelinenewsnorthenvironment

A small group of researchers at the University of British Co-lumbia’s Clean Energy research Centre are one step closer to a so-lution for one of the biggest chal-lenges in the LNG industry.

Under the direction of David Wilkinson, professor and Canada research chair, chemical and bio-logical engineering, the group has developed a technology that reduces the carbon footprint

and cuts water use for shale gas extraction.

Alfred Lam, a key advisor on the research group, said that’s where they see biggest potential.

“Where we see the biggest im-pact is reducing the carbon foot-print as well for the water use for tight oil and shale gas,” he said in an interview. “It’s becoming in-creasingly important both in B.C., as well as in Alberta. That’s where we see the highest value.”

If successfully commercialized, the group thinks it could help in-dustry with a “social license” to develop petroleum resources.

“We see it as contributor to a so-cial license to operate for many of these oil companies,” he added.

The group doesn’t expect to have the technology ready to be commercialized for at least five years.

Wilkinson started the group in 2004. Lam was his first PhD stu-dent. Also involved in the project are Saad Dara, PhD candidate, and Arman Bonakarpour. The re-search is being done in collabora-tion with Simon Fraser University professor Steven Holdcroft.

In may, the UBC team and SFU collaborator won a $500,000 grant

from the Climate Change and Emissions management Corpora-tion to scale up and commercial-ize the technology.

The CCEmC seed funding will be used to prove the performance as well as the economics. The sec-ond phase, which is also in line with the CCEmC grant, is to ramp up the process to a scale equal to 10 barrels of waste water per day. Following that, they will get up to about 1,000 barrels per day before commercialization takes place.

The CCEmC grant will fund the project for the next two years.

Beyond that, it could take

What if a technology was already developed that would reduce the amount of water needed for hydraulic fracturing?

Matt LamersStaff Writer

A DEVON DrILLING OPErATION AT HOrN rIVEr, BrITISH COLUmBIA

neW fracking Tech cuTs WasTeWaTer, co2

Page 21: Pipeline News North July 2014

PIPELINE NEWS NORTH • 21

industry [email protected]

July 12The 31st Annual Oilmen’s Trapshoot will be

hosted by the Fort St. John Oilmen’s Associa-tion. www.fsjpetroleumassociation.com

Aug. 15-17The 5th Annual Family Weekend will be hosted

by the Fort St. John Oilmen’s Association. www.fsjpetroleumassociation.com

Aug. 20-23 The Fort Nelson Petroleum Association is

holding its annual Golf Tournament in August. www.fortnelsonpetroleumassociation.com

Sept. 16-18The Canada LNG Export Conference will he

held on Sept 16-18 at the Calgary Convention Centre. www.canadalngexport.com

Sept. 30-oct.1BC Oil & Gas Conference will be held in Fort

Nelson at the end of September.www.northernrockies.ca

oct. 22-25The Fort Nelson Petroleum Association is

holding it next Hockey Tournament in October.

www.fortnelsonpetroleumassociation.com

Nov. 12-15The 54th Annual Oilmen’s Bonspiel will be

hosted by the Fort St. John Oilmen’s Associa-tion at the FSJ Curling Club.

May 2015The LNG Export & Infrastructure Canada Forum will be held in may. Location TBD.

Infrastructure and gas market strategies for ensuring cost effective and profitable Cana-

dian LNG exports. www.ibcenergy.com/event/LNG-Export-and-

infrastructure-Canada-conference

MATT LAMERSStaff Writer

Oil & gas industry events through 2014

mATT LAmErS PHOTO

another two years for scale up and demonstration.

The technology itself is an advanced electrodialysis sys-tem, Lam explained. It works like this: On the front end it takes high salinity water and carbon dioxide and on the back end produces oil field chemicals like hydrochloric acid and carbonated salts, chemicals that are typically used as part of the fracture fluid in shale gas and tight oil extraction.

The process also produc-es desalinated water, which can be reused for front end extraction.

“Overall, because you’re re-using the water, you’re sourc-ing less fresh water and dis-posing less waste water,” said Lam. “That really accounts for a big part of the CO2 mitigation.”

Lam is an associate at Van-couver-based Chrysalix En-ergy Venture Capital, which specializes in early-stage clean energy projects.

Before joining Chrysa-lix Energy Venture Capital’s

team, Lam was part of the research group at UBC. He’s been keeping track of the project and helped them put together the Climate Change and Emissions man-agement Corporation grant application.

Since then, his role has been to work on market anal-ysis and the economic side, to figure out whether there’s an opportunity for a spin-off company.

