Pipeline News December 2012

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PIPELINE NEWS Saskatchewan’s Petroleum Monthly

MADE IN

December 2012

FREE

Cobra Industries Ltd. of Delisle builds 400 - bbl. tanks. Alex Karpenko can be seen welding a Ňange. See story Page A24.

Canada Post Publication No. 40069240

Volume 5 Issue 7

Photo by Josh Schaefer

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PIPELINE NEWS December 2012

INSIDE SECTION A 3

ReĮnery expansion complete

6

Editorial

4

CAODC forecasts 2013 blip

7

Opinion

5

Close look at fracking

11 W. BreƩ Wilson redeĮnes success

SECTION B 1 3

TransiƟoning from one-oī to manufacturing BeeĮng up an ag product for the oil patch

6

Fleet Energy opens

9

Magna Fab now in Redvers

SECTION C 1

CAODC drills MPs

10 OilĮeld career day

3

Grit "cold starts" in NB

14 Paradise Hill model for Husky

8

Blue Spark pulse tool

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

WORKING IN THE COLD

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PIPELINE NEWS December 2012

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TOP NEWS

As seen in August 2010, this is the main area of the SecĆ&#x;on 5 expansion of the Consumers’ Co-operaĆ&#x;ve ReÄŽneries Limited (CCRL) reÄŽnery complex in Regina. The major components visible are, from leĹŒ: green pipe racks that carry the arteries of the facility; between the white and red cranes are three small towers that are part of the gas concentraĆ&#x;on unit; below them, on the pipe racks are grey ÄŽn-fan cooling units; to the right of the yellow crane and inside the green structure is the catalyst regenerator; lying below it and to the right are the reactor and main fracĆ&#x;onaĆ&#x;ng column, awaiĆ&#x;ng installaĆ&#x;on; the next two grey towers are the prefracĆ&#x;onaĆ&#x;on tower and the stack of the prefracĆ&#x;onaĆ&#x;on heater. File photo

Co-op ReÀnery expansion complete

„ By Brian Zinchuk Pipeline News Regina – Seven years from conception, four-and-a-half years of construction and a cool $2.66 billion later, it’s done. The Consumers’ Co-operative ReďŹ neries Ltd. expansion has been completed. Scott Banda, CEO for Federated Co-operatives Ltd., spoke to Pipeline News by phone on Oct. 26 after the announcement. He said, “Today we had the oďŹƒcial announcement of the start-up of section V. As of Wednesday, Oct. 17, Section V started up and we are ramping up. It’s up and running!â€? “We maxed out at 5,000 people on this site at the peak of construction. There were two pieces of our construction: Section V and the revamps. The revamps, we’re still a couple months from ďŹ nishing. But we will add 45 per cent capacity to our facility. That takes us up to 145,000 barrels a day.â€? There were 8,000 person-years of construction, with an economic spino of over $5 billion dollars. He said, “To get us through that, about 150 companies worked on the construction. Today we’re pretty excited to celebrate it’s up and producing. “One advantage of our reďŹ nery is we’re very exible on crude weights. We run them all through our facility and yes, part of it does come out of the oilsands. Southeast Saskatchewan crude. Is the “wrong way on the pipeline,â€? and goes the other direction, however. But Lloydminster crude ďŹ nds its way to Regina. “Depending on what the economics are, we can move between light, heavy, sour or sweet. That’s what gives us one of the advantages on the economic side. We can move as we have to, to ensure our production, but also to accommodate the economics,â€? Banda said. Saskatchewan’s daily production of crude oil has risen from roughly 425,000 bpd over the past 10 years to 440,000 bpd. The reďŹ nery will be dealing with some of that increased production, particularly on the Lloydminster side. “Anything that’s up the pipeline, by and large, will come into our facility.â€? “Part of our story here is our ownership. As a co-operative, we’re Western Canadian-based, this is a massive investment in this region in Western Canada.

In Saskatchewan, in particular, in the city of Regina, this will add another 100 permanent jobs. There are 800 permanent employees there, plus another 1,000 we use on annual turnarounds. This is, from our perspective, a commitment to Western Canada’s long term viability. We believe in it. This is our home, here, in Western Canada, of own ownership and retail co-operatives. “That’s a big piece of this story. We have made a massive commitment to the energy business to be here for the long term.â€? Section V will see largely gasoline and diesel production. On Oct 6, 2011, a ďŹ re in an older part of the reďŹ nery injured several workers and damaged one of the areas being revamped. That area requiring extensive rebuilding. “That was in the area where the revamps are. We’re probably about two months away from where we want it. The end of December, early January, we should have that all rebuilt. Where the incident did occur, we tore it right out and rebuilt a whole lot of that facility in that area. “It has put us back a little bitâ€? The ďŹ nal dollar amount, $2.66 billion, was higher than what was initially projected. “The additional cost was productivity. We didn’t get the productivity we thought, on site. (There were) challenges in labour, in Western Canada, in this economy. And frankly, not fully appreciating working in live, existing, operating units aected our productivity. Costs escalated on us. That’s not something we’re really excited about, but that’s the reality. Asked about any more future expansions, Banda said, “This maximizes production from this facility. In other words, is a Section VI likely? Not likely. In order to build a new section, you would have to basically build a new reďŹ nery on the same site. “This maximizes the ability of the process units we have on site. Further expansion on this site – never say never – is not very likely.â€? “This growth was a reection of the growth on the retail side. We built this to accommodate where we are right now with our retail,â€? he concluded.

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PIPELINE NEWS December 2012

BRIEFS CAODC forecasts drilling blip in 2013 CO2 Solutions receives carbon capture patent

A Canadian patent has been granted to CO2 Solutions Inc., which covers the use of a biocatalyst for the eďŹƒcient capture of carbon dioxide. CO2 Solutions, an innovator in the ďŹ eld of enzymeenabled carbon capture technologies, believes the patent may have signiďŹ cant potential for application in the Alberta oilsands, an area of current opportunity for CO2 Solutions and where pure CO2 can be produced at high process temperatures for enhanced oil recovery or geologic sequestration. The main application of the patent includes hightemperature CO2 capture and production processes and mineral-carbonation opportunities where the biocatalyst, which includes the enzyme carbonic anhydrase, may be retained in the CO2 absorption phase to reduce denaturation and losses in the mineral material, respectively. In a prepared statement, company president and CEO Glenn Kelly said the newly-granted patent provides a process option in a number of large industry applications, including in oil and gas production. “It further strengthens our already signiďŹ cant intellectual property in Canada and adds important value to our technology scale-up and commercialization program.â€?

Briefs courtesy Nickle’s Daily Oil Bulletin

„ By Geo Lee Pipeline News Calgary – The 2013 drilling forecast of 10,409 wells by the Canadian Association of Oilwell Drilling Contractors will be hard to digest for some members who were served the news during an association breakfast on Nov. 13. The CAODC forecast is six per cent below the expected 2012 year-end well count of 11,067. The association, that represents the Canadian drilling and service rig industry, arrived at the lower well count for 2013 based on continued uncertainty around commodity prices. The well count also reects the challenge of more complex drilling programs that require more time to drill – an expected average of 11.4 days to drill a well in 2013. CAODC expects the 10,409 wells drilled in 2013 will generate an average of 118,401 operating days. That’s fewer than the 2012 year-end forecast of 126,167 operating days and an average rig utilization rate of 44 per cent. CAODC projects eet utilization in the ďŹ rst quarter of 2013 to be 60 per cent (or 498 rigs) with 44,367 operating days in this period. Second quarter activity that includes spring breakup is projected to have an average utilization of 20 per cent (166 rigs active) and 14,789 operating days. This projection mirrors second quarter activity seen in 2012. For the third quarter of 2013, the forecast calls for a 35 per cent utilization (or 291

Saxon Rig 170 was working for Williston Hunter just north of the U.S. border. Williston Hunter has been very acĆ&#x;ve in the area. Photo by Brian Zinchuk

rigs) and 25,925 operating days. The fourth quarter of 2013 will be higher with the rampup for winter drilling. The CAODC forecast pegs fourth quarter utilization at 45 per cent (374 active rigs), similar to current activity levels with 33,320 operating days. CAODC predicts the registered rig eet will begin 2013 with 830 rigs including 30 rigs added to the eet through 2012, but no further expansion is anticipated in 2013. “It’s more likely contractors will retire older equipment,â€? said CAODC president Mark Scholz.

The retirement of older equipment has been an ongoing trend over the last three years as the newer, more advanced equipment is better suited to explore unconventional plays. The activity level in 2013 is projected to be slightly below 2012 activity levels, but industry will remain focused on attracting back the skilled workers lost during the 2009 downturn and on investing in new employees. CAODC members continue to cite skilled labour shortages as a signiďŹ cant challenge. The drilling and service rig sectors’ manpower challenges are compounded by the

fact that the rigs are a recruiting ground for other oil and gas sectors. CAODC also released revisions to its fourth quarter projections for 2012. The revised numbers reect operator budgets tightening due to uncertain commodity prices. Average rig utilization for the ďŹ nal quarter of 2012 is expected to be 45 per cent (or 374 rigs). Operating days will be approximately 33,320. The level of activity in 2012 is stronger than 2010 (when industry attained 41 per cent utilization and 119,303 operating days) but not as strong as 2011 (52 per cent utilization and 145,118 operating days).

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BRIEFS “The risk of fracturing into Not too hot, or a drinking cold water zone is equivalent to the risk of dying from falling out of bed.â€? Bethany Kurz of the Energy and Environmental Research Centre in Grand Forks, North Dakota, gave the presentaĆ&#x;on on hydraulic fracturing, or “fracking,â€? to approximately 25 people in Weyburn on Nov. 7. Photo by Brian Zinchuk

– Bethany Kurz of the Energy and Environmental Research Centre, Grand Forks, N.D.

A close look at hydraulic fracturing „ By Brian Zinchuk Weyburn – The gallery area of Weyburn City Hall was full on Nov. 7 in response to a presentation on fracking put on by the Petroleum Technology Research Centre (PTRC). Bethany Kurz of the Energy and Environmental Research Centre in Grand Forks, North Dakota, gave the presentation on hydraulic fracturing, or “fracking,� to approximately 25 people. The information, presented to a full house, covered the history, nature, science and technology of “fracking� as it known in popular culture, and also addressed many of the public questions around this important hydrocarbon recovery method. Kurz began by explaining the formation of oil in reservoirs in a marine environment. The hydrocarbons (oil/gas) originally began as organic matter (plankton, plants, animal remains, etc.) that was buried and compressed by other layers of sediment. “Over time, they get buried, and it heats up,� she said. The oil and gas often migrate away from the organic-rich source rock and accumulate in underground “traps.� “At one time, when the Bakken formed, this was a huge ocean, a tropical ocean, which is hard to believe.� The Bakken has garnered the most attention recently, she noted, but there are many other oil and gas producing forma-

tions. Porosity is the amount of void space between the rocks, while permeability is how well uids move in those spaces. Sandstones tend to be high in permeability and porosity, and make up conventional oil and gas reservoirs. They were considered the “low hanging fruitâ€? by the industry. However, advances in drilling and fracturing makes unconventional plays more viable. The Middle Bakken is more of a tight sandstone, not a shale like the Upper and Lower units of the Bakken. It’s considered tight, meaning it has low permeability. Creating fractures creates passages in the rock, allowing the oil to ow, she explained. “Hydraulic fracturing is nothing new,â€? Kurz said. It was experimented with in Kansas in 1947. They originally used napalm (gelled gasoline) and sand from the Arkansas River. They were very successful. As far back as the 1900s, fracturing was accomplished with nitroglycerine, a highly unstable high explosive. “They would pour it down the well and ignite it. The safety record wasn’t so well. In the 1950s, surplus Second World War Allison aircraft engines were used to provide pumping horsepower. ɸ Page A8

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Saskatchewan’s active drilling rig count hovered around the 84 mark for much of the early part of November. That is roughly 20 fewer than the same time the year previous, but about 12 more than what was seen in 2010. The percentage is much lower than last year, as there are now substantially more rigs in Saskatchewan. For much of 2011, Saskatchewan had approximately 125 drilling rigs. That number has climbed to 142. The resulting active percentage is now 59 per cent. With the soft gas market, British Columbia’s rig count for the entire year has been running well below both its 2011 and 2010 numbers. On Nov. 9 it was about 15 o the pace of both previous years, sitting at 39. Alberta had 271 rigs working, accounting for 47 per cent of its eet of 580. That’s down by about 80 from the year before, and 40 from 2010. Manitoba saw a sharp decline over October and November, dropping to just 10 active rigs, o from 22 at the same time in 2011. Other than spring breakup or the traditional Christmas shutdown, that’s the lowest point it has been over the last three years. With 21 rigs in the province, it made for a 48 per cent active rate. Fleet-wide, 404 of 797 drilling rigs were active in Western Canada as of Nov. 9, making the utilization rate just over half at 51 per cent.

Briefs courtesy Nickle’s Daily Oil Bulletin

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PIPELINE NEWS December 2012

PIPELINE NEWS

EDITORIAL

Mission Statement: Pipeline News’ mission is to illuminate importance of Saskatchewan oil as an integral part of the province’s sense of community and to show the general public the strength and character of the industry’s people. Publisher: Brant Kersey - Estevan Ph: 1.306.634.2654 Fax: 1.306.634.3934 Editorial Contributions: SOUTHEAST Brian Zinchuk - Estevan 1.306.461.5599 SOUTHWEST Swift Current 1.306.461.5599 NORTHWEST Geoff Lee - Lloydminster 1.780.875.5865 Associate Advertising Consultants: SOUTHEAST • Estevan 1.306.634.2654 Cindy Beaulieu Candace Wheeler Kristen O’Handley Deanna Tarnes Teresa Hrywkiw CENTRAL Al Guthro 1.306.715.5078 al@prairieng.com SOUTHWEST • Swift Current 1.306.773.8260 Stacey Powell NORTHWEST • Lloydminster Randi Mast 1.780.808.3007 MANITOBA • Virden - Dianne Hanson 1.204.748.3931 • Estevan - Cindy Beaulieu 1.306.634.2654 CONTRIBUTORS • Estevan - Nadine Elson To submit a stories or ideas: Pipelines News is always looking for stories or ideas for stories from our readers. To contribute please contact your local contributing reporter. Subscribing to Pipeline News: Pipeline News is a free distribution newspaper, but is now available online at www.pipelinenews.ca Advertising in Pipeline News: Advertising in Pipeline News is a newer model created to make it as easy as possible for any business or individual. Pipeline News has a group of experienced staff working throughout Saskatchewan and parts of Manitoba, so please contact the sales representative for your area to assist you with your advertising needs. Special thanks to JuneWarren-Nickle’s Energy Group for their contributions and assistance with Pipeline News.

Published monthly by the Prairie Newspaper Group, a division of Glacier Ventures International Corporation, Central Office, Estevan, Saskatchewan. Advertising rates are available upon request and are subject to change without notice. Conditions of editorial and advertising content: Pipeline News attempts to be accurate, however, no guarantee is given or implied. Pipeline News reserves the right to revise or reject any or all editorial and advertising content as the newspapers’ principles see fit. Pipeline News will not be responsible for more than one incorrect insertion of an advertisement, and is not responsible for errors in advertisements except for the space occupied by such errors. Pipeline News will not be responsible for manuscripts, photographs, negatives and other material that may be submitted for possible publication. All of Pipeline News content is protected by Canadian Copyright laws. Reviews and similar mention of material in this newspaper is granted on the provision that Pipeline News receives credit. Otherwise, any reproduction without permission of the publisher is prohibited. Advertisers purchase space and circulation only. Rights to the advertisement produced by Pipeline News, including artwork, typography, and photos, etc., remain property of this newspaper. Advertisements or parts thereof may be not reproduced or assigned without the consent of the publisher. The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers.