In shale gas extraction, about 15 per cent flowback comes back up. The new technology will be able to re-use some of that wastewater. “That means you’re sourcing less fresh water,” said Lam.

If the technology is com-mercialized, the business model Lam prefers is a joint venture with a services com-pany, where the latter would provide the capital to build the systems and the UBC team would contribute the technology.

“It still needs to be worked out how that value is shared,” he said.

‘because you’re

reusing water,

you’re sourcing

less fresh water

and disposing

less waste

water,’ said

Lam. ‘That

really accounts

for a big part

of the CO2

mitigation.’

COUrTESY PHOTO

CONOCO PHILLIPS PHOTO

Page 22: Pipeline News North July 2014

22 • PIPELINE NEWS NORTH

fb.com/pipelinenewsnorth

rEFINErY from PAGE 7

Pacific Future Energy is a Van-couver-based company headed up by B.C.-native and CEO robert Delamar and Executive Chairman Samer Salameh, whose funding group provides financial backing for the proposed project.

Salameh manages telecommu-nication practices for Groupe Sali-nas, owned by mexican billionaire ricardo Salinas, but Pacific Future is an independent company.

Cost and production: The first

phase of the refinery project will come at a cost of $10 billion, pro-ducing approximately 200,000 barrels per day. The refinery is de-signed to consist of five modules at a total of 1 million barrels per day. With each subsequent mod-ule costing approximately 60 per cent of the initial piece, the pro-jected cost at build out is more than $30 billion.

Location: Pacific Future is con-

sidering three options for the re-finery site, all located on major

water sheds.“Prince rupert is the leading

candidate right now but we also have visited Kitimat and begun some discussion with local folks,” said Delamar, adding that the third site is further north but would not yet be disclosed.

Product: The refinery will con-

vert bitumen into gasoline, diesel, kerosene and other distillates.

Job potential: Delamar said the

forecasted job opportunities were in line with other proposed refin-ery projects, suggesting between 2,500 and 3,000 full time jobs would be created after comple-tion. For short-term positions, he said between 6,000 and 10,000 construction jobs are predicted to open.

relationship with First Nations:

An early hire for the company was Vice-President, Indigenous Part-nerships, Jeffrey Copenace. An Ojibway of Onegaming First Na-tion in Northwestern Ontario, Co-penace was deputy chief of staff to

former Assembly of First Nations chief Shawn Atleo.

“From the very beginning, and every step of the way, our partner-ship with First Nations will ensure that we all benefit from traditional and ecological knowledge, while respecting their rights to full con-sultation and accommodation,” Copenace said in a release. “All with the goal of shared prosperity and health for future generations.”

The company has pledged a full partnership with First Nations on the project and Delamar said they have approached this by having conversations with stakeholders early on.

“We’ve just begun the conversa-tions. We basically looked at what Enbridge did and we’re trying to do absolutely everything the op-posite,” said Delamar. He said Co-penace has begun the outreach and discussions with local First Nations and stakeholders and the company is continuing on from there.

“Our simple goal at this point is to begin the conversations, to lis-ten and then take the further steps

as local First Nations so desire.” Environmental policy: Pacif-

ic Future has claimed to be the “greenest refinery in the world”.

“Our ultimate business objec-tive is to create something called a near zero net carbon emission refinery. We intend to add as little or close to zero net emission from the refining process to the local air shed as possible, so that’s the stat-ed business object,” said Delamar. “Since a zero net carbon emission refinery has yet to be built in the world, this will be the first to at-tempt what we’re doing. We will get near or as close to zero as pos-sible and so it’s that getting near to zero that makes it the greenest refinery in the world.”

The components that contribute to this effort include carbon cap-ture and sequestration, which in-corporates several methods such as repurposing emissions and gas to liquid technology. The refinery will also be powered by natural gas, rather than coal or diesel.

The design was undertaken by milan-based engineering and

P A C I F I C F U T U R E E N E R G Y

E A G L E S P I R I T E N E R G Y

Eagle Spirit Energy is an Aborig-inal-owned and operated com-pany headed up by Chairman and President Calvin Helin. The company is financially backed by The Aquilini Investment Group, owners of the Van-couver Canucks and rogers Arena.

Eagle Spirit Energy was formed specifically for this project and Helin said, “This all began about two years ago but our first intention was to first of all go out and listen to the com-munities and to see what they would accept, if anything, for an oil pipe-line coming through the province and looking at it, in light of the fact that oil is so important to the GDP in Canada, at some point this is going to be inevi-table.”

Cost and production: A cost of $15 to $20 billion is estimated for pipeline construction and approximately $30 billion for the upgrader that will pro-cess 1 million barrels per day.

Location: With a refinery in either

Northern Alberta or Northeastern B.C. Eagle Spirit has signed non-disclosure agreements with three coastal com-munities that are potential port loca-tions. Helin emphasized that Kitimat is not one of the three ports.

Product: synthetic crude oil. Job potential: during construction,

Helin forecasted approximately 7,000 to 10,000 jobs between the pipeline and upgrader projects. After build out,

Cover story

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Page 23: Pipeline News North July 2014

PIPELINE NEWS NORTH • 23

industry [email protected]

The petroleum industry is in the midst of one its strongest decades of all time, according to the Ca-nadian Association of Oilwell Drilling Contractors (CAODC)’s updated Drilling Activity Forecast.

The revised figures project second quarter activ-ity to be 23 per cent utilization with 17,342 operat-ing days, which is an increase from last November’s projections of 19 per cent utilization and 14,230 operating days.

“This is the strongest second quarter we’ve seen in seven years,” says mark Scholz. CAODC president.

Operating days for the second quarter of this year will surpass 17,000, whereas operating days ranged from 8,411 (2009) to 16,369 (2011) over the last sev-en years.

“Stronger gas prices have increased cash invest-ment to the industry,” says Scholz.

The CAODC updates first and second quarter ac-tivity every spring.

The first quarter is typically the busiest for the industry, but this year the second quarter is taking the spotlight.

The CAODC explains that drilling in Western Canada follows a distinct annual cycle that closely follows temperatures.

rig utilization and operating days are highest in the first quarter when the ground is frozen, mak-ing more areas accessible. Second quarter activity drops due to the spring thaw, a.k.a. spring break-up. Work starts to pick up again in the third quarter in anticipation of cold weather in the fourth quar-ter, which creates more opportunity.

CAODC’s revised 2014 forecast shows actual first quarter activity figures and revised projections for the rest of the year.

First quarter: rig utilization in Western Canada averaged out to 64 per cent; 521 rigs were active out of a fleet of 809. Operating days for the first quarter totalled 44,721.

Second quarter: rig utilization comes in at 23 per cent with 17,342 operating days, which is an increase from last November projections of 19 per cent utilization and 14,230 operating days.

Third quarter: Activity is projected to be 45 per cent and 33,818 operating days.

Fourth quarter: Activity is projected to come in at 48 per cent with 36,072 operating days.

MATT LAMERSStaff Writer

Strongest Q2 in seven years: CAODC

mATT PrEPrOST PHOTO

contracting company Sime-co which has experience in building refineries under Eu-rope’s stringent regulations.

“They’ve designed a num-ber, so they completed front end engineering design for a couple of other refineries in Europe that incorporated a lot of green technology. In par-ticular, in Italy they designed a refinery for Eni which is the national petro-chemical com-pany in Italy,” said Delamar. “It basically incorporated some of the leading carbon capture and sequestration technology, which we’re also looking at for our design.”

In terms of green refineries, Delamar pointed out that the majority of green technology initiatives have gone towards traditional crude oil, making Pacific Future’s plans another first.

Transportation: There is

currently no pipeline involved in the project and Delamar was very clear that they are

not in the business of building pipelines.

“The initial refinery design, in the first 200,000 barrel per day capacity, is not dependant on a pipeline. We would antic-ipate in that initial space and time that rail would be used as an alternate method of trans-portation if the pipeline issue isn’t sorted out,” said Dela-mar. “Obviously, pipelines feed refineries so if there is a pipeline we would use it but we designed the refinery – one of the reasons we have the five tranches of capacity – in the manner we have so that we could make this entirely in-dependent of the pipeline project.”

moving forward: The

company has begun pre-feasibility studies analyzing economic, social and envi-ronmental impacts of the refinery in order to select a prospective site.

“There’s a project man-agement philosophy called

the Gates Theory of Build-ing refineries, there’s ba-sically four gates that lead to ultimately putting shov-els in the ground,” said Delamar.

The company announced mid-June that they would begin pre-feasibility stud-ies, prior to which they spent the past six months incorporating the company, hiring management, open-ing an office and beginning pre-pre-feasibility studies which Delamar said en-sured that the project made sound economic sense.

“With that pre-pre-feasi-bility activity was the busi-ness case, as well as the refinery design that could, within the state of metric of $10 billion capital ex-penditure, allow us to build the greenest refinery in the world,” said Delamar. “So the question was can you do it with this budget, in this geography? And the answer came back yes.”

he estimated 10,000 long-term jobs for community members.

relationship with First Na-

tions: The project is Aborig-inal-owned and controlled and boasts the key objective “to assist aboriginal commu-nities and individuals to be-come successful with manag-ing economic opportunities in their traditional territo-ries,” said Helin.