We must get to tidewater for our exports There’s been more talk about exporting Canadian oil and gas in recent years than you can shake a stick at. One recent proposal is to build a liquefied natural gas (LNG) export terminal on the EAST Coast. That’s a big change from what we’ve heard recently, where everyone has been talking about the West Coast. This project would see the export facility built at Goldboro, Nova Scotia. That also happens to be where Sable Island natural gas makes landfall. As far as we’re able to determine, the TransCanada mainline system doesn’t go that far east. It terminates in Quebec. Shippers are troubled by the tolls on that system right now, because it’s vastly underutilized, yet bills have to be paid. Indeed, there’s now some very serious consideration to turn one of those pipelines into an oil pipeline, as has already been done with the initial Keystone pipeline. You don’t want to build an export facility on the St. Lawrence, however, because it is not ice-free. To hit open water, you have to go east, which would mean more new pipe. Don’t forget, that new pipe would have to be built in what is essentially a hostile environment to oil and gas, Quebec, where fracking has been frozen out for “study.” As such, an East Coast export facility may quite literally be a pipe dream. Back on the West Coast, we’ve got a newspaper baron suggesting one of the largest refineries in the

world should be built at Kitimat, so that we export refined products, not crude (and the jobs that refine said crude). B.C. Premier Christy Clark is doing her best impression of Danny Williams, making demands and expecting the rest of the world to grovel at her feet. She’s dead set against a pipeline carrying dilbit to Kitimat, but a natural gas pipeline to the same port is perfectly fine. Perhaps there’s a sense of desperation in the air from gas producers, as their industry isn’t just on the ropes, it’s lying on the canvas. Daily Oil Bulletin reported that just nine gas wells were drilled in Saskatchewan in the first nine months of the year. Nine. Single digit drilling. So we, the Canadian oil and gas industry, and the gas side in particular, absolutely must find export markets where we can get more that $3 per gigajoule. It’s doubtful LNG export facilities are going to outnumber fish canneries on the coasts, but we’re going to need some there to get this industry going again. Most analysts are saying Canada must get into the game right away, and secure long-term markets while they are still available. With Japan all but shutting down its nuclear power capacity after the Fukushima disaster, the market there is ripe for the picking. If we sit on our hands, we will lose this opportunity. Australia, for example, would be more than happy to sell them LNG. Fortune favours the bold, they say. But will Canada be bold, or will we let this opportunity pass us by, like an LNG tanker in the night?

PIPELINE NEWS December 2012

From the Top of The Pile

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OPINION

By Brian Zinchuk

Should we ship oil north, to Hudson Bay? It seems a month can’t go by without someone suggesting a new export route or market for Western Canadian Sedimentary Basin oil or gas. The most recent one, however, strikes close to home. When my stepfather, Brad Stroud, graduated high school back in the 1970s, his grad gift was a suitcase and a train ticket. He, like his father, would end up working as a deckhand on a Hudson Bay tugboat at the Port of Churchill. His father, Harvey, served on the tugboat Graham Bell in the 1950s. Harvey’s mother Nellie lived there from 1968 to 1992, and worked as a cleaner for the substantial U.S. Army base and later for the RCMP. Harvey was also an equipment operator for the U.S. Army. As a child, Brad spent about three years in Churchill, and was a classmate of the current mayor, Michael Spence. Brad’s perspective is rather unique. Not many people have plied those waters, or the ones leading to our northernmost port. He served two seasons on the tugboat MV Toulon. It was the main harbour tug, and there were two smaller ones at the time. They would handle roughly a dozen ships a season. Grain was the main shipment, especially barley and wheat. They also shipped nickel from Thompson. Diesel came into the port from the east. Liquid sulphur rail cars would come from Alberta, for shipment out. “Ships from Europe would come in and export it all over the world,” Brad said of the sulphur.

“It used to catch on fire. We would put it out with our water cannons,” he said. “The shipping season was so short. Ships would have to get in, get loaded, and maybe they would get two trips in a year.” The first season he worked, they were the last boat out of the bay. They went across Hudson Bay, Ungava Bay, down the Labrador coast to the shipyards at Marystown, Newfoundland. It took “not quite a week,” he said. The tugboat was left there over winter for maintenance and the following spring they sailed it back to Churchill. Along the way, they encountered sea ice. “The ice comes in packs. You have to follow along until you find a lead or hole. We had a pretty heavyduty tugboat. It wasn’t like an icebreaker, but it was a steel hull.” As for icebergs, he said, “We steered clear of them.” “The big problem was the insurance. The ships could still get in and out. But after a certain date, there was no insurance on any ships out there.” “Not only insurance, but there was no air/sea rescue. There was no one to come and get you.” “In Norway and Russia, they have an icebreaker and big ships go behind it. I don’t know what it will be like with global warming. Quite a bit of the ice is gone.” As for the Labrador coast, Canada’s iceberg alley,

he said, “They have to watch, like the Titanic. Ice is a critical thing.” One of the concerns regarding supertankers on the West Coast is response to a potential oil spill. In B.C., we can expect there’s at least some capacity to deal with this already. There’s a well-established Coast Guard presence and thousands of boats and ships. Taking a good look at the satellite photos of Churchill, the only major port on the entire Hudson Bay, (which is close in size to the Gulf of Mexico), one soon realizes there are next to no boats of any type, specialized or not, that can mount a response. I count six things that can float, and two are barges. You simply can’t put a skimmer or containment boom on a boat that doesn’t exist. It takes a long time to get from Newfoundland to Churchill. On the U.S. Gulf coast, there were plenty of resources to draw from to deal with the BP spill, and we all know how that went. Brad noted, “They brought in fuel during the wartime. This is oil going the other way. Would it be any different? “They could make it into a world class port. They would have to make a highway. If this was the Soviet Union, there would have been no question. It would have been a world-class terminal.” Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.

Lee Side of Lloyd By Geoff Lee

Is nature or industry polluting the oilsands? Are contaminants in the Athabasca Delta north of the oilsands in Alberta naturally occurring or the result of industry? That’s a question open to more debate and research, but two small studies released in October suggest the impact of the oil and gas industry in the Athabasca oilsands region is not as great as some critics and some environmental groups have contended. The pair of studies by University of Waterloo scientists didn’t discover any increase over time of toxic hydrocarbons or heavy metals in sediment samples collected from lakes and rivers on the Athabasca Delta north of the oilsands mines. Some of the blame goes to Mother Nature. The report notes that Athabasca River is essentially self-polluting through erosion of the same hydrocarbon (bitumen) deposits that are being mined. The studies however, were confined to just one basin and both authors recommend that sediment sampling be expanded to 40 basins to collect more data. One of the studies posted in the online journal PlosOne stated: “We observe no measurable evidence of related far-field airborne metal contamination in the Peace-Athabasca Delta located (about) 200 km to the north.”

The second research paper published in Science of the Total Environment also concluded there was no evidence of hydrocarbon deposits in lakes downstream of the mines. “Despite rapid growth of oilsands development during the past 25 years, the data reveal no measurable increase in concentration or proportion of rivertransported bitumen-associated indicator (hydrocarbons),” said the report. The good news studies fly in the face of high profile anti-development campaigns that paint all production from the Fort McMurray area as being “dirty oil.” The tarring of the oilsands by environmentalists led the Obama administration to block approval of the 830,000 barrel per day Keystone XL from Alberta to the Texas last fall. Environmental criticism of the oilsands as an area where so-called dirty oil is produced has also heated up opposition to the proposed Northern Gateway pipeline from Edmonton to Kitimat, British Columbia. The two latest Waterloo studies were funded by oilsands producer Suncor, but the scientists say that was due to other funding sources not being able. The authors also publicly stated Suncor did not have any say in the design or conclusions of the reports. The study was focused on what sediment core samples from riverbeds and lakes dating back more

than 200 years revealed. Scientists discovered that fluctuating levels of toxic heavy metals such as lead, arsenic and mercury over the years, didn’t appear to be the linked with oilsands development. “Enrichment of these metals peaked between 1950 and 1970 (at about 30 to 45 per cent above preindustrial values) and has been declining since,” said one of the reports. “Mercury enrichment began about two decades later (post-1940s), peaked between 1965 and 1990, and has since declined.” The scientists used a similar method in the second study to examine hydrocarbon deposits in several lakes downstream from the oilsands in the Athabasca delta. That study also couldn't find any increase of toxic heavy metals in those deposits since oilsands mining began. While the study area was too small for its conclusions to be extrapolated to the entire delta system, the findings are in stark contrast to other studies that link contaminants to industry activity. No doubt the findings of the two small studies will demand funding for wide large scale sediment sampling to be conducted to distinguish between natural and artificial sources of bitumen in the water. Only then can any reasonable conclusion can be made about the impact of mining versus the power of Mother Nature in the Athabasca Delta.

PIPELINE NEWS INVITES OPPOSING VIEW POINTS. EDITORIALS AND LETTERS TO THE EDITOR ARE WELCOME. Email to: brian.zinchuk@sasktel.net

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PIPELINE NEWS December 2012

Addressing misconceptions about fracking ɺ Page A5 Nature of a frac job A frac job will have several key ingredients. First, there’s going to be a series of tanks to hold water, a lot of it, generally speaking. Those water tanks will then be manifolded together to a mixing tank. It is pumped down into

a portion horizontal wellbore that has been isolated. This is a zone, of which there will be many. The water will enter the formation through holes in the casing – the example Kurz used was explosive perforation – and the pressure of the water will cause the rock formation to fracture.

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A blender will accept proppant, small granules to prop open the fractures created by the water pressure. These will range from sands to ceramics. “There are dierent mechanisms for hydraulic fracs,â€? Kurz said. “Over 2.5 million frac operations have

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been done globally, over one million in the U.S.â€? Thirty to 40 frac stages are most common in the Bakken, she said. More stages than that haven’t seen as much of an increase in production to warrant them. Issues There have been lots of issues in the media regarding hydraulic fracturing, and a lot of misconceptions. Kurz started with facking water. “You hear these numbers – three to ďŹ ve million gallons to fracture a well. That certainly sounds like a lot of water,â€? she said. Disposal of frac owback is another issue. “You have movies such as Gasland which are complete misrepresentations of what is actually happening,â€? she said. Pulling up the movie’s website, she pointed out a graphic that showed fractures extending well up towards the surface into potable water aquifers. “I would challenge somebody to create a fracture, given the depths we’re really at, to frac into a drinking water zone. At a 9,000 or 7,000 foot depth, you’re not going to be able to

create fractures all the way into your drinking water zone, which will be in some cases up to 2,000 feet, your deepest drinking water zone. “This is oil spilling out of a well. Industry doesn’t want that. It’s worth a lot of money,â€? she said, pointing to an animation of a gusher. “You don’t want to be fracturing into a zone that contains water, because that means you are going to produce more water, which is expensive to dispose of.â€? “If your targeted formation is 7,700 feet deep, that’s more than six Empire State Buildings stack. Typically your fractures will extend hundreds of feet, or 90 metres. They don’t typically extend very far.â€? A microseismic study done in the Marcellus shale formation showed that the fractures came nowhere near potable water aquifers. Regarding a supposed lack of regulation, states and provinces already have regulations in place, from drilling wells to disposal of wastes, she said. A typical frac job will require three to ďŹ ve million gallons of water, she noted, and have additives mixed in. “In the Bakken, typically in a three week period, you

may only recover 17 per cent of that water. You’re not getting a whole lot of it out of the ground.â€? The rock almost acts like a sponge and absorbs water, Kurz noted. Typically only 20 per cent of the chemicals will return. You will get some of the water owback, as well as formation water that may be as much as 20 per cent salt, far saltier than sea water. Four million gallons of water is about the amount used to irrigate one section of land for one day in western North Dakota, or one per cent of the water used for cooling for a 400 megawatt power plant. It’s about one-ďŹ fth of the average daily water use of the City of Regina. Typically water is transported by water hauling trucks. “Anything they can use to minimize truck traďŹƒc is beneďŹ cial,â€? she said. While water quality needed to be very high, now they are able to use higher salinity water, reducing costs to buy water as well as water transportation costs. What else? A typical shale fracturing mixture makeup will be 90 per cent water, 9.5 per cent sand, and 0.5 per cent chemical additives. ɸ Page A9

WITH THANKS From Our Entire Staff

AT CHRISTMAS As we wrap up yet another year, we’d like to acknowledge all the individuals - customers, neighbours, associates, and friends, who have made doing business here such a pleasure for us. 93 Panteluk Street, Kensington Avenue N, Estevan, Saskatchewan PHONE: 306-634-8828 • FAX: 306-634-7747 cordell.janssen@nov.com • www.nov.com

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PIPELINE NEWS December 2012

The gallery area of Weyburn City Hall was full during a presentaĆ&#x;on on fracking, put on by the Petroleum Technology Research Centre.

Éş Page A8 The most common proppant is sand, highly weathered sand from a beach. Missouri, Illinois and Wisconsin are sand sources. Typically three to ďŹ ve million pounds of sand are used per operation. Ceramics are the “Cadillacâ€? of proppants, and come from China, Brazil and Russia. Biocides are added to reduce the growth of hydrogen sulphide producing bacteria. Friction reducing agents, which create “slick waterâ€? are surfactants that promote uid ow. Polymers are used in some cases to create a more viscous solution to hold the proppants in suspension. Guar gum, used in the food industry, is used for this purpose. Scale inhibitors and acid treatments are also used. Hydrochloric acid is used to clean swimming pools, she noted.

Initially frac uids were not known by the public, but now websites like fracfocus.com and fracfocus.ca disclose what goes in. Regarding frac owback, places like Pennsylvania have very few disposal wells. “Like two,â€?

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A9

Kurz said. For awhile some was taken to municipal water treatment facilities, but that didn’t go over well. “They were not used to dealing with the same chemicals as waste water.â€? “More and more they’re looking at re-use and recycling.â€? Multiwell pads have substantially reduced surface disturbance and reduced transportation of drilling rigs. Some sites in the Horn River play of British Columbia might have 16 wells on a site. “The risk of fracturing into a drinking water zone is equivalent to the risk of dying from falling out of bed,â€? Kurz said. As for the relationship between facturing and earthquakes, yes, you will get microseismic events. “If we had a geophone here, it would be the equivalent of me jumping. It’s very low,â€? she said. “The largest recorded was 2000 times less energy than a magnitude 3 earthquake. In most cases it’s 10,000 to one million times less.â€? That being said, in instances of deep well injection of disposal uids along faults, the fault can be lubricated, causing movements.