Helin is a member of the Lax Kw’alaams First Nation, an award-winning author, entrepreneur and advocate of indigenous self-reliance. He has said that the project,

and it’s location near Prince rupert, comes out of concern for a lack of transparency and respect for the environment and affected communities that have plagued recent en-ergy projects such as North-ern Gateway.

Notable Aboriginal busi-nessman Dave Tuccaro of the mikisew Cree Band is among the board members for the company.

Tuccaro is President and CEO of the Tuccaro Inc., an investor in the oil and gas industry and is the found-ing president of the Na-tional Aboriginal Business Association.

“major corporations do not understand that the era of business-as-usual approach to offering beads and trinkets to First Nations for projects in their traditional territory is over,” Tuccaro said in re-lease. “Aboriginal people are not anti-business and they recognize the opportunities that development brings, but projects need to be done on their terms.”

Eagle Spirit has received preliminary support from various First Nations in B.C. and is seeking the same sup-port in Alberta.

See rEFINErY on PAGE 25

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=

Page 24: Pipeline News North July 2014

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PIPELINE from PAGE 17“You have gas coming on stream in

northeast U.S. and in Texas that is our traditional market, which means they have an advantage because they’re there and we have a long way to move our gas,” he said. “So for B.C.’s gas to be successful, it needs to have LNG. We need to be looking to alternate markets.”

British Columbia’s legislators un-derstand the urgency.

minister of Natural Gas Develop-ment rich Coleman travelled to Asia with the premier twice in the last sev-en months on what were essentially sales campaigns for B.C. LNG.

regulatory hurdlesCritics, most notably the authors of

the University of Calgary study, have noted a lack of policy and regulatory co-ordination, which they say puts Canada at a competitive disadvan-tage with foreign competitors.

However Paul Jeakins, commis-sioner and CEO of the B.C. Oil and Gas Commission, does not see gov-ernment regulations as “roadblocks” per se, and that view that was echoed by a number of people in the local oil and gas industry when contacted by PNN.

“We just see them as taking the right amount of times to make the right de-cision,” he said in an interview. “So from our perspective, there are no delays. First Nations wants to talk to us more about an application, we’re more than willing to talk about that.”

The Environmental Protection management regulation doesn’t cre-ate delays, he said, it creates an envi-ronment that fosters more discussion on a particular topic.

The Act was modernized in 2010. “One of the things that we’re do-

ing through our technical regulations is updating and creating a liquefied natural gas regulation,” he said. “So we do have LNG facilities in the prov-ince that are pretty small, and we have a regulation to cover that. But not with the larger plants coming; that’s some-thing we’ve felt needed updating. So we’re updating our natural gas regula-tion. That’s going to be rolling out over the next year or so.”

Senator richard Neufeld said he’s satisfied with the regulatory regime, which he had a hand in creating when he was British Columbia’s minister of energy, mines and petroleum re-sources from 2001 to 2009.

“I think we’re doing it very effec-tively now, and I’m not sure whether there’s any thought that it’s not go-ing fast enough. I guess some people want it to happen on Friday morning, but these kinds of things take a while to get done,” he told PNN.

“[Energy companies] don’t make decisions on billions of dollars in in-vestments without first having the markets tied up and knowing they have the product that they can deliv-er. Those things take some time, but I think it’s all moving along relatively quickly.”

See PIPELINE on PAGE 31

Page 25: Pipeline News North July 2014

PIPELINE NEWS NORTH • 25

twitter.com/pipelinenn industry news

Kelt Exploration Ltd. agreed to buy private oil and gas assets in close proximity to its core producing areas at Pouce Coupe and Spirit river in Alberta for $165 million.

The transaction was unveiled in June and is scheduled to close in July.

In a statement, the company said the ac-quisition would be financed with 4.3 million shares and $107 million in cash.

The Calgary, Alberta-based company was formed in 2012 from assets not included in the $3.1-billion sale of Celtic Exploration Ltd. to Exxonmobil.

Kelt says the assets currently produce about 2,300 barrels of oil equivalent per day (70 per cent oil), primarily from the montney for-mation, but also including the Halfway and Charlie Lake formations.

Average 2014 production is expected to climb 10 per cent to 12,150 boe/d this year af-ter the purchase goes through.

Oil output could rise to 3,285 barrels per day, up from an earlier projection of 2,575 bpd.

MATT LAMERSStaff Writer

Kelt picks up Montney assets

The Kitimat Clean project formed in 2012 and is wholly owned by David Black, majority owner of Black Press. The proposed multifac-eted project includes a heavy oil refinery, an oil and natural gas pipeline and a tanker fleet.

Cost and production: $21 billion for a refin-

ery with a production capacity of 550,000 bar-rels per day. Combined costs for an oil and gas pipeline, and tanker fleet would be an addi-tional $11 billion.

KC has said the initial $32 billion in capital costs would be borrowed and repaid within the first 10 years of production.

Location: A 1,150 kilometre pipeline running

from Edmonton will connect to the refinery near Kitimat, on the Douglas Channel.

Product: The pipeline will carry dilbit from

Edmonton to the Kitimat refinery. Job opportunities: The refinery alone is sug-

gested to create approximately 3,000 jobs, as well as an additional 3,000 permanent jobs for petro-chemical businesses in close proximity.

relationship with First Nations: KC has held

consultations with various First Nations with-out announcing any formal agreements.

Environmental policy: The project proposes

to use new Canadian technology, the Fischer Tropsch process, to cut greenhouse gas emis-sions in half when compared to other heavy oil refineries. This will be the first time the process will be used for heavy oil refinery – the method for which was patented in 2013 by Calgary-based Expander Energy.

Through this process, all steam and electrical power needed to run the refinery and half of the required water will be produced internally.

Transportation: A dilbit and natural gas pipe-line will offer transportation through western Alberta to British Columbia’s north coast.

moving forward: A refinery site has been se-

lected and the B.C. government has reserved Crown Land for the project. KC began a two-year Environmental Assessment in may of this year and has asked the federal government to guarantee $10 billion of the borrowed capital costs.

A financing strategy has been developed and enacted through a signed memorandum of un-derstanding with the Industrial and Commer-cial Bank of China, as well a forthcoming sec-ond agreement with the China Development Bank.

Chinese oil companies have also shown an interest in procuring all of KC’s refined fuel.

A representative for Kitimat Clean could not

be reached for comment.

rEFINErY from PAGE 23

Environmental policy: Eagle Spirit seeks to lessen the threat to the coastline in the case of a dilbit spill by refining bitumen prior to export.

“What we learned from our meetings with First Nations, from the border out to the coast, is they don’t want bitu-men flowing through the prov-ince, at least through major water ways and sensitive eco-systems,” said Helin. “That’s why we wouldn’t put it out on the coast, anywhere.”

By building an upgrader in either Alberta or northeastern B.C., the pipeline would trans-port synthetic crude, an amber coloured, lighter form of crude

oil, rather than bitumen. “What we’re looking at is a new type of proven technology that re-duces CO2 by 50 to 80 per cent in the production of synthetic crude oil and it turns the re-ally toxic and undesirable stuff – the dirty part of bitumen, or dirty oil – instead of turning it into petcoke and having piles of the stuff which you don’t know what to do with, what we will do is through this process which is a gasification process that uses LNG, turn that stuff into valuable diesel, the high-est quality synthetic diesel and jet fuel oil,” said Helin.

Transportation: Helin has

vocalized opposition to the Northern Gateway Pipeline

and billed the proposed Eagle Spirit pipeline as an alterna-tive to Enbridge’s controversial project.

moving forward: Helin has

said an application will only be filed to the National En-ergy Board after the concerns of First Nations have been ad-dressed.

“We’re just moving through what I think should be the fi-nal phase in the next couple of months of meeting with First Nations communities and get-ting them to sign on a prelimi-nary basis with us and that’s how were moving forward,” said Helin. “It’s only going to be with the support of First Na-tions communities.”

k i t i m a t c l e a n ==

KITIMAT CLEAN

FrANçOIS BrENCKmAN PHOTO

Page 26: Pipeline News North July 2014

R001697732

26 • PIPELINE NEWS NORTH

[email protected]

facebook.com/pipelinenewsnorth

Fort st. John

What’s an oilmen’s golf tournament without a little rain?

After two blazing-hot afternoons at Lakepoint Golf & Country Club, plum-meting temperatures and heavy rain gave golfers at the 2nd Annual Senior Oilmen’s Golf Tournament a dose of northern reality on the third and final day of the tournament.

Oilmen are so used to having rainy conditions for golf tournaments that Darwin Pimm isn’t about to start com-plaining about the heat the golfers en-dured for the opening two days.

“Any time we can get some nice sunny days we have to be pretty hap-py about it,” said Pimm, chairman of tournament.