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A10

PIPELINE NEWS December 2012

PIPELINE NEWS December 2012

W. BRETT WILSON

REDEFINING S T I L L M A K I N G M I S TA K E S

„ By W. Brett Wilson Special to Glacier Media I grew up in Saskatchewan, and like many people, I have a huge soft spot for my homeland. I have a tremendous amount of pride in my roots, and great respect for the people who pioneered this part of the world. In a relatively short time, those determined settlers – including my great-grandparents – helped turn the wild and rugged prairie into one of the greatest places to live on Earth. Part of what makes Western Canada so unique is the special breed of people who live here. There’s just

something about this place – this land – that has helped to shape a people that are solid to the core. My aection for the land is surpassed only by my aection for the people who live here, and what sets us apart is really what holds us together – a deep and enduring commitment to each other. Growing up in North Battleford, a small city just northwest of Saskatoon, I witnessed incredible displays of community spirit from a host of people, but most notably from my own parents. My father, Bill Wilson, is a classic Prairie gentleman. If a stranger

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RedeĂ€ning Success were stranded with a at tire, he was the guy who would pull over ďŹ rst to lend a hand. I once was with my dad when he backed up 1/4 mile on a very muddy road just to follow a neighbour lady driving in another direction because he was worried she might get stuck and need help. My mother was equally inspirational. As a social worker, she was always doing what she could to help out the community – from volunteering for causes related to her children to taking in foster kids to teaching parenting classes. For my mom, giving back was part of her DNA. This commitment to community is a wonderful part of my legacy, and probably yours. You may be reading this in Kamloops, Kipling, or Calgary, but my guess is that we share a similar belief: that the real measure of success is not just about hard work and big rewards. It’s also about giving back and taking care of the people around us. It’s about our sense of community. As a city, Calgary has been shaped by corporate and community leaders whose collective dreams

have taken it from a North West Mounted Police outpost to an international centre of excellence for energy. We owe many of our greatest assets – such as world-class sports teams and facilities, dynamic arts and culture, and state-of-the-art health care and education – to the individual visions and collective eorts of our community-minded citizens. One of my favourite examples of great combined eort comes from my hometown. When I started to become more focused on personal philanthropy a decade or so ago, I realized I hadn’t yet done anything substantive to give back to my birthplace – North Battleford – so I organized large (to me) donations to the both the local United Way and the Battlefords Union

Hospital. It didn’t take long to learn that my personal donation of $100,000 matched the United Way’s entire fundraising goal for that year. Until then, I also learned, the biggest single donation the United Way had ever received was $5,000. I was dumbfounded. I knew that people in the Battlefords had wealth, but obviously they had never been given a vision for building their city through creative philanthropy. I believed there was a fair amount of money sitting under some mattresses in that town. And it was time to shake of some of it loose. I asked the hospital CEO what else was on his wish list and the request for four new anesthesiology machines caught my eye. The hospital had four

operating rooms with four old units on site, but at least one unit was down for repairs at any given time. I told the hospital that I would give $300,000 toward the new machines, but they had to match my donation by raising $300,000 themselves. I didn’t realize then that the most the hospital had previously raised during one campaign was $100,000. The hospital accepted my plan, but wanted 12 months to raise the money. I thought for a few minutes and gave them three months. I can only imagine the nervous conversations that took place at BUH that day, but they called back the next morning and agreed to the three-month challenge. The “Dollar-for-Dollarâ€? campaign was on. ɸ Page A12

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A12

PIPELINE NEWS December 2012

The “Dollar-for-Dollarâ€? campaign was on Éş Page A11 It actually took less than three months for the city to meet – and exceed – their fundraising goal. They announced their victory on the local radio station at the end of a very touching multi-day radiothon, and called me with the results: “Brett, we have met your challenge – in fact we blew through it – and have raised $500,000!â€? I was so moved by the way the community had come

together to support the hospital that there was little I could do but match them – dollar for dollar – and up my donation to $500,000. The $1 million total tally was an incredible boost for the city, but the bigger impact came in terms of community engagement. To say the city and its citizens surprised themselves would be an understatement. But North Battleford is not unique. There are hundreds of similar communities with innovative organizations addressing an assortment

of similar issues and causes – and providing great opportunities for citizens to work with them to make our

communities better places to live and do business. ɸ Page A13

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PIPELINE NEWS December 2012 Éş Page A12 To me, the business value of philanthropy is obvious. Strong communities attract new businesses, and quality employees, which in turn create an even stronger business climate. Employees want to live in communities with a strong economic and social fabric – places where they feel connected to one another and enjoy a great quality of life. Without question, communities with a strong economic base and a strong social fabric are the best places to live and work. As business guru Don Tapscott has said, “Business cannot succeed in a world that is failing.â€? As one of the proud co-founders of Calgary’s FirstEnergy Capital Corp., I’ve seen the enormous impact one company can have on its community. It would be nearly impossible to measure the number of lives that have been dramatically improved by FirstEnergy’s philanthropic work. In addition to donating more than $10 million to more than 500 community agencies over the past almost 20 years, FirstEnergy has raised millions for the victims of the 1997 Manitoba ood, the Quebec ice storm in 1998, the Alberta drought in 2002, and the Slave Lake disaster in 2011. But the best corporate philanthropy doesn’t just make a social impact – it also adds to a company’s bottom line. FirstEnergy didn’t set out to be a leader in corporate philanthropy. We did set out to be a leader in investment banking. And we used charitable giving as a marketing tool. Every time we gave a contribution to a charity, we were very open about the fact that we expected something in return. What we gained in the form of public recognition, co-branding with larger companies, or recognition within the charity’s network helped us to dramatically increase our proďŹ le, develop new partnerships, and grow our client base. That is the kind of return on investment corporate philanthropy should expect to achieve. In my world, giving and getting deďŹ nitely go together, but philanthropic giving can be more rewarding than you might expect. I’m quite candid about the fact that when I ďŹ rst started my career 30 years ago, my goal was simple: I wanted to make money – and lots of it. I wanted success, the big house, and a few nice toys in the garage. What I soon learned was that ďŹ nancial success can become surprisingly hollow. Ironically, philanthropic pursuits produce a much more satisfying return. So after spending many years focused on making money, I now spend as much – if not more – of my energy giving it away. That’s why I am constantly challenging people to think carefully about how we measure success. Earlier this year, the ďŹ rst World Happiness Report was released. It attempted to measure social and economic well-being around the

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A13

world. Canada placed ďŹ fth. It came as a surprise to some people, but not to me, that a nation's happiness is not necessarily tied to its economy, but has more to do with things like personal freedom and strong social networks. Just like the people who settled our communities decades ago, we are wired to connect with and care for one another. If we stop measuring success based on material wealth, and start measuring it in terms of things we really value – like our relationships with family and friends, and the quality of our communities, then we all might start to feel richer than we thought possible. To me, the real bottom line is not about how much we get, but how much we are privileged to invest in others. That’s how I have redeďŹ ned success. Business, entrepreneur and philanthropist Brett Wilson is publishing a new book in November. Entitled RedeďŹ ning Success: Still Making Mistakes it will in bookstores this month. Brett Wilson authored this column in partnership with Glacier Media Group, which has extensive holdings in community media and business-tobusiness media across Canada. Pipeline News is a part of Glacier Media Group.

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A14

PIPELINE NEWS December 2012

Why lift it by hand when you can grab it with the tugger? „ By Brian Zinchuk Estevan – When smaller tubulars need to go down a well, the old way of doing it involved putting your back into it to get the pipe to the drill oor. The roughneck would typically bend over and lift it o the catwalk, ground or truck. In some cases, air-driven catwalks would at least lift it from waist level and up towards the elevators on the drilling oor, but it still required lifting. In other situations, a sling was used. “I felt the oilďŹ eld needed a safer tool to assist in picking up the smaller tubulars from the ground/catwalk, into the rig elevators and laying them back down,â€? said Dean Gilliss. He recently retired from Gilliss Power

Tongs, completing his management contract after selling the company to Wyoming Casing Service in 2008. His wife, Bonnie, was also active in the management of Gilliss Power Tongs, and is now working with him on the new venture. “The current methods were to either hand bomb or lift with a conventional sling. I explained the concept to my partner at the time and my idea soon became a working prototype. “At the time the tool had to be government-tested. We took the prototypes to PAMI in Humboldt, to have the testing done, and a compliance certiďŹ cate was obtained. Applications for both U.S. and Canadian patents were made. The U.S. patent was granted, and we are awaiting the

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Canadian patent.â€? The company was originally called R&D Technologies, and was founded in 2006. The partnership eventually fell apart, however, and it eventually became Gilliss Oil Tools in 2008. “Even though the tool was well received, there were a number of factors between 2006 and 2011 that hindered marketing and sales of the tool,â€? he said. The project hung dormant during that time largely because he focused on operating Gilliss Power Tongs until the handover was complete last year. Dean and Bonnie’s son, Dylan, now is general manager, and their other son, Logan, handles sales for Gilliss Power Tongs. “I’m happy we sold,â€? Bonnie said. “I am too,â€? added Dean. Their focus is now on sales of the new product, and those sales have picked up substantially. “We sold more this year than in the last ďŹ ve years,â€? Bonnie said. The tool itself is deceptively simple, but there’s a lot of thought involved. There are three main parts – the body, which has half of the clamp, the lifting eye which includes the second half of the clamp, and the release. When you pull the release (which originally had a hockey puck for a handle), the jaws open. When the jaws are placed over a pipe, the lower part of the lifting eye piece engages the pipe. It does this by having a cam feature which causes the mouth of the jaws to close and then lock into place.

Since the lifting eye is o centre, any time the lifting eye has tension on it, the jaws will remain closed. Even if you open the release, the jaws will not open unless there is slack on the lifting eye. That’s an important safety feature. To let go of the pipe, the release must be pulled and tension slacked o the line. The clamps come in four sizes – 2-3/8, 2-7/8, 3-1/2 and 4-1/2 inch. The wrong sized clamp will not work. Either it will be too loose and slide, or it will not ďŹ t. The two popular sizes are 2-7/8 inch in Alberta and 3-1/2 inch in Saskatchewan. Gilliss Power Tongs runs a lot of 4-1/2 inch tubing and has a unit on each truck. “It’s a mechanical clamp. A guy in Edmonton started calling it a ‘bulldog clamp.’â€? Dean said. “That’s what people call it now.â€? The design has evolved over time. Initially the lifting eye had a rounded end. Two ears were added to ensure that the tugger’s hook stays straight and cannot set o the release mechanism. This is a safety feature. (The tugger is lighter-duty hoist on a rig.) A handle was added on the opposite side. Some users attach a tag line to the handle to make it easier to retrieve. Finally, the manufacturing process has been revised. While the thick, hard steel is cut by water jet, the inside of the clamp is now machined on a lathe, allowing for tighter tolerances. ɸ Page A15

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A15

A roughneck uses a “bulldog clampâ€? in the ÄŽeld on Sun Country Rig 8 in October. The clamp allows rig hands to use the tugger to liĹŒ up pipe, as opposed to “hand bombingâ€? it.

Éş Page A14 They were initially made in North Battleford, but Dean felt that was too far away to keep an eye on production. The second manufacturer was in Regina, but they went bust. Now manufacturing is done in Estevan, at the recently renamed Axis Services. The usage is primarily on service rigs since the advent of the “skateâ€? on drilling rigs. The skate is the mechanical device on a hydraulic catwalk that pushes a pipe up to the drilling oor. “We’re more geared to the service rig side,â€? he said. With most of its steel components roughly an inch thick, it’s not likely this clamp will wear out any time

soon. Rig Locator lists only 1,010 service rigs in all of Canada, for instance. “It’s kind of a niche market,â€? Dean said, picking up a pen. “This BIC pen, you build four billion of them, then four billion again,â€? Dean cited as an example of goods that are constantly replaced. Durable goods, however, will last. As a result, continued sales will mean seeking markets further aďŹ eld. The ďŹ rst market is straight south. “We have a company, a distributor, handling the northern states,â€? he said. They are now looking for a distributor for the Midwest and southern states. Dean is looking for more exclusive arrangements, so that those

who do carry the clamp, it have more interest to promote it than having it as a commodity all over the place. In the early days of this venture, they talked to a large, international outďŹ t, but were brushed o. “They were selling things that cost millions,â€? he said. Another large ďŹ rm backed o back then, too. But that’s not stopping them. This winter the Gillisses will be taking the tool on a road show down south during their snowbird months. Houston is targeted for demonstrations, although actual sales are expected to be handled by someone else. “I’m going to be showing how the tool works, in the ďŹ eld and

training facilities,� he said. Making personal connections is a key business strategy, as Dean noted he would go to Calgary about four times a year while

running Gilliss Power Tongs. Going for supper, talking face-to-face; these sorts of contacts are invaluable, he feels. “It always paid o. We’ll see what happens in the States.â€? “Baby steps,â€? Bonnie said. “Anywhere there’s an oilďŹ eld, there’s a potential market,â€? Dean said. Part of the challenge will be overcoming old school thinking, which Dean readily acknowledges is out there. “That’s how we did it for 40 years,â€? he said is an attitude they have to overcome. “We hand bombed it all our lives, they can too.â€?

They saw similar reluctance with the introduction of air slips with Gilliss Power Tongs. “It’s called progress,â€? Dean said. “It’s a back thing,â€? Bonnie added. While it weighs around 25 pounds, in use much of that weight is taken up by the tugger cable. “You’re guiding it, but the weight is on the tugger,â€? he said. “It’s not about the money. It’s about the logo – Gilliss Oil Tools – on the bottom. I’ve been in the oilďŹ eld for 34 years this spring. It’s about giving back. The people who use it really appreciate it,â€? Dean said.

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PIPELINE NEWS December 2012

PIPELINE NEWS December 2012

PIPELINE NEWS

A17

Saskatchewan’s Petroleum Monthly

Thank You To All Our Loyal Advertisers For Your Support

1st Choice Auto Detailing/Crackmasters 24-7 Enterprises Ltd. 3D Maintenance 3twenty Solutions Inc. 4S Services OilÄeld Consulting Ltd. 5th Street Autobody A & A Jewellery A & K Architects-A Joint Venture Above and Beyond Bookkeeping Absolute Locating Ltd. AC Power Contractors Acklands Grainger Action Towing & Recovery Service Acutec Systems Ltd. Ad Advertising Advance Design & Construction Ltd. Advance Notice Advertising Advantage Auto & Trailer Sales Advantage Products Inc. AEM Ltd. Aero Advertising Aggreko Canada Inc. AGI Envirotank Alberta Hot Line Inc. Alberta Line Find Alida Farm & Auto All Season Rentals & Sales All Test International Inc. Altus Geomatics AM Inspection Ltd. Ameel Duane Andrew Agencies Ltd. Annugas Compression Consulting Ltd. Apex Advanced Solutions Inc. Apex Distribution Inc. Applied Industrial Technologies ARC Resources Ltd. Aries Excavating Inc. Arnett & Burgess Pipeliners ARW Fencing Ltd. Aspen Custom Trailers Astro Boilers Auto Fuel Stick Automated Tank Manufacturing Inc. Avison Young Commercial Real Estate Axon Software Badger Daylighting Corp Balon Corporation Bandit OilÄeld Hauling Bar Engineering Co. Ltd. Bear Slashing Inc. Bell Medical Aesthetics Bert Baxter Transport Best Canadian Motor Inns (BCMINNS) Big Country Energy Services Big D’s Lease Service Bob’s Electric Contracting Ltd. Bobcat of Regina Border City Dental Centre Border Insulators

Borderline Fencing Services Borealis Global Bow Wood Cabinet Systems Boyd Excavating Ltd. Brady OilÄeld Services Lp Bravo Tango Advertising Firm Inc. Brent Gedak Welding Ltd. Brian Zinchuk Publishing Brightling Equipment Ltd. Bristow Projects Saskatchewan Ltd. Brock Manufacturing Brock White Canada Company Brother’s Coating Brutus Truck Bodies (Nor-Mar Industries Ltd.) BryTan Trucking Ltd. BVD Transport Ltd. C & N OilÄeld Maintenance C’s OilÄeld Consulting & Construction Caltech Surveys Ltd. Cameron Equipment Rentals Ltd. Canada PD Development Ltd. Canadian Access Mat Corporation Canadian Advanced Esp Inc. Canadian Western Bank Canadian Wilderness Inn Canalta Hotels Can-American Enterprises Inc. Candlewood Homes CanElson Drilling Inc. Canstay Motel Canwest Rail Service Canyon Technical Services Ltd. Carlyle Lube Centre Carlyle RV & Leisure Carnduff Carriage Works Inc. Carnduff Electric Ltd. Carson Energy Services Ltd (Lampman) Cathedral Insurance Cat-Tek Cathodic Services Ltd. CE Franklin Ltd. (Estevan) CEDA Reactor Chandel Equipment Rentals Choice OfÄce Products Cindy Beaulieu Circle D Transport Circor Energy City of Lloydminster CJ-CSM Inspection Clariant Oil Services Classic Jewelers Ltd. Classic OilÄeld Service Ltd. Classic Vacuum Truck Ltd. Cliff Nankivell Trucking Colliers International Come On Inn & Suites Ltd. Competition Environmental Ltd. Conquest Equipment Control Technology Inc. Corner Cast Construction Courage OilÄeld Services Ltd. Crescent Point Energy Corp. Crosscut Cattle Company Ltd. Crown Advertising CSA Construction CSI Canada Safety Cummins Western Canada Curly’s Picker Services Ltd.

Custom Truck Sales CWC Well Services Corp. D & D OilÄeld Rentals D2 Drilling Inc. Dart Services Dash Tools Davco Welding Ltd. Davidson Truck & Tractor Day Construction Dayman Trucking Ltd. Days Inn Dekker OilÄeld Services Del’s Commercial Printing Ltd. Demby Trailer Ltd. Denmax Energy Services Do All Industries Ltd. Dolly Sue’s Salon Day -Spa & Boutique Doreen Eagles Constituency OfÄce Doull Site Assessments Ltd. DPS Microbial Solutions Dreco Energy Services Ltd. (Nisku) DSI Contracting DSI Thru-Tubing Inc. Dubra Transport Service Dustin Duncan MLA Dwight Blomander Dynamic Resources Ltd. E. Bourassa & Sons Eagle OilÄeld Services Ltd. Eclipse Rentals Inc. Eco Green Energy Transfer Ed Jablonski Ed Komarnicki Eggum Seed Sales Element Technical Services Elotech Holdings Ltd. Emission Solutions Inc. Enbridge Pipelines (SASK) Endeavor Machining Solutions Energy Auctions Inc. Ener-Test Well Servicing & Rentals Ltd. Enform Enright Real Estate Management Ensign Big Sky Drilling Ltd. Ensign Energy Services Envirotec Services Incorporated Equal Transposrt Essential Coil & Stimulation Services Estevan Hospitality Endeavors LP Estevan Mercury Estevan Meter Services Ltd. Estevan Plastic Products Estevan Public Storage Estevan Real Estate Professionals Estevan Telephone Answering Service EverGreen Enviro - Carlyle Exhaust Masters Lloydminster Extreme Excavating F & L Concrete Services Ltd. Farm Genesis Group Farm Kitchen Inc. Fast Toys For Boys Fast Trucking Service Featherlite Trailers Fencing Around Fiberspar Corporation First Truck Centre Lloydminster Inc. Flaman Group of Companies Flare Distributors Ltd. Flexpipe Systems Flyin E Safety Services Ltd. Fort Garry Industries Fouillard Steel Supplies Four Seasons Sales

Foxtail Hauling Fred Gertz FreeholdLease.com Frontier Inspection Ltd. Frontier Peterbilt G Force Diesel Service G.T. & H. Holdings Inc. G.W. Trenching & Hauling Garrison Oilwell Servicing GE Oil & Gas ESP (Canada), Ltd. General Irrigation Inc. Gescan : Div. of Sonepar Canada Gibson Auto Electronics Gibson Energy ULC Gibson Welding Gilliss Power Tongs Girard Bulk Service Glacier Hydraulics Ltd. Glen Peterson Construction Global Steel Ltd. Godson’s Mechanical Good Spirit Air Service Goodon Industries Ltd. Goudy Transport Grand & Toy Great Plains Ford Greg Cousins Construction Gregg Fotheringham Grey Owl Engineering Grimes Sales & Service Co. Ltd. Grimes Well Servicing Grit Industries G-Stegen OilÄeld Services Guardian OilÄeld Services Guest Controls (2001) Ltd. Hank’s Maintenance Hard Knocks Fighting Championship Hard Shak Structures Harley Davidson (Yorkton) Haulin Acid Heavy Crude Hauling Henry Luhr Hess Fishing & Rentals Highline Rentals Hodgins Auctioneers Home Hardware Building Centre Horizon Ten Developments Inc. HSE Integrated Ltd. Hurricane Industries Hutt’s Trucking Ltd. Import Tools Independent Well Servicing Ltd. Industrial Communication Systems Industrial Electric Insurance Corp. of BC Integrated Geomatics Group Integrity Maintenance Ltd. Integrity Post Structures International Labour Centre& Immigration International Pinpoint Company IPAC-C02 Research Inc. Irwin’s Machining & Welding Jamie Dyer Jan McClelland Jay’s Welding Ltd. Jaywest Country Homes Ltd. Jerry Mainil Ltd. JK Containments Jobiel Enterprises Ltd. Johnson Brothers Equipment Rentals Johnson Plumbing & Heating JuneWarren-Nickle’s Energy Group K & L Equipment And Auto K5 Water Supply Ltd.

Kash Downhole Anchors Kelro Pump & Mechanical Kendall’s Auto Electric Co. Kenilworth Combustion Kenworth Lloydminster Kobold Services Inc. Koenders Mfg ( 1997 ) Ltd. Korpan Tractor Kramer Ltd. KRJ Custom Fabricating Kudu Industries Inc. L & C Trucking LP L.D. Allan Enterprises LAB Rentals Ltd. Lakeland College Lamarre Equipment Inc. Land Solutions Inc. Larry Davison Laura Wood Leanne Fleck Lease X Services Ltd. Leclair Transport Ltd. Level Best Technologies Ltd. Linda Regular: Century 21 Living Hope Community Church Lloydminster Construction Association Lloydminster Economic Development Corp. Lloydminster Paint & Supplies Logan International Inc. LoneStar Long Creek Railroad Inc. Longshot Services Lorna Pylychaty: RE/MAX Lynco Construction Ltd. M.E.T. OilÄeld Construction Ltd. Mack Auction Company Magna Fab Inc. Map Tech Inc. Marmit Plastics Inc. Marsollier Petroleum Ltd. Matrix Well Servicing Matt’s Car Wash Ltd. Maurer Construction & Maintenance Maverick Construction Maverick OilÄeld Services Max Refractory Services & Rentals Maxx Energy Products & Services Corp. Mayer Machine & Welding Ltd. Mazergroup McGillicky OilÄeld Partnership McNeil Plumbing & Gas Fitting MEDIACTIVE Inc. Melita Chamber of Commerce Metaltek Machining Metra Equipment Inc. Meyers Norris Penny MI SWACO Middle Son Mechanical Midwest Surveys Land Surveying Ltd. Mil-lar Trucking Millenium Geomatics Ltd. Millennium Directional Service Ltd. Millennium OilÅow Systems & Technology Millennium Stimulation Services Millerdale Tool & Machine Minard’s Leisure World Minard’s Steadfast Homes Mission Hot Shot Services MNP Moose Mountain Mud MSB Fabtech Muck Boot Company Murray Zwarich Nalco

National Trailer Parts Nelson Motors & Equipment Neptune Pump Services New Drill Generators Newalta Corporation Nistor’s Bulk Service NJ Cleaning Service Noralta Technologies Inc. Norbert Manufacturing Ltd. Norcan Fluid Power Ltd. Nore’s Auto & Trailer Sales Norse Star Ventures Inc. North Dakota Petroleum Council North East Bio-Grind Ltd. North West Regional College Northern Factory Surplus (1999) Ltd. Northern Lights Welding Northwell Rentals OK Tires & Auto Service Olympic Builders Supply OSY Rentals Painted Pony Patriot Advertising Inc. Peddler Consignments Penn West Exploration Penta Completions Supply & Services Ltd. Percy H. Davis Custom Brokers Performance Welding Ltd. PetroBakken (Calgary) PetroBakken Energy Ltd. Phoenix Advertising Group Inc. Pinetree Wholesale Pinnacle Builders Pioneer Homes Plains Environmental Inc. Platinum Performance Platinum Pumpjack Services Corporation Pongo Holdings Ltd. Positive Pressure Energy Services Ltd. Power Tech Industries Prairie Houseboats Prairie Mud Service Prairie Petro Chem Prairie Rat Hole Service Ltd. Prairie Western Recl & Const Precision Drilling Trust Precision Well Servicing Premium ArtiÄcial Lift System Ltd. Probity Capital Advisors Inc. Prodahl Environmental Services Ltd. Progress Properties Pro-Lift Crane Service Ltd. Promus Lumber Inc. PS Electric Ltd. PTI Group Inc. Pump Well Solutions Pure Chem Services Pure Energy Services Ltd. Purr-fect Dry Cleaners PWM Steel Services Ltd. QMax Solutions Inc. Quality Wireline Service Quantum Downhole Systems Quest Logistics Quorex Construction R & R Tank & Equipment Rentals R. French Transport Ltd. Race The Base Racken Enterprises Ramada Rapid Heating Services Ltd. Rapid Rod Service Raven Production Testing Ltd. RDT Rentals (2011) Ltd.

Ready Oxygen Ltd. Rearden Well Servicing Red Dog Drilling Inc. Red River Lumber Redhead Equipment Ltd. Redneck Chain & Rigging Company Redvers Generators Ltd. Redvers Oil Show Regens Disposal Ltd. Rema Tip Top Agency Ltd. Renegade Petroleum Ltd. Revamp Industries Richard Garton Consulting Richard Reeves Ritchie Bros Auctioneers (Estevan) RL Electric Roger Huel Ron Fonstad Ron’s The Work Wear Store Running Bear Rentals Ltd. Russel Metals Inc. Sabre Machining Safe-Tee Management Safety Buzz Saint John Ambulance Salmer’s Contracting Sam’s Trucking Estevan Ltd. Sanjel Corporation Saskarc Industries Saskatoon Custom Garage Interiors Inc. Savanna Well Servicing Schlumberger Canada Limited Scotch Rock Marketing Scott Land & Lease Senchuk Ford Lincoln Sales Ltd. Shaw Earth Moving Inc. Sholter Horsman Signal Direct Communications Sir Charles Estates Site Energy Skana Forest Products Ltd. Sky’s The Limit Boarding House Skylift Services Inc. Skyline Refrigeration (2010) Ltd. SMS Equipment Sonic OilÄeld Services Souris Valley Paving Ltd. South Country Equipment Ltd. South East Electric Ltd. South East Environmental & Safety Seminar South East Eye Care Southeast Options Consulting Southeast Regional College Southeast Rentals Ltd. Southern Document Solutions Inc. Southern Plains Co-operative Ltd. Sparkle Car Wash Spartan Trucking Inc. SPE International-Weatherford Spearing Service LP - Oxbow Spectra Financial Spruceland Millworks Inc. STARS Lottery 2012 Steel-Craft Door Sales & Service Steinhubl’s Masonry Ltd. Storle Production Testing Ltd. Streetscapes Co. Strongco Equipment Sun Country Well Servicing Inc. Sun Valley Land Ltd. Sunlife Sunrise Aviation Co. Inc. Superior Forklift

Superior Propane Suretuf Containments Ltd. Svein Bryeide Construction Swayze Concrete Ltd. Synergy Credit Union Synergy Human Resources T & T OilÄeld Services Ltd. T. Bird Oil Ltd. T.K. Trailer Sales Tank West Corporation Tanner Trucking & Bit Servicing Target Logistics Target Safety Services Tarpon Energy Services Ltd. TCA Telus Mobility Temple Gardens Mineral Spa Resort The Blair Group The Cash Store Financial The Container Guy The Metular Group The Quest Group Three Star Trucking Ltd. Thru Tubing Solutions Thunder City Power & Leisure Ltd. Tierdon Glass Ltd. Timberwolf Mechanical Titan Logix Corp TNT Tank & Trailer Sales Total OilÄeld Rentals Town of Carnduff Town of Kipling Trade West Equipment Ltd. Tremcar West Inc. Trent’s Tire Trican Well Service Trimount Development Ltd. Triple J Pipelines Trophy & Engraving Shop True Media True Torq Power Tongs & Downhole Rentals Tryton Tools TS & M Supply TSL Industries TUFF Exteriors Tundra Oil & Gas Partnership Turnbull’s Excavating Ltd. Two Creeks/Got Matts United Centrifuge Ltd. URS Flint Venture Communications Vertical Building Solutions (MPI) Viking Surplus OilÄeld Equip. Village of Torquay Virden Community Chamber Of Commerce Virden Recreation & Water Sports Vortex Drilling Weatherford / IPC Western Star Inn & Suites Western Star Trucks North Ltd. Western Underground Consulting Ltd. Westlund (a division of Emco Corporation) Westrans Co. Weyburn Oil Show Board Weyburn Review WGG Construction Wilhelm Masonry Inc. Wilson Consulting Wil-Tech Industries Ltd. Wood Country Wyatt Trucking Corp. XS-IV Holding Inc. Your Link Inc.

Have A Safe And Happy Holiday Season. We Look Forward To Working With You In 2013.

A18

PIPELINE NEWS December 2012

Boyd address sovereign wealth fund, gas drilling, and future developments „ By Brian Zinchuk Estevan – On Oct. 26, Minister of the Economy Bill Boyd spoke to the Estevan Chamber of Commerce about the direction the province is going in. After his speech, Pipeline News was able speak to the minister about the sorry state of

gas development, shipping crude-by-rail, and land sales among other things. Earlier this fall, the province announced its intentions to establish a sovereign wealth fund, similar to Alberta’s Heritage Fund. Boyd said, “It’s in the works now for establishment. It will be

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up and running relatively soon. First we want to pay down the debt in Saskatchewan before putting money into that fund. Mr. (Peter) McKinnon will be looking at dierent priorities in terms of establishing the fund. We’ll looking at dierent ways of creating money to go into that fund, mainly from the resource sector, I expect. And he’ll be looking at the types of investments we will put the resources into in the future.� The goal, he said, is for the province to be debt-free before putting money into the fund. While the speech from the throne spoke

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of dedicating $400 million a year to pay down debt, Boyd elaborated, “That’s the minimum. If we see the kind of growth in the economy we’re expecting, and if we see, particularly in the area of potash, the growth that we’re expecting, I think you’ll see signiďŹ cantly more paydown going forward.â€? The Daily Oil Bulletin reported in late October that in the ďŹ rst three quarters of the year Saskatchewan, had only drilled nine gas wells. “It’s certainly a concern to us,â€? Boyd said. “We put forward a gas well royalty reduction program a couple of years ago. We haven’t seen the kinds of stimulation of industry we would like. We’re at very, very low prices for natural gas, and as a result of that, the industry has moved their priorities from gas to oil, which is no surprise. At some point in the future, I think we’ll see gas prices bump up, and it will restart the industry in Saskatchewan. The gas sector is a bit of a disappointment in terms of the activity we’re seeing, no question. “Gas was not a huge part of our royalty regime in the past. Oil

Bill Boyd

was much more signiďŹ cant in terms of generating royalties for the province. We’ve seen a little bit of a reduction, but there’s really not much that can be done. This is a proďŹ t-driven business. If companies aren’t making proďŹ t, they’re going to move their capital into other areas, and they are. Asked if there’s anything else the province can do to stimulate gas production, he said, “I don’t think there are anymore steps being contemplated at this time. You can only reduce rates so much, that you might as well be giving it away. We’re not prepared to do that.â€? Nordic Oil and Gas reported ďŹ rst production of oil from a well near Preeceville in October. It’s the ďŹ rst oil producing well in east central Saskatchewan. Asked what this means, he said, “We’re excited about the possibilities of expanding oil production in Saskatchewan.