The tournament is held July 7 to 9.Numbers are down slightly this year

from 2013’s outing of 72 men and women, but that didn’t change the spirits of those in attendance.

This is the second annual tourna-ment for senior oilmen. In the past the organizers tried to incorporate it with the regular oilmen’s golf tournament, but Pimm hopes the new format will work better.

“We’re confident we’re on the right track. It’s a matter of time before it kicks in and takes pressure off the reg-ular oilmen’s tournament,” he said.

The Fort St. John Petroleum Associ-ation Golf Tournament is played every year at Lakepoint by 304 competitors, the most the course can accommo-date for the three-day tournament.

“The regular oilmen’s has been over-subscribed for many years,” said Pimm. “Normally there is a waiting list of over 100 people, so the intent is to take some of the pressure off and let the seniors go out and have a tourna-ment of their own.”

There are no prizes. Golfers play for the love of the game.

“The oilmen group is a tight-knit community. We form some real close relationships and friendships. This tournament gives us an opportunity to get back together and share some old stories.”

Pimm was born and raised in Fort St. John. His work in the oil industry goes back to his role in a supply store in 1968. He’s also worked on the pro-duction side with Texaco and started a company in 1980.

Bruce Craig is an organizer and player in the tournament.

He said it provides an opportunity to meet people he hasn’t seen in a while, locals and out-of-towners.

Craig attributes the tournament’s success to camaraderie and the popu-larity of the local petroleum club.

“It’s more for fellowship,” said Craig. “You just get out for a few days and have fun.”

Glen Harvey, a 23-year resident of Fort St. John, worked in the oilpatch before retiring. “It’s a fun group of guys,” he said. “It’s pretty laid back, not competitive. It’s good to come out and see people you haven’t seen in a while.”

The first, second, third and fourth flight winners were Greg Palister, reg marshall, Ken Almond and Norm Wat-son, respectively.

right: Glen Harvey tees up on the third day of the Annual Senior Oilmen’s Golf Tournament.

MATT LAMERSStaff Writer

Above: Darwin Pimm, chairman of he 2nd Annual Senior Oilmen’s Golf Tournament, takes a rain break at Lakepoint Golf & Country Club in Charlie Lake. The tournament was held July 7 to 9.

Rain and shine, these golfers go home winners

Page 27: Pipeline News North July 2014

PIPELINE NEWS NORTH • 27

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Page 28: Pipeline News North July 2014

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28 • PIPELINE NEWS NORTH

#LNGinBC

Awaiting application

In July, Petrox resources Corp. an-nounced a co-operation framework with Qingdao Sinoenergy of China and Asiafic Clean Energy of Hong Kong to establish an Alberta joint venture company called Gascana AB Energy Ltd. Liquefaction would take place in Sturgeon County, Alberta, and the LNG would be transported to the West Coast for export via rail.

Pending export decisions

On July 8, 2014, Steelhead LNG ap-plied for five licenses to export LNG from Vancouver Island for 25 years.

On June 20, 2014, WesPac mid-stream Vancouver LLC applied to export up to 400 million cubic feet of liquefied gas a day from a liquefaction plant to be built in Delta, B.C.

On march 5, 2014, Canada Stewart Energy Group Ltd. applied for a per-mit to export 30 mmt of natural gas per month for a period of 25 years from a liquefaction terminal to be lo-cated near Stewart.

On Dec. 18, 2013 Kitsault Energy

Ltd. applied for a permit to export up to 20 million tons of liquefied natural gas per year, for 25 years.

Export approvals

On may 1, 2014, Oregon LNG mar-keting Company received permission from the NEB to export 473 Bcf of nat-ural gas to the U.S., where it will be liq-uefied and shipped to Asia. The export point is the vicinity of Kingsgate B.C.

On may 1, 2014, Aurora Liquefied Natural Gas Ltd. received permission from the NEB to export 2.3 million tonnes of LNG per year for a 25-year term from a terminal near Prince rupert, B.C.

On April. 16, 2014 Triton LNG Lim-ited Partnership received permission from the NEB to export 2.3 million tonnes of LNG per year for a 25-year term from a floating processing plant.

On Feb. 20, 2014 Jordan Cove LNG L.P. was granted approval by the NEB to export 9 million tonnes of gas per year to the U.S. for 25 years, where it will be liquefied and shipped to Asia.

On Dec. 16, 2013, Prince rupert

LNG Exports Limited was granted a li-cense to export 21.6 million tonnes of per year for a term of 25 years.