Clearly there’s exploration going on in a number of areas around the province, and it’s quite exciting. There may be additional pools of oil across the province that haven’t been explored at any great length in the past. We’re doing everything we can to encourage that type of activity now, and in the future. Obviously it’s a good news story when we see another area that may have signiďŹ cant oil production now, and in the future. “The only way you’re going to ďŹ nd it is with drilling activity. The use of new technologies has certainly helped. We would want to wish the companies involved in that area the very best in luck and fortune in the future.â€? He noted time to time there are permits given for outlying areas that don’t result in a lot of production, but there’s always the possibility that they could. ɸ Page A19

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PIPELINE NEWS December 2012

A19

AcĆ&#x;vity is picking up for crude-by-rail operators. These cars were seen at Bromhead, just east of Long Creek Railroads Southall facility on Nov. 7. Photo by Brian Zinchuk

Éş Page A18 Land sales are down substantially this year compared to previous years. Asked about the resulting impact on provincial revenues, Boyd said, “It’s had an impact. Land sales are a fairly signiďŹ cant generator of activity for our province. It’s clearly a benchmark of activity going forward. We’re a little bit backed up, still, because of ooding problems in the southeast part of Saskatchewan. We’ve also seen oil prices have come o a fair bit in the last little while. That creates a pullback in the industry, naturally. We expect that will pick up in the future. “I think a lot of oil companies have a signiďŹ cant backlog of wells they want to drill, in properties they already have, and they’re simply not investing in those land sales at the moment. “We’ll continue to see strong drilling activity, but we’ve got to see land sales pick up in the future if we’re going to continue to see that level of development. A lot of companies, though, have huge inďŹ ll drilling opportunities to explore and to develop, and we’re seeing a lot of that activity right now. We’re still seeing production improving. We’re still seeing growth in the industry. We’re not alarmed at this trend, but it’s something we have to keep an eye on.â€? On the topic of the growing shift to shipping crude-by-rail, Boyd said, “We’re seeing a tremendous increase in opportunities to move crude-by-rail all across Saskatchewan, not just in the southeast, but in many locations. It’s created another opportunity for moving Saskatchewan oil to export positions, into the United States primarily. There may be the possibility of moving signiďŹ cant volumes to the West Coast and other destinations in the future. We have a resource here that is very signiďŹ cant, and we believe there is growing opportunities for the sale of that resource into markets around the world into the future. There’s opportunities for those markets to be explored, to move that product into international markets. It would greatly enhance the viability of oil operations in Saskatchewan and increase revenue streams to the province in the future. “Clearly we’re onside in terms of seeing those kinds of pipelining opportunities or other transportation methods for moving product into positions of sale.â€?

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A20

PIPELINE NEWS December 2012

IPAC- CO2 has CO2 standard accepted „ By Brian Zinchuk Regina – A madein-Saskatchewan standard regarding storing carbon dioxide underground has been accepted by the Canadian Standards Association and the government of the United States. CSA Group, a leading developer of standards, codes and training programs, and

the International Performance Assessment Centre for Geologic Storage of Carbon Dioxide (IPAC-CO2), an environmental non-government organization (ENGO), announced Nov. 15 the world’s ďŹ rst bi-national carbon capture and storage (CCS) standard for the geologic storage of carbon dioxide (CO2) for

Canada and the United States. After three years of working on the world’s ďŹ rst standard for the geologic storage of carbon dioxide, IPACCO2’s work on the standard is now realized. Developed by IPAC-CO2 in collaboration with CSA Group (formerly CSA Standards), a leading devel-

oper of standards, codes and personnel certiďŹ cation programs, the new standard will provide essential guidelines for government regulators, project developers, and researchers involved with CCS around the globe. The standard will focus on areas such as: requirements for site selection and characterization, monitoring, measurement and veriďŹ cation, injection operation, modeling and risk assessment, cessation of injection and site closure. The CSA Z741

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is a bi-national Canada-U.S.A. consensus standard, developed with a technical committee of more than 30 professionals representing industry, regulators, researchers and NGOs from both sides of the border. The genesis of the standard was a seed document developed by IPAC-CO2 based on their research. It

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is intended that the new standard will also be used as a basis for the international CCS standards through the International Organization for Standardization (ISO). “It’s been a long time birthing this baby,â€? Dr. Carmen Dybwad, CEO of IPAC- CO2, told Pipeline News. “It’s ďŹ nally out the door. The next step is ISO.â€? That will be a much more complete standard, encompassing capture, transport and storage. The recently accepted CSA standard just covers storage. “We started with the easiest and most important,â€? she said. Transportation is already largely covered by National Energy Board standards. “There’s lots of pipeline regulations,â€? she said. On the capture end, she noted, “There’s so many dierent types of capture technology. They’re still experimenting.â€? Storage, she said, “is the jewel.â€? “The real nuts and bolts rests with capture. China is probably going to be the leader in this,â€? Dybwad said, noting a recent billion dollar Chinese purchase into a

plant in Texas. “They (the Chinese) want the intellectual property.â€? The ISO process is expected to take three to four years, at minimum. There are 13 or 14 countries that are active participants, which means a lot of negotiating. The CO2 storage standard, at a practical level, is used in characterizing reservoirs, doing risk management and site certiďŹ cation. To that end, IPACCO2 has signed a memorandum of understanding and non-disclosure agreement with the Petroleum Technology Research Centre, which has recently completed its injection and observation wells for the Aquistore project. Aquistore will take CO2 from the Boundary Dam carbon capture project and inject it into a deep saline aquifer. “We will do an independent assessment of the initial risk assessment,â€? Dybwad said, adding third party assessments provide conďŹ dence for regulators and the public alike. “It ensures you considered all the aspects, i.e. reviewing potential for microseismic.â€?

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As another year comes to a close, we want to let you know how very much we enjoyed serving you, and wish you all a very joyous and wonderful holiday season.

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A21

A22

PIPELINE NEWS December 2012

A shift from repairs to manufacturing

Lionel Wanner and his wife Donna have owned and operated Goodwater Machine Shop since 1986. Beside him is some stackable, free-standing Tex fence.

MERRY CHRISTMAS from our entire team

With best wishes for a Merry Christmas and a Happy New Year to one and all.

Celebrating Over 35 Years Calgary Provost

Redcliff Shaunavon

Saskatoon Regina

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Estevan • 634-6494 Oxbow Moosomin

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Goodwater – There was a time when the long-established Goodwater Machine Shop focused on repairs. Now, much of their work is in manufacturing. Goodwater Machine Shop is owned by Lionel and Donna Wanner, who purchased the operation in 1986. “I couldn’t even spell machinist until I bought it,” Lionel said. “My uncle, Phil Wanner, bought it in 1967. He sold it in 1979. We bought it from Frank Bird in 1986.” The Wanners’ son, Kevin, is now a pressure welder with the firm. When the Wanners purchased it, the company handled machining, general repairs and fabrication. Over the years they have expanded that. “We do lease mowing and maintenance, i.e. jack repairs, snow removal – blowing and dozing,” Lionel said. “I also do consulting for lease construction.” Gibson’s (formerly Palko Energy) disposal sites at Oungre, Stoughton and Midale saw Goodwater Machine Shop do piping and catwalk work. “We had two crews with welders. We did the pressure welding,” he said. As for welding work, Lionel said, “We used to sub it. Once Kevin got his welding tickets, we started doing it on our own. We have another welder now, Tyler Gammack.” The company also manufacturers several products. “We build livestock handling equipment and build corral systems. We do prefab and on-site.” The Wolseley Natural Valley slaughterhouse was one of their projects, as was the Neilson Bros. operation in Moose Jaw. As for oilpatch products, Tex fence is one line, while Texas gates are another. Used tubing from oilwells is one of their primary working materials. “We use used tubing – 2-7/8 and 2-3/8 of an inch.” Casing pipe is used for Texas gates. They try to source much of their new materials locally, if possible. New products are now the majority of their work, with just 20 to 30 per cent of the business in repairs. “We’re basically a job shop. If you want something made, we’ll do it.” ɸ Page A23

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PIPELINE NEWS December 2012

A23

Used casing pipe makes for good Texas gates.

Ed Lennox welds free-standing, stackable Tex fence at the Goodwater Machine Shop. Photo by Brian Zinchuk

Éş Page A22 Ten people work for Goodwater Machine Shop. However, its location, in a small hamlet a half hour’s drive from Weyburn, has its challenges. Lionel said wistfully that he there was once a cafe next door with accommodations above it, but he had it knocked down many years ago. Those accommodations would have been useful now. “In the bright lights of Goodwater, it’s really tough to keep machinists,â€? he said, adding, “we use a lot of subcon-

tractors.â€? “We have guys driving from Ogema, Weyburn, Radville and Torquay.â€? They try to be nine to ďŹ ve, he said, but acknowledged, “We’re not. We oer service on weekends.â€? Snow removal in particular happens when it snows. Last year there was only a few hours work. “There was just no snow. The year before, it was insane,â€? he said. Their other son, Terrance, is a machinist, but he has since moved on to become a land

agent. Both of the sons worked service rigs, and Kevin also spent some time on drilling rigs. Their daughter, Michelle, worked at the company in her younger days during summer holidays. As for the future, Lionel said, “We plan on building cement tanks, that and containment walls.� They are also considering a new shop.

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A24

PIPELINE NEWS December 2012

Quality is priority for Delisle company By Josh Schaefer For Pipeline News

toon. Pat’s father Dean, who runs operations for the company, said that the land they are on was formerly a golf course. When the course moved to

the other side of town, it left a stretch of vacant property along one side of Highway 7. ɸ Page A25

Delisle – Cobra Industries Ltd. started in 2007 by building components for other tank manufacturers, and after a work slowdown, owner Pat Esau decided if they built all of the parts for the tank, why not build the rest of it as well? “We built a complete tank and took it to the oil show in Weyburn,” Esau explained, “and it took off from there. It’s pretty much been steady ever since.” Cobra Industries operates in an industrial building in Delisle, a 20 minute drive from Saska-

HERE COMES CHRISTMAS! Here’s hoping the holiday delivers an abundance of glad tidings to you and yours. For your kind patronage, you have our heartfelt thanks.

Alex Karpenko (centre) measures a piece component for the tank that is being manufacturing, while two other members of the staī assist. Photo by Josh Schaefer

46 - 13th Street NE, Weyburn, SK. 306-842-5490 www.hseintegrated.com

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PIPELINE NEWS December 2012 Éş Page A24 “These lots were sitting empty for years, so we approached the town about building here,â€? said Dean. “It costs a lot less for commercial property (compared to a city), and we think it’s an ideal location. “It’s maybe a bit tough for people that need tanks to ďŹ nd us, we’re not right in their area and they won’t run across us right away, but we can service a larger area.â€? With access to major shipping corridors, Cobra Industries can service the entire province of Saskatchewan from their central location. Before moving into town limits earlier this year, Cobra Industries was building 400-bbl. tanks on Dean’s farm about 15 kilometres southeast of the town. They have a larger building and a sta of about ďŹ ve people, and are building up to three tanks per week. “Now that we’ve moved in here, we have the room to build bigger tanks but in the other shop we didn’t,â€? Pat explained. The company builds all of their tanks horizontally. By using a rotating jig,

they are able to weld the ďŹ ve-foot wide rings together in one constant, consistent weld. The rotating jig also makes it easier to manoeuvre the tank around to weld the various components on to it. This arrangement allows them to install those the components, such as anges, at ground level. ɸ Page A26

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Sergiy Gryshchenko welds the base for one of the tanks that Cobra Industries is currently manufacturing. Photo by Josh Schaefer YW +SSH[MPP MW GSRXEKMS WW TE WS [I¡H PMOI XS Y MX SR XS EPP SJ ]S H ER W QE MWX LV 1IVV] ' SV ]SYV J OW ER XL PX XJI EV LI RH ZEPYIH JVMIRHWLMT E WYTTSVX

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A26

PIPELINE NEWS December 2012

Alex Karpenko welds a component onto one of the tanks.

Photo by Josh Schaefer

CUSTOM TREATING AND TERMINALS

High on quality

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Éş Page A25 “Each company has their preferred method of assembly,â€? Pat said. The horizontal method is easier to work with and does not require as much heavy lifting as a vertical assembly method would take. Cobra Industries puts a high priority on building a quality product. “There are a lot of good tanks out there, and there are also a lot of poorly-built ones,â€? Pat said, “and we don’t put out a huge quantity, but we try to put out the best quality.â€? Pat noted of the tanks they have sold, they haven’t received a complaint about the units at all. Safety is also a large contributing factor to how they build their tanks. Cobra has recently joined the Safety Association of Saskatchewan Manufacturers. “We just wanted to provide a safe environment for all of our sta,â€? Dean said. “In the other shop, we were only concentrated on building 400’s and that’s what we’ve still been doing,â€? Pat said, but in the near future, Cobra will be setting up to build bigger tanks, citing a lot of inquiries as the reason for expansion.

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PIPELINE NEWS December 2012

A27

TransCanada, Chinese to build oilsands pipeline Calgary – TransCanada Corp. has teamed up with Chinese-owned Phoenix Energy Holdings Ltd. to construct a $3 billion pipeline in northern Alberta that would carry 900,000 barrels per day of crude oil and 330,000 barrels per day of diluent. Both companies will own a 50 per cent share in the 500 kilometre Grand Rapids project to connect a developing oilsands area northwest of Fort McMurray to the industrial heartland near Edmonton. Phoenix Energy, a business entity of statedowned China National Petroleum Corp. is developing its Dover and MacKay River oilsands assets and has entered a long-term commitment to ship crude oil and diluent on the Grand Rapids pipeline. The new pipeline system will be operated by TransCanada and is expected to be in service by early 2017, subject to regulatory approvals, with capital spent between 2014 and 2017. “As Alberta crude oil production continues to

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grow, it’s critical to have the infrastructure in place to move oil to market from emerging developments west of the Athabasca River,” said Russ Girling, TransCanada’s president and chief executive officer in an Oct. 29 news release. “This is the first major pipeline project to meet the needs of this fast-growing area. “We are pleased Phoenix is joining us on the Grand Rapids pipeline project to transport this growing, long-term supply of Canadian crude oil in a manner that respects the communities and environment where the pipeline will operate.” The project will be constructed, owned and operated by the Grand Rapids Pipeline Limited Partnership, which is jointly owned by Phoenix and

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a wholly-owned subsidiary of TransCanada Corporation. “Phoenix is committed to developing its Dover and MacKay River oilsands assets through multiple phases,” said Zhiming Li, Phoenix’s president and chief executive officer. “Given that transportation in the Athabasca region has become a bottleneck, working with TransCanada to build a pipeline system in a timely fashion is crucial to implement our development strategy. “This transportation solution will be important to Phoenix and other potential producers in this area to monetize their huge resources,” Li said. ɸ Page A28

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A28

PIPELINE NEWS December 2012

Operating Days, metres drilled declined Rig Locator records show that 82,295 operating days were booked in the ďŹ rst three quarters of 2012 by members of the Canadian Association of Oilwell Drilling Contractors, down from 95,084 operating

days in the comparable period last year. Total metres drilled by CAODC members during the Januaryto-September interval declined to 15.86 million from 16.19 million metres in the year-prior

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period. Wells have averaged 1,938 metres over the ďŹ rst nine months of 2012 compared to 1,753 metres a year ago. It took CAODC members an average 10.10 days to drill a well during the nine-month period versus 10.30 days to the end of September 2011. Including oilsands evaluation holes and experimental wells, the top contractor over the ďŹ rst nine months of 2012 was Precision Drilling. The contractor drilled 2,611 wells and

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ďŹ nished 4.01 million metres of hole. Precision's main customer during the nine-month period was Canadian Natural Resources Limited, which accounted for 788 of its wells (30.2 per cent). Husky Energy Inc. (231 wells) and Encana Corporation (229 wells) - each accounting for 8.8 per cent of the total – were the next top customers for Precision. The company’s rig 235 drilled 76 wells to the end of September, the highest count for a rig. Second-place ďŹ nisher Ensign Drilling Inc. rig released 1,838 wells and drilled 2.69 million metres. Canadian Natural was also the main customer of Ensign (326 wells, or 17.7 per cent of the total), followed by Cenovus Energy Inc. (195 wells, or 10.6 per cent) and Suncor Energy Inc. (139 wells, or 7.6 per cent). Savanna Energy Services Corp. was the only other contractor to drill more than a thousand wells. The company rig released 1,111

wells over the ďŹ rst three quarters and ďŹ nished 1.84 million metres of hole. The company main customers were Cenovus (329 wells, or 29.6 per cent of the total), Northern Blizzard Resources Inc. (77 wells, or 6.9 per cent of the total) and Canadian Natural (72 wells, or 6.5 per cent of the total). In fourth place, Trinidad Drilling Ltd. rig released 687 wells in the January-toSeptember period (1.43 million metres of hole), followed by Nabors Drilling with 492 wells drilled (1.31 million metres). Precision was the top contractor for horizontal wells during the ďŹ rst nine months of the year with 1,202 wells rig released and 2.96 million metres of hole (excluding test/experimental or DSW wells). Ensign was second with 837 horizontal wells (1.99 million metres), followed by Trinidad with 537 wells (1.31 million metres), Savanna with 448 wells (1.2 million metres) and AKITA Drilling Ltd. with 239 wells

(617,048 metres). Excluding test wells, Precision’s share of the market rose to 28.57 per cent over the ďŹ rst three quarters of 2012 from 27.43 per cent last year. Ensign’s market share rose to 17.58 per cent from 16.45 per cent. Rig utilization in the third quarter for CAODC members was 38.66 per cent, o from 51.09 per cent a year ago. Nine-month rig utilization stands at 37.94 per cent this year compared to 43.11 per cent a year ago. Excluding experimental or Eastern Canada wells, AKITA's 38 rigs had a 63.87 per cent utilization rate during the ďŹ rst nine months of the year. Panther Drilling Corp.'s three rigs booked a 61.56 per cent utilization rate, while Fox Drilling Inc.'s two rigs had a 60.40 per cent utilization rate. Ironhand Drilling Inc. ranked ďŹ rst in average metres drilled per rig (44,749 metres), followed by Panther (32,313 metres) and Bonanza Drilling Inc. (31,573 metres).

Critical to have the infrastructure in place Éş Page A27

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TransCanada expects to apply for regulatory approval for the project in 2013. The ďŹ nal pipeline route and design will

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be determined with Aboriginal and stakeholder input, as well as consideration for environmental, archeological and cultural values, land use compatibility, safety, constructability and economics. The Grand Rapids system will further expand TransCanada’s liquids transportation capabilities and comple-

ment TransCanada’s extensive operating experience in Alberta. TransCanada recently announced the Northern Courier Pipeline project, a 90-kilometre pipeline system to transport bitumen and diluent between the Fort Hills mine site and the Voyageur Upgrader located north of Fort McMurray, Alberta.

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PIPELINE NEWS December 2012

A29

Crescent Point just shy of 100,000 boepd production „ By Richard Macedo (Daily Oil Bulletin) Calgary – Crescent Point Energy Corp. reported lower net income in the third quarter, and reached a new production record during the period of 99,631 barrels of oil equivalent per day, weighted 90 per cent to light and medium crude oil and liquids. This was three per cent above the second quarter of 2012 and 38 per cent higher than the third quarter of 2011. The company's net income in the third quarter dropped to $2.35 million from $204.62 million during the same period last year. This happened mainly as a result of an unrealized derivative loss and increased depreciation, depletion and amortization expense, partially oset by the deferred tax recovery, the increase in funds ow and an unrealized foreign exchange gain. During third quarter, the company spent $259.4 million on drilling and development activities, drilling 149 (84.7 net) wells with a 100 per cent success rate. Crescent Point also spent $54.5 million on land, seismic and facilities, for total development capital expenditures of $313.91 million. “As we approach the end of the year, we feel we're in a great position to meet or exceed our targets for 2012,â€? said Scott Saxberg, president and chief

executive oďŹƒcer, during a third quarter conference call on Nov. 8. Crescent Point maintained consistent monthly dividends of 23 cents per share, totalling 69 cents per share for the third quarter of 2012. This is unchanged from 69 cents per share paid in the third quarter of 2011. On an annualized basis, the third quarter dividend equates to a yield of 6.5 per cent, based on a volume weighted average quarterly share price of $42.54. Subsequent to the quarter, on Nov. 1, the company announced the US$861-million acquisition of Ute Energy Upstream Holdings LLC, a privately held oil and gas producer with assets in the Uinta Basin light oil resource play in northeast Utah. The company said its balance sheet remains strong, with projected average net debt to 12-month cash ow of approximately one times and signiďŹ cant unutilized credit capacity. Crescent Point continued to increase oil deliveries through its Stoughton rail terminal, providing access to diversiďŹ ed reďŹ ning markets and more stable price dierentials to West Texas Intermediate (WTI). Third quarter average throughput was more than 15,500 bpd, with an additional 1,000 bpd also being delivered to third-party sites. ɸ Page A30

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A30

PIPELINE NEWS December 2012

Crescent Point boosts oil deliveries on rail ɺ Page A29 Expansion of the Stoughton rail facility, which is expected to be completed in the fourth quarter, will increase shipping capacity to 40,000 bpd. In the April 2012 Pipeline News story about this facility, it was noted the company’s oil production in the region at that time was rougly 46,000 to 47,000 barrels per day. The added shipping capacity will mean Crescent Point will have the ability to ship most of its southeast Saskatchewan crude production by rail. Late in the third quarter, the company completed preparation of its rail loading facility in the Dollard area of southwest Saskatchewan and delivered its first loads in October. Current capacity is approximately 4,000 bpd. “For competitive reasons, we are not disclosing exact markets for our railed volumes,” Trent Stangl, the company's vice-president of marketing and investor relations, told the Bulletin. “Generally

er Service Ltd. Curly’s Pick Mark T. (Curly) Hirsch

1595 Dieppe Cres. Estevan, Sask. S4A 1W8

Secor CertiÅed Cell: (306) 461-5898 Fax: (306) 634-6690

Crescent Point Energy will expand its Stoughton facility, see here last winter, to conƟnue its crude-by-rail markeƟng strategy. File photo

speaking, we have targeted multiple markets outside of the well-supplied U.S. PADD II market. These are markets that have historically been supplied by waterborne crudes. The ability to receive volumes by rail opens up a new opportunity for the refineries in these markets.” Crescent Point continued to implement its hedging strategy to provide increased certainty over cash flow and dividends. At Oct. 31, the company had hedged 56 per cent, 54 per cent, 35 per cent, 17 per cent and three per cent of its oil production, net of royalty interest, for the balance of 2012, 2013, 2014, 2015 and the first quarter of 2016, respectively. Average quarterly hedge prices range from C$88 per bbl. to $94. In the third quarter, Crescent Point participated in the drilling of 66 (43.8 net) wells in southeast Saskatchewan and Manitoba, achieving a 100 per cent success rate. Of the wells drilled, 44 (35.6 net) were horizontal wells in the Bakken light oil resource play. The company also participated in the drilling of 22 (8.2 net) horizontal oil wells in conventional zones.

During the quarter, the company converted six additional Viewfield Bakken producing wells to water injection wells. By the end of the third quarter, Crescent Point had converted a total of 41 producing wells to water injection wells in the play. Production performance from water injection patterns in the Viewfield Bakken resource play continues to exceed Crescent Point's expectations and has demonstrated the field wide applicability of waterflood to the play. Discussions with potential unit partners and the Saskatchewan government to implement a unit-wide waterflood are advancing. Across Crescent Point's asset base, the company continues to pursue multiple applications of new technologies to maximize recoveries and improve efficiencies. In the Saskatchewan Bakken, this has included re-entering existing wells that were originally completed with eight-stage and 16-stage cemented liners and increasing them to 25-stage and 30-stage cemented liner completions. The company has identified 90 wells in the play as candidates for this process. ɸ Page A31

PIPELINE NEWS December 2012 Éş Page A30 Crescent Point has also drilled three, twomile horizontal wells to date in the Flat Lake Bakken play, achieving a 100 per cent success rate. Based on this success, the company plans to drill a fourth, twomile horizontal well in the fourth quarter. During the third quarter, the company participated in the drilling of 20 (14.5 net) oil wells in southwest Saskatchewan, achieving a 100 per cent success rate. Of these wells, 11 (9.8 net) were drilled in the Shaunavon area. The company is currently injecting water into seven horizontal injection wells in ďŹ ve pressure maintenance programs in the Lower Shaunavon zone. Crescent Point continues to be encouraged by results to date in all programs. Through acquisitions completed in 2012, Crescent Point has acquired 17 injection wells that are injecting water into an additional ďŹ ve patterns in the Upper Shaunavon formation. Based on success to date, the company plans to begin injecting water into an additional ďŹ ve wells in the Upper Shaunavon by year-end. In total, Crescent Point expects to have up to 30 water injection wells into the play by year-end 2012. To date, 30 wells have been drilled at eight wells per sec-

tion spacing in both the Lower and Upper Shaunavon zones with no signs of interference. By the end of the third quarter, the company had drilled two wells in the Lower Shaunavon at 16 wells per section, with plans to drill another two by year-end. Late in the third quarter, the company completed preparation of its rail loading facility in the Dollard area and delivered its ďŹ rst loads in October. Current capacity is approximately 4,000 bpd, with plans for further expansion in 2013. Crescent Point also completed construction and commissioned the second of three new batteries planned for 2012. Construction on the remaining battery is underway, with commissioning anticipated by the end of the fourth quarter. In the south-central Alberta and west-central Saskatchewan areas during the third quarter, 32 (20.6 net) oil wells were drilled, with a 100 per cent success rate. The company's plans for its ďŹ rst waterood pilot in the Beaverhill Lake light oil resource play are well underway. Crescent Point expects the pilot to be operational in early 2013. To date, the company has drilled 17 (17 net) wells with a 100 per cent success rate in the Viking area on lands acquired in the Cutpick Energy Inc. acquisition, which

closed on June 20. The successful drilling results from this initial program have expanded the pool boundary by eight sections, beyond the 83 net sections expected at the time of the acquisition. Late in third quarter, Crescent Point converted a producing well to a water injection well on the Cutpick lands, bringing the total number of water injection wells to three. The waterood program began in the area in 1998 and, in August 2011, a second pilot was established. With encouraging production performance to date, the company plans to convert an additional three producing wells to water injection wells on these lands in 2013. Crescent Point has access to a signiďŹ cant land base in southern Alberta and has been pursuing several exploration projects in the area. In the fourth quarter, the company plans to drill up to an additional seven wells to follow up on previously drilled unconventional exploration wells in the Alberta Bakken play. In the U.S., during third quarter, the company participated in the drilling of 30 (5.4 net) oil wells, of which 14 (2.2 net) targeted the Three Forks formation, achieving a 100 per cent success rate. Crescent Point also drilled one (0.4 net) service well. In total in 2012, the company expects to

drill up to 16 net wells targeting the Bakken and Three Forks zones. Crescent Point is currently working with its service providers to reduce capital costs that have seen upward pressure due to high industry activity levels in North Dakota. Crescent Point expects to release its 2013 capital expenditure plans in early December.

A31

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A32

PIPELINE NEWS December 2012

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PIPELINE NEWS

SECTION B December 2012

Making the transition from one-offs to manufacturing By Brian Zinchuk Estevan – Wil-Tech Industries of Estevan is undergoing a transformation, as the hydraulics specialist has seen one of its products take off. That, in turn, has led to some introspection and evolution within the company. About four years ago Wil-Tech began work on the first prototype of its bucking unit. The old way of assembling and disassembling downhole oil tools was to manually use pipe wrenches and snipes. That didn’t provide any way of ensuring how much torque had been applied, and generally speaking, wasn’t particularly safe. So WilTech started using power tongs, the type used on service rigs, to do the job of threading pipe together or disassembling it. The tongs are mounted horizontally instead of vertically, and are tied into an electronic monitoring system that provides detailed records on how much torque is applied. It takes away the manual factor, and instead provides safe, repeatable, measurable torque application to oil tools. The measurable part is key from a quality control perspective. The product is known as the WilTorq 11000. “We have built different sizes. This is the most common we have been asked for,” said Jim Wilson, president. His son

Dustin is Estevan branch manager and is also involved with product development and production. The product has seen several years of evolution. Indeed, each order has had clients asking for some form of customization, be it different lengths, different torques, dif-

ferent logging requirements, etc. The big application has become packers. “In the past, that would have been with a pipe wrench or chain tong, and that was very unsafe. The problem isn’t threading it together as much as taking it apart,” Jim said. ɸ Page B2

A completed Wil-Torq 11000 is ready to go out the door. The machine uses power tongs to Ɵghten or loosen oil tools, and provided a computerized record of that acƟon.

Travis Souther, leŌ, and Cohen Wells prep a new Wil-Tech Industries Wil-Torq 11000 bucking unit prior to delivery. Both are heavy duty mechanic apprenƟces, with Wells as a hydraulic service technician and Souther being a cylinder mechanic.

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B2

PIPELINE NEWS December 2012

You see one, you want one ɺ Page B1 Now things are starting to take o. They

are in talks with three of the four largest oil services companies in the

world, a.k.a. the big four, and one has recently placed an order for 10

Service manager Mike Holowchuk, leĹŒ, and manufacturing department manager Jason Hale go over some blueprints.

units. That was after they initially purchased one, and then three. Their total, after this order will be 14 units. “We’ve sold dozens of units,â€? Jim said. Predominately they have gone to the Canadian market, but some clients have U.S. operations where they are now being deployed. “We’ve shipped to Williston, and next is to Fort Worth,â€? Jim said. Dustin noted they have bucking units in Grande Prairie, Edmonton, Red Deer, Whitecourt, and of course, Estevan, where most of the local oil tool companies employ a unit. “We’re certainly surprised how well it’s doing in the market,â€? said Jim, who pointed out a company from Estevan is now supplying the North American market. “The hard part is the speciďŹ ed needs of each customer,â€? Dustin said. “It’s evolved with knowledge of our employees and feedback

from customers.â€? “Our intent is to have our generation two version ready for the 2013 oil show,â€? he said, referring to the Saskatchewan Oil and Gas Show in Weyburn next June 5-6. The following week is the Global Petroleum Show in Calgary, where they hope to make a splash. “Evolving as a manufacturer, you want to standardize the units, but the customers keep wanting to add new functions,â€? Jim said. “We’ve been asked for mobile trailermounted units,â€? he noted. Higher torque values are another request. One potash mine that is using oil tools wanted one for assembly and disassembly. “One of the largest sellers for the unit is safety,â€? Jim said. “Safety and eďŹƒciency,â€? Dustin added. “The torque monitoring is important as well. A report can be printed o at the time. There’s

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an approval process saying, ‘Yes, it has been torqued.’â€? Dierent customers have dierent software requirements to integrate into their own system. As a result, a company that specializes in hydraulics and machining now has a software engineer on sta in Regina. “We had to have that in-house,â€? Jim said, noting the important of retaining that knowledge from job to job, as opposed to hiring short term contractors. That software engineer also works on other aspects of the business, such as pressure testing, logging and hose certiďŹ cation. The company is also working on getting its ISO 9002 certiďŹ cation, an important consideration when working with large, international ďŹ rms. Operators miss it when they move “Basically the product sold itself,â€? Dustin said. An important element has been the operators of these units. As they have gone on to work with other companies in the oil tool business, they quickly miss working with these bucking units, and request one at their new place of work. Dustin said, “It’s not so much managers as operators requesting it. They’ve switched jobs, then push for it. That’s a huge aspect.â€?