On Dec. 16, 2013, Pacific NorthWest

LNG received permission from the NEB to export 19.68 million tonnes of LNG per year. Pacific NorthWest LNG has emerged the frontrunner, poten-tially making an FID by year-end.

On Dec. 16, 2013, WCC LNG was granted a license to export 30 million tonnes of LNG per year for a term of 25 years.

On Dec. 16, 2013, Woodfibre LNG

Export Pte. Ltd. earned a license to export 2.1 million tonnes of LNG per year for 25 years.

On Oct. 13, 2011, Km LNG was

granted a 20-year permit by the NEB to export an annual volume of 10 mil-lion tonnes of LNG. It was the first LNG export license issued by the NEB since the deregulation of the natural gas market in 1985.

On Feb. 2, 2012, BC LNG Export Co-operative LLC received a 20-year li-cense from the NEB to export 1.8 mil-lion tonnes of LNG per year.

On Feb. 4, 2013, LNG Canada was

awarded a 25-year permit from the NEB to export 24 million tonnes of LNG per year at a terminal that will be built near Kitimat.

Long-term LNG export projects

Page 29: Pipeline News North July 2014

PIPELINE NEWS NORTH • 29

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Called LNG-Buy BC, the tool is available for pre-registration at the website http://LNGBuyBC.ca.

“LNG-Buy BC is focused on ensuring B.C. busi-nesses have the right tools they need to connect with the incredible opportunity the LNG industry offers,” said B.C.’s minister of jobs, tourism and skills training, Shirley Bond.

In may the LNG-Buy BC tool was demonstrated at an annual LNG conference in Vancouver. The entire platform will launch later this year, and the prov-ince expects it to be a key resource for LNG propo-nents to link up with with B.C. businesses.

Victoria envisions an online platform that will ensure the province’s LNG-related businesses are in

line to reap the rewards of the burgeoning LNG in-dustry.

“When the online regis-try was demonstrated at the recent LNG conference in Vancouver, it was excit-ing to hear extremely posi-tive feedback,” said Bond, who is also responsible for labour.

“We’re encouraged to see businesses already pre-registering for the LNG-Buy BC tool, ensur-ing it will be an effective way to connect B.C.-based companies with LNG proponents.”

Bond encourages all B.C. businesses interested in pursuing LNG opportuni-ties to pre-register using the online tool.

The LNG-Buy BC pro-gram has also provided “supplier boot camps” and rFP seminars to more than 300 B.C. companies.

The “Contractor-Sup-plier boot camps” have focused on procurement

opportunities, whereas seminars provide local business owners with the information they need to bid on major contracts.

Bev Vandersteen, head of Fort Nelson and District Chamber of Commerce, said LNG projects are an important opportunity for businesses in the Northern rockies regional munici-pality in particular.

“Through initiatives like the Contractor-Sup-plier boot camps and rFP seminars, we can assist local business in being

prepared for upcoming opportunities.”

The province projects that LNG export could cre-ate more than 100,000 jobs in the province rid B.C. of its $60 billion debt.

There are currently 17 LNG projects that propos-es producing, liquefying and shipping gas produced in British Columbia and Alberta to Asia.

Eleven proponents have export permits in hand, three await a decision by the NEB, and three have yet to submit applications.

‘LNG-Buy BC is focused on ensuring B.C. businesses have the right tools they need to connect with the incredible opportunity the LNG industry offers.’

the provincial government rolled out a tool to connect local B.C. businesses with

international lnG proponents. the entire platform will launch later this year.

Pre-register for LNG Buy BC

the government has been hosting boot camps and rFP seminars to assist local business in being prepared for upcoming opportunities.

PIPELINE from PAGE 19

“We expect increasing amounts of natural gas and natural gas liquids (NGLs) will be attracted to our facilities in the coming years, and we under-stand how important it is to producers that their products get to market reliably and efficiently.”

SemCAmS is a subsidiary of SemGroup Corporation.

The 33 km, 8 inch, pipeline will be called the Northwest Wapiti Loop. It will be capable of trans-porting 30 mmcf/d of a sour gas.

The Northwest Wapiti Loop is expected to be in service in the second quarter of 2015.

The company said the pipeline will deliver pro-duction to SemCAmS’ Kaybob South 3 gas plant.

SemCAmS said it recently improved propane re-coveries up to 90 per cent, added liquids handling capacity, plans to replace its Sulphur recovery Unit Condenser in June 2014 to improve reliability, and added truck and rail loading facilities.