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PIPELINE NEWS December 2012

B3

BeeÀng up an ag product for the oilpatch „ By Brian Zinchuk

Project manager JarreĆŠ Johnson demonstrates the side-opening door.

of units would start seeing failure) is much higher. “We shot for 8,000 hours in the B10 life,â€? he said. “Everything was beefed up from an ag product. We made it more user-friendly and less maintenance intensive. We used higher-quality components,â€? according to Johnson. “The pump and hydraulics are overrated past what they need to do.â€? ɸ Page B4

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Weyburn – When it comes to new products, this one really sucks, and that’s a good thing, because that’s exactly what it’s supposed to do. Over the past year, Weyburn-based Stewart Steel Inc. has gone from the prototype stage to producing and delivering over a dozen units of its Vac-U-Spread, a vac wagon used primarily for handling drilling by-product disposal. “The product originated as an agricultural product, but applied in the oilďŹ eld for land spreading,â€? said Jarrett Johnson, project manager. The agricultural application for similar units is in the use of collecting and spreading manure, usually from pig barns. Johnson has been with Stewart Steel for 12 years. “I grew up on a hog farm. I ran these

things as a kid,� he said. “Guys were using these in the oilpatch, buying ag units. But the service life wasn’t designed for industrial use,� he said. An agricultural product, for instance, might see 2,000 to 4,000 hours of use before showing signs of wear. Stewart Steel sought to double that. The B10 component life ratings they were aiming for (the point at which 10 per cent

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B4

PIPELINE NEWS December 2012

Vac-U-Spread built for industrial usage ɺ Page B3 Doug Demby of Demby Trailer Ltd. pointed out the opportunity to Stewart Steel. The two companies work closely on products, and the Vac-U-Spread is sold by Demby Trailer. The official decision

to go ahead with the project was Oct. 1, 2011. Their turnaround time was quick. Johnson said, “We were doing first unit testing by Jan. 5.” That initial prototype was tweaked and eventually sold. So far, 13 units have been

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delivered. “They’re all over the place – Saskatchewan, Alberta and Manitoba now,” he said. “It’s built and marketed as an ag product. It’s not a licensed vehicle like a vac truck,” Johnson explained. “We’re an ag manufacturer.” Many of the people who purchase these units are farmers who will hire on with their tractor and vac wagon to work with a drilling rig. They’ll put a blade on the tractor and take care of snow, for instance. It’s pulled by the tractor and needs either the PTO or hydraulics of the tractor. The Vac-U-Spread is a crossover product, he noted. The key thing is high flotation. These units carry a lot of weight. With a larger capacity than typical farm units, their 100 per A dedicated producƟon cell is used to build Vac-U-Spread units.

cent capacity is 23 cubic metres, with a usable capacity of 20 to 21 cubic metres. Including the unit, the gross total weight is up to 85,000 pounds. “Big trucks leave ruts,” Johnson said, adding that tractors can land spread in softer

conditions without negative environmental impact. “We recommend a large four wheel drive tractor,” Johnson said. Other options are the rubber track-style tractors, like the Case IH Quadtrac. As for tires or tracks, they don’t note a

preference. The primary usage may be land spreading, but over the past year some units saw usage sucking production fluids out of tanks and bringing them to the road to be transferred to trucks. ɸ Page B5

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PIPELINE NEWS December 2012 JarreĆŠ Johnson uses the hand crank to seal the door.

Éş Page B4 Design “We identiďŹ ed areas of improvement and modelled everything in 3D SolidWorks,â€? he said, referring to a threedimensional drafting/ modeling program. The design was also put through an extensive amount of ďŹ nite element analysis, looking for stress points in the design. Computationheavy ďŹ nite element analysis used to be the purview of companies like Boeing or Lockheed Martin. Now a small manufacturer in Weyburn is capable of having the computer power to do it. “We’ve structured our company to use technology to our advan-

tage,â€? Johnson said. “We do extensive 3D design. We can look at things several dierent ways before we start, without cutting a piece of steel. “I can do physical collision analysis, and multiple hole alignment analysis.â€? Multiple hole analysis looks at a series of holes that are needed to line up, and works within their tolerances to see if it will ďŹ t. “I’m in the process of doing an owner’s manual right now,â€? Johnson said. It will incorporate the feedback they have received from users. “So far we estimate there has been approximately 10,000 hours of usage in the ďŹ eld, so they

have a good idea of what works and what doesn’t.� “Our machine has an internal paddle agitator,� Johnson said. “In testing we had people who own machines telling us we had exceeded what was expected.� Once the company reached its 10th unit, they did some reassessment, and with the Mark II design, they switched to a heavier motor and reduced the size of the agitator. Agricultural designs use an auger for agitation, but they wanted something with more of a stirring action. The upsized motor and reduced agitator size made for approximately 10 times more agitation power. “We tested it by sucking up cubic yards of gravel. At one time we had about four cubic yards of gravel in the thing.� A typical agricultural unit will generate 15 inches of vacuum pressure. The Vac-U-Spread far exceeds that.

“This will generate in excess of 22 inches of vacuum pressure,â€? he said. “This thing really sucks.â€? Vac-U-Spread vac wagons use the exact same pump system as that used on vac trucks. “We used Hibon 820 blower packages,â€? Johnson said. The package includes muer, silencer, valves and the drive train. “We’ve had owners with a tridem truck and Vac-U-Spread say the Vac-U-Spread has better performance,â€? he said. “Given the choice, they will pick the Vac-USpread over the truck.â€? “It will pull on 23 cubes of pure liquid (such as water) with a seven foot lift in just over seven minutes.â€? It doesn’t take long to blow o a tank, either. About 45 seconds will do it. There’s a completely adjustable rear spread plate that adjusts for thickness or pattern. There are options

that can be included, like tool boxes and a rear beavertail step. Choices can be made for straight uid or high solids agitation. And similar to Henry Ford’s philosophy, you can have it in any colour you want, as long as it’s blue. While PTO power is typical, it is possible to get a hydraulically-driven system in situations where the tractor may not have a PTO. Unlike vac units seen on trucks, the rear door swings to the side, instead of being raised by a hydraulic ramp. It means one man can close it and seal it by hand, and there is no

danger of having a door suspended above you. It typically takes about four weeks to produce a new unit. One of Stewart Steel’s deďŹ ning characteristics is its adoption of Lean manufacturing principles, seeking to eliminate as much waste as possible from production. “We don’t build ďŹ ve frames and ďŹ ve tanks. They’re built as one. We’ve built an adaptable production cell, set up to build this machine. It’s a modularized project. Based on orders, we can add more men, or remove men, without aecting production eďŹƒciency,â€? Johnson said.

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B6

PIPELINE NEWS December 2012

Fleet Energy offers new waste disposal services

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„ By Brian Zinchuk Forget – Location is the most important part of real estate, and the latest addition to the waste disposal business in southeast Saskatchewan seems to have locked up a good one. Fleet Energy opened its doors this fall, and held a grand opening on Oct. 30. It’s located right on the south side of Highway 13, just 3.2 km east of Forget, putting it on the Bakken fairway and perhaps just as importantly, on primary highway. Nathan Hollick, Fleet Energy’s president and CEO, has long, deep roots in the southeast Saskatchewan oilpatch. One can run out of ink writing them down. “I’ve operated in southeast Saskatchewan since I started my ďŹ rst company in 1981 – Vista Petroleums. That was bought out around ’95-96. My last company sold out in 2010,â€? he said. Herc Oil was its name, and it had the slogan of “I will work with Herc.â€? “We took over the Williston Wildcatters Assets,â€? he said. “I co-founded Big Sky Drilling in 1985. Ensign bought it out around 2000. I sold out my shares to the operating group before that. Hollick led a number of oil companies, specializing in reservoir exploitation, from 2002 to 2006, including Empire Capital and Empire Resources. And now Fleet is Hollick’s going concern. He’s backed by a small group of investors out of Calgary, some of which “had a Saskatchewan persuasion.â€? Hollick has always been a Saskatchewan resident and was raised in Blaine Lake, Saskatchewan. “Fleet came together as a group of oil people who saw a need to have these waste facilities. With the advent of the technology of the Bakken, you have owback uids from fracking. Prior to the Bakken, wells in southeast Saskatchewan weren’t fracked,â€? Hollick explained. “We’re a waste processing facility. We’re all here providing a service.â€? Chad Bunch, vice-president of business development and a professional mechanical engineer, noted the highway location was a big reason they chose the site. ɸ Page B7

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PIPELINE NEWS December 2012

Through the pea soup fog you can make out all the important element of Fleet Energy’s new disposal site. In the foreground is the solids bin. From leĹŒ is the retenĆ&#x;on point, unloading staĆ&#x;on, pumphouse and tank farm.

Éş Page B6 “Location is critical. Accessibility is key,â€? Hollick said. “It just made sense. Highway 13 never gets banned. It’s an open corridor. It’s strategic for us to be here.â€? The site used an existing well that was re-entered in 2008 and converted to a disposal well with coated tubing. The well’s casing was checked with an eddy current and ux leakage tool beforeany uid was injected. The well uses the Mannville formation for disposal. The site will accept oily waste, produced water, owback uids, completion water and solids. They just opened up their solids receiving area at the time of the grand opening. “You’ll see a guy come in with two cubic meters of oily solids. What do you do with two cubes?â€? Hollick asked. “We’re a facilitator. We then deal with the solids, blend them down, and/or clean them up. “It depends on the content of the solids which determines how we have to deal with them. They can go to a land farm, a landďŹ ll, or caverns. The facility has two 1,000-bbl. tanks, and four 750-bbl. tanks, plus a oc tank and the aforementioned dumping bin for solids. It was built with the ability to expand. Indeed, by the time this edition hits newsstands, that expansion was expected to have taken place. “We are looking to expand it as early as next week, adding another 1,000bbl. tank,â€? Bunch said. Four layers In designing their facility, Fleet sought to set a new standard. Bunch said, “We have four layers of protection between our uid and the environment.â€? The ďŹ rst layer is the pipes, valves and ďŹ ttings.

B7

Secondary containment is standard, but they’ve also added a box and liner for any pipe outside the usual secondary containment structures. That means between the unloading points and the tank farm, for instance, the piping is all surrounded by a lined box, something that Bunch said is “not at all common.â€? The entire production area is lined and sloped to a containment pond, such that if something did spill on the surface or breach secondary containment, it would ow into that lined pond. Below the lined pond is a sandy layer sloped to a monitoring sump, and beneath that is a bowl-like structure made up of a minimum three-foot layer of clay. Indeed, there is a liner and clay under all of the production area. The fourth layer is a keyed dyke surrounding the lease site, dug down to the natural clay layer. Since the area saw ooding in 2011, the entire site in use was raised above that level. “If this place were to ood now, the highway would be ooded before it breached our dykes,â€? he said. Since the highway did not ood during this historic summer of 2011, that should not be an issue. They are seven feet above last year’s high water. Surrounding the site are piezometer wells for monitoring outside the keyed dyke. There are four barriers and four ways of monitoring those barriers, Hollick said. “It was our commitment when we were consulting people in the area,â€? Bunch said. “We wanted to engineer our lease to mitigate any eects on the environment. ɸ Page B8

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PIPELINE NEWS December 2012

Four layers of protection

Three unloading staƟons are set up to allow drive-through operaƟons.

ɺ Page B7 “I like to think of this as the Fort Knox of leases when it comes to environmental protection ,” Hollick said. “When I handed in this application to the regulators, I thought this would set the bar. As for piping protection, Bunch noted there are four things you need: corrosion, chemical, crack and abrasion resistance. “We use a combination of coatings, stainless steel and specialty HDPE (high density poly ethylene) wherever applicable. We engineered out the susceptibility. There’s lots of stainless steel fittings. Hollick said,“This is a business where the environment is important. We’re all here for a short time, geologically speaking. The idea was to build a safe place for the environment. We should all leave as little a footprint as possible.” Operations The company had a “soft start” of operations at the beginning of Septem-

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ber, and opened to general usage in the beginning of October. There are three unloading stations staggered at a 45 degree angle. Trucks drive in a loop, first going to the left to the unloading stations, then looping to the right around the containment pond and out to the exit. As a drive-through system, there is no backing required for fluid unloading, but solids disposal does require one to back up to the receiving bin. The lease is designed and tested to handle B-trains. They rely on the truck pumps to unload, typically at a rate of one to two cubic metres per minute, making for 15 to 30 minute unload times. With the additional tank they can handle about 40 trucks a day. The site is open 14 hours a day and on call for the remaining hours. The facility has three operators. They are already looking at additional sites. “We have two locations we’re looking at,” Hollick said, casting a broad net which includes Saskatchewan, Manitoba, Alberta, northern British Columbia, North Dakota and Montana.

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Russian work leads to Canadian manufacturing By Brian Zinchuk Redvers – A company that got its start building underbalanced drilling equipment for Russia has expanded to include fabrication, equipment rentals and manufacturing. In 2011, the company, Magna Fab Inc., part of Magnaflo Corp., came home in a way, establishing a Redvers operation. Home for owner Marc Dumaine was Storthoaks before he ended up in Calgary. Now his brother, Trent, runs the Redvers operation. Their display was one of more prominent at the Redvers Oil Showcase this past spring. Magnaflo Corp. is the holding company established 11 years ago, Marc described as he drew a flowchart of the various businesses under its umbrella. Eleven-year-old Magnaflo Systems Inc. builds underbalance drilling equipment. Magnaflo Services is the support team that goes into Russia to support that equipment and train operators. It was formed ten years ago. In 2008, Magna Fab Inc. came to be, with welding shops in Calgary and now in Redvers. Magna Flo Rentals has locations in Redvers and Calgary. It was founded in 2006 and has four partners – Marc Dumaine, Trent Dumaine, Larry Matthewson and Mike Shea. Scary week to launch a business Magnaflo Systems got it start precisely when the world got turned upside down. In the second week of September 2001, Marc was slated to fly to Russia. That was scant days after the World Trade Center and Pentagon had planes flown into them. “On Sept. 17, I got on a plan and went to Russia. I’ve got to go. Russia’s not in trouble with the U.S. I stayed in the World Trade Center Hotel in Moscow. I went into Siberia with the guys I met there. I started talking underbalance equipment with these guys. It took five more trips into Siberia, and we finally convinced the oil company to use coil tubing drilling equipment.” ɸ Page B10

Marc Dumaine, leŌ, and Trent Dumaine pose beside Magna Fab’s staƟonary hardbanding unit in Redvers. Below them is an example of Įbre grate, which the company will use to make “safety mats.”