New pipeline will be ready Q2 2015

MATT LAMERSStaff Writer

Page 30: Pipeline News North July 2014

30 • PIPELINE NEWS NORTH

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PIPELINE NEWS NORTH • 31

ClosinG ArGumentfacebook.com/pipelinenewsnorth

‘Most people will agree that the only rational way for governments to deal with major development projects is to base those decisions on facts and expert scientific advice.’

That is why four years ago, the Joint review Pan-el began reviewing the Northern Gateway pipeline proposal. In December 2013, the panel submitted a recommendation to our government that the proj-ect be approved with 209 conditions attached.

After carefully reviewing this recommendation, our Government has accepted the panel’s recommen-dation to impose these

209 stringent conditions that must be met by the proponent.

We have always been clear that projects will only be approved if they are safe for Canadians and safe for the environment. That is why these mandatory con-ditions include strict stan-dards for the construction of the pipeline.

Opponents of the proj-ects do not seem to consid-er just how stringent these conditions are. Before any constructions begin, En-bridge needs to meet 130 conditions. They need to demonstrate the pipe-

line environmental effects monitoring system to the National Energy Board’s satisfaction (conditions 27-35). There must be a separate program for ma-rine environmental effects (conditions 36-38), and the first of these reports need to be submitted within one year. marine mammal pro-tection plans must be in place and submitted to the regulator a full 9 months before construction begins on the Kitimat terminal (conditions 50-51). There are more conditions to pro-tect and restore disturbed caribou habitat (condi-

tions 57-62, 188-190, 194-195), wetlands (conditions 67-70), and fish habitat (conditions 120-122, 125-126).

The conditions put on Enbridge compel them to be continually engaged with local communities, aboriginal groups, research organizations, and stake-holder groups at every step of the process (conditions 30-35, 37-38, 53-56, 78, 89-92, 95-98, 136, 193, 197-198).

Our government has a clear role as a regulator that ensures projects are built and operate safely. It

is the private sector pro-ponents who must dem-onstrate that their projects meet Canada’s world class safety standards.

Canadians expect our government to make rea-sonable decisions which take all relevant factors into account. It is exactly what we did in approving the NEB’s 209 conditions on this project.

All 209 conditions are up on my website at bobzim-mer.ca.

Reprinted with permis-sion. Views expressed are those of Mr. Zimmer’s.

The right call on gatewaynorthern gateway pipeline

kitimat

This is what it isProponents: EnbridgeLength: 1,177 kilometres

Where: Near Edmonton, Alberta to Kitimat, B.C.Price tag: $5.5 billion

PIPELINE from PAGE 24

First Nations and the envi-ronment

In an effort to gain the sup-port of First Nations on es-tablishing the LNG industry and enhancing the environ-mental discourse, the govern-ment plans to create the LNG Environmental Stewardship Initiative (LNGESI) .

The LNGESI creates a plat-form for First Nations, the province and the private sec-tor to form a consensus on environmental issues.

The province has been in communication with First Nations about the projects, but First Nations have been clear they would like to be

consulted more closely by the province and industry.

Pacific Trail Pipelines Lim-ited Partnership has received the message loud and clear.

In February the pipeline company struck a $200 mil-lion deal with a group rep-resenting 15 First Nations whose traditional territories are located along the pro-posed path.

Other First Nations see that kind of collaboration as the way forward.

Some First Nations in Northeast B.C. have business ties with energy companies.

The inaugural B.C. First Na-tions Liquefied Natural Gas Summit last spring took an important step toward form-

ing a cohesive voice. A second summit was

hosted by Carrier Sekani Tribal Council in Prince George in October to fa-cilitate communication and increase awareness regard-ing issues surrounding ex-traction, transportation and processing.

A third summit took place in Fort St. John in February and the latest was held in Fort Nelson, however it was derailed by a misfire from the province, prompting the pre-mier to visit FNFN to mend ties.

All LNG projects site First Nations support as im-portant to their successful implementation.

Public supportAccording to an Insights

West survey of 638 people from last Aug. 22-25, more than half of British Colum-bians are in favor of the gov-ernment’s plan to expand the development and export of LNG. That’s something the province will be looking to improve in the coming months.

Neufeld thinks it boils down to more candid com-munication.

He said protecting the en-vironment is important, but added that petroleum devel-opment shouldn’t be over-looked. Neufeld thinks that natural gas development can actually be beneficial to

the environment because it could displace more harmful energy sources like coal.

“We have to get at the hearts and souls of the people that consume these products, and that’s every one of them. I don’t just mean just driv-ing our cars or heating our homes. We use them every day in thousands of different things we consume on a regu-lar basis.”

bob zimmerMP, Ottawa

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