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PIPELINE NEWS December 2012

Magna Fab establishes itself in Redvers MagnaŇow Systems’ underbalance units have found a home in Siberia, as seen here. Photo submiƊed

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Éş Page B9 Marc’s experience with underbalance drilling came from working with Tesco for four years prior to 2001. Before that, like many men from Storthoaks, he worked with Big Sky Drilling, which was purchased by Ensign. He also worked with Long Rider. “I went to the school of hard knocks. I started on rigs in 1984 with J-horn Drilling at Drumheller. I worked two weeks and gave up. It was too cold. The next summer I worked for Terry Carpenter of Carievale. We got a job working with Bird Drilling at Waskada, Manitoba. “I eventually took o for Alberta in 1988. I started production well testing there for Norward Energy Service. While working for Tesco, I moved into sales for underbalanced drilling, downtown, and was placed in with the design team for building new UBD units. In Russia, he noted, “We sold them coil tubing rigs good for 4,000 metres. National Oilwell built the coil tubing rigs and Magnao Systems built the underbalance drilling systems. “We rotated 16 guys in and out of Russia, training the Russians on operations and drilling over 2002-2003. Their underbalance systems were complete with rotating head, choke manifold with owlines coming o the BOPS. (The well production deects into the owlines and is controlled with choke). The ow then continued into a three phase separator which separates it into solids, uids and gas. Nitrogen used in the process goes to the are stack along with the gas. “Siberia is very similar to Saskatchewan for drilling. They have the same types of formations,â€? Marc said. “On average a well is 3,000 metres true vertical depth.â€? The equipment to reach such depths is usually triple drilling rigs and big, coil rigs. A Russian drilling rig will put casing into the hole, and do 15 to 20 wells on a pad. “That rig would then move and we would move in with smaller pipe and tools and drill into the formation,â€? he said. “Baker Hughes calls it ‘coil track.’â€? “We use nitrogen and oil, because nitrogen is used as an artiďŹ cial lift making the hole cleaner, also (you) drill faster.â€? “It was a new way of drilling back then. This had already taken o in Canada. ɸ Page B11

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PIPELINE NEWS December 2012 ɺ Page B10 “Western Siberia is all muskeg. They build roads from the sand at the bottom of lakes. The sand will sink into the ground. Then they bring rock in by rail from the mountains. Then they pave the road. It takes two complete years to build the lease,” Marc said. The horizontals legs are drilled just 150 metres. They then pull back and drill two more horizontal legs in different directions. “With 114 mm casing in the well, it will allow for 90 tonnes per day of oil. We increased their production to 200 tonnes per day,” Marc said. A tonne of oil is roughly one cubic metre. Magnaflo Systems has sold 13 underbalance systems and 15 nitrogen membrane units into Russia over the last decade. They continue to sell parts and provide manpower for support, as well as consulting on new wells in new fields. Everything has been built in Calgary. The last five of the 13 units were built by Magna Fab. From overseas to domestic “We started breaking into Canada as Magna Fab Inc.,” Marc said. “We saw opportunity in the Bakken, being from Saskatchewan, knowing who we know. It was two years that we were looking for a shop in Saskatchewan.” Carnduff was considered, but they found Redvers to be a better fit. “Redvers wasn’t really an oilfield town,” he said, and thus, less economic pressures in the community. The local John Deere dealer had moved to a new facility and its old building was up for sale, but had been lined up by someone else, which led Magna Fab to buy two other lots on the north side of Highway 13. The initial deal for the John Deere shop fell through, however, so in July 2011 Magna Fab Inc. did the deal on the dealership and moved in. “We gutted the whole office area. This used to be a parts area,” he said in the boardroom. The upstairs now has several offices. Enbridge has taken up some of them for their Bakken pipeline expansion project. “The Bakken opened my eyes. We should get into Saskatchewan. The busiest oilpatch is in Saskatchewan, I thought. Go home, start up a business. Trent agreed to move back to Redvers and manage a shop for me here,” Marc said. Trent liked the idea of raising his kids in a smaller town. Their roots run so deep, in fact, that Marc was mayor of Storthoaks for three years before moving to Alberta. “We moved our rentals here as well. It doesn’t do much in Alberta now. It’s a Saskatchewan company,” Marc said. The hot shot service has two trucks, a two-ton with a 40-foot flatdeck trailer, and a semi with a 53-foot flatdeck. The rentals operation includes a payloader, a 58-foot Genie lift, one generator and shale bins. They also have an eight-ton picker truck. Through the rentals division they will do lease cleanups with a truck and payloader, cleaning up after a service rig. Seeking to build drilling rig components The main shop is a fabrication outfit, doing work for oilpatch and agricultural clients. “We build pump houses, catwalks for slant rigs,

mud tanks, skids – pretty much everything,” Trent said. The company is also working on building drilling rigs. Not the derrick and substructure, but everything else around it. “In Calgary we’re building a mud tank for CanElson,” Marc stated. “We’re working with one company about building a rig right now. We’ll build the bigger parts in Calgary and smaller parts in Redvers. We’ll also assemble it in the (Redvers) yard. “We’ll build the rig, you buy the components. We take on the manufacturing of the buildings and we’ll do the electrical. We’ve got the potential to build rigs between our Calgary and Redvers shops, and the yard space to set them up. “Substructures and derricks, we don’t do. I’ll build everything around it – pumphouse, doghouse, pipe racks. The drilling company can source the sub and derrick from a third party.” “We’re certified to do ASME B31.3 high pressure piping,” Trent noted. Painting would be done in Calgary, Marc said, adding, “This corner needs a paint shop.” “In Calgary we’re doing a project for Mexico – an underbalance drilling system separation package.” ɸ Page B12

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PIPELINE NEWS December 2012

Farmers were chomping at the bit for welding ɺ Page B11 A new product they are working on is “safety mats.” They are mats meant to be placed in front of shacks. But instead of solid wood, they use fibre grate, a composite, lightweight grating that allows boots to be scraped. They are built to suspend the grating six inches above the ground, allowing mud and snow to pass through. “They’re light and easy to move around,” he said. “Safety is No. 1.” Texas gates are yet another product. Hardbanding Hardbanding is the application of a wear surface to the outer diameter of the drill pipe, heavy weights and monel collars. “It’s new in this area. We’re the only ones in this area that can do the non-mag,” Trent said. “You don’t have to ship it to Alberta to be done. That’s a big savings to the directional company.” Magna Fab has two hardbanding units. One is shop-based, the other is a-trailer based mobile unit. The shop-based version has a hydraulically controlled pipe handler that moves and positions the pipe. A large device similar to a lathe rotates

the pipe while the welding head applies the hardbanding. A computer keeps detailed records of the application of the hardbanding. Trent noticed that when drilling in the Estevan and Torquay areas, directional equipment usually needs its hardbanding redone about every three holes. “This Bakken is really hard and abrasive,” he noted. Agriculture very important “We do a lot for farmers. Panels for windbreaks are made out of 2-7/8 inch pipe, used tubing,” Marc said. A perfect example of their agricultural work is some cattle handling equipment under construction in the same shop as the hardbanding equipment. Those windbreaks are in high demand, he said, pointing to a list of customers on the boardroom whiteboard. “We’re very proud of the farming community here. When we first started, if it wasn’t for the farmers, we would have had a tougher start-up year. It’s been unbelievable, the response from the farmers. I want to thank the farmers and ranchers,” Marc said.

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With so much invested in newer, expensive equipment, farmers want repairs to look professional so that the equipment looks good when it comes time to trade it in, according to Trent. “We no sooner had a welding machine here than we had farmers at the door,” Marc said. “Farmers have so much land now, they don’t have time to do repairs themselves. “If you break it, bring it in right away, and get a good job right off the bat.” As they became more established, oilpatch companies and drilling companies are getting to know them. “My theory is it takes three years to become successful, to get known and trusted,” Marc said. Staffing The company has 14 employees in Redvers, and another 25 in Calgary. Marc’s wife Suzanne did a lot of the contract and paper work in the early days of the company, and then stepped back so they could “have a family life.” She’s worked for Thermon Heat Tracing for 12 years, and does accounts receivables. They haven’t had issues in finding staff, Trent said, with lots of friends in the area. Housing, however, has been an issue. “We bought a combination shack to house our out of province welders and the hot shot driver,” he added. Future expansion Magna Fab is already eyeing an expansion in the near future. “We’d like to add, hopefully this summer, a 120 foot by 60 foot expansion with three drive-through bays,” Marc said. The doors would be 16x16 feet. They would include two 20-ton cranes.

PIPELINE NEWS December 2012

B13

New rental division more convenient „ By Josh Schaefer Pipeline News Saskatoon – 3twenty Solutions are an innovators in the design and manufacturing of modular structures for the oilpatch. Started in January of 2011, 3twenty has been taking steel shipping containers and converting them into oďŹƒces, sleeping units, wash cars and other buildings that are needed on a job site. “The steel container gives us our structure,â€? explained Bryan McCrea, CEO of 3twenty. “From there, we are basically building houses inside of them.â€? 3twenty uses standard manufacturing processes when placing the framing, plumbing and electrical into the units. “It’s like taking a residential home, and putting it inside of a 320 square foot container module. “We’ve done quite a bit of work in the Fort McMurray and Estevan areas,â€? McCrea said. The three main products that they have sent to these areas have been sleeper, oďŹƒce and wash car units. The sleeper units focus on stylish but practical private living quarters and are built for the purpose of attracting and maintaining a workforce. The units feature private bathrooms, independently controlled air conditioning and a private dinette including a fridge and microwave. OďŹƒce units can be manufactured and custom designed to ďŹ t speciďŹ c needs, and self-contained wash car systems provide functional wash facilities for crews in the ďŹ eld. “What has been more popular is our new rental division,â€? McCrea explained. “In the last three months, 3twenty has done a lot more work in the oilpatch and oilsands area with oďŹƒce and wash car rentals. “It seems like that market really loves to rent instead of buy, so we’ve been renting a ton of units.â€? ɸ Page B14

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Cory Chambers works on the framing inside one of the steel containers being manufactured at 3twenty SoluĆ&#x;ons. The spray foam used for insulaĆ&#x;on can also be seen in the purple colour in the framing. Photo by Josh Schaefer

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PIPELINE NEWS December 2012

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Durability a key factor Éş Page B13 McCrea explained that the modular units that he sells, and now rents, are right on par with market price. What sets his company apart from other stick frame modular manufacturers is the quality and dura-

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bility of his product. “We are delivering far more value from a product that is built from steel, not wood,â€? McCrea said, “and durability is a huge requirement on these rigs and isolated projects.â€? 3twenty also ensures that the parts and components that are used to build the units are quality materials. “The end user does not want cheap, imsy doors, they want good quality, industrial commercial steel doors.â€? All of the components for the modular units are manufactured in a plant just outside of Saskatoon. Another advantage over stick frame manufacturers is that each unit is being insulated with closed cell two pound spray foam. “What that provides us with is a continuous moisture barrier along the steel, so you won’t

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A general view of the framing and spray foam insulaĆ&#x;on inside of one of the steel containers being ÄŽĆŠed as a wash car. Photo by Josh Schaefer

have the same susceptible mould that is going to grow in the stick frame and ďŹ breglass insulation buildings.â€? The spray foam also provides 3twenty with a more eďŹƒcient structure so that heat in the winter and cold air in the summer does not escape. Another huge selling point that McCrea points out is the ability to stack the product without any additional infrastructure. “It’s a huge selling point for us, especially in areas where they do not have a lot of space on their job site.â€? In essence, the units are shipping containers and as such are meant to move. “You can move them, you can drag them with a skid steer,â€? McCrea explained. “You can put it on a semi truck, you can crane it, you can pick it, you can train it, you can barge it, these things are meant to move which makes it

easy to handle on site.� So far in 2012, McCrea estimates that the oilpatch and oil sands market makes up roughly 30 per-cent of his business. “It was tough for us to compete, especially in the oilsands market, since this is an industry that picks up the phone and needs a wash car by yesterday, not in a week or a couple of weeks. “If you don’t stock it, you can’t compete, so starting the rental division was huge for us.� McCrea continues to see the oil and gas portion of his business rising and expects it to become a larger part of his business over time. “We’ve grown out company truly in Saskatchewan and in a very bootstrapping type of story, we’re moving out West and East,� McCrea said, “I can’t exactly say where it’s going to go, but it’s going to grow.�

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PIPELINE NEWS December 2012

B15

Modular builder targets Sask. Aldergrove, B.C. – A British Columbia-based modular building company is seeking to expand its oerings into Saskatchewan. Shelter Industries Inc. has factories in Aldergrove and Dawson Creek, British Columbia. “We’ve been manufacturing lot of products for Alberta,â€? said Mark Penaluna, sales and marketing manager. He described Shelter Industries as a modular manufacturer catering to the oil and gas business. They can build camps as large as 500 to 800 beds. They can build o their standard plans or customize the product. “We’re focusing on getting into the Saskatchewan market,â€? he said. The company was formed three years ago from a merger of Greensmart Manufacturing and Shelter Industries. In addition to pre-built modular units for permanent or temporary needs, one of their key products is the use of structurally insulated panels with have two pieces of oriented strand board sandwiched between insulation. A typical modular unit is up to 14 feet wide and can be up to 64 feet long. According to their website, “Pre-built modular units can be used, like building blocks, to create expansive permanent buildings, such as a multi-level residential building, a school with a full-sized gymnasium, or even a remote community complex. They can also be used for more temporary applications, such as site oďŹƒces, school portables, and workforce housing. Built indoors to stringent standards, pre-built modular units are typically higher in quality than most site-built structures. The primary advantage of pre-built modular units is speed and exibility.â€? Standard oerings include 12 x 60 foot skidded units. Twenty-man “super executive dormsâ€? have

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queen-sized beds and individual bathrooms, including their own showers. They also have lots of storage and desk space, Penaluna said. That’s a change from the Jack-and-Jill style of shared washrooms that are prevalent in the industry. In Saskatchewan they are targeting oil and gas, but Penaluna noted they are looking at any industry needed housing. Southeast Saskatchewan, in particular, is in their crosshairs. In British Columbia the company has done extensive work with kindergarten classrooms.

Spread Cheer All Around! With thanks from our entire staff for your most generous support. Happy Holiday!

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B16

PIPELINE NEWS December 2012

PIPELINE NEWS December 2012

Tracy Thibodeau works on a larger boiler that is expected to go to an oil processing plant in Weyburn.

„ By Josh Schaefer For Pipeline News

Saskatoon – Saskatoon Boiler has been sending boilers to the oil and gas industry for the last 60 years and it has been a steady industry for them during that time. Ray Graves, president of Saskatoon Boiler Manufacturing Co. Ltd., said his company manufactures several dierent boilers for the oil industry and that each one is designed for the particular job the customer requires it to do. “We build boilers for oil drilling rigs, oil service rigs, steaming rigs, and for general

Domingo Meningas wires an electrical motor on one of the boilers.

Great customer service brings customers back

Ray Graves, president of Saskatoon Boiler poses for a photo next to one of the boilers that his company manufactured.

steaming cleanup units,â€? Graves said. They also manufacture boilers for slop oil plants, and for frac water heating. “We build a special boiler for each one of those applications and that’s what sets Saskatoon boiler apart,â€? said Graves. “Most companies have one style of boiler and it’s supposed to ďŹ t all applications, in our case, our boilers ďŹ t the particular application very well because that is what they are designed to do.â€? Saskatoon Boiler’s units are widely considered to be some of the most reliable on the market and as Grave’s explained, “Down time on oil drilling rigs is disastrous, so our customers are prepared to spend more to get a boiler that will operate from fall to spring without any maintenance requirements and not shut them down. “We work very diligently to continually improve the product,â€? noting that 90 per cent of the boilers they are currently selling go to

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repeat customers. Graves also spoke about his relationship with customers. “We are very close to our customers, they are not shy at telling us what they want.â€? The dierence between Saskatoon Boiler and another larger manufacturer, he said, is that “Because we are a small independent company, we can respond to these dierent warrants.â€? All of the boilers that Saskatoon Boiler produces are designed and manufactured in house. “It’s an extremely complicated and convoluted business,â€? Graves explained. The boilers are governed by a series of codes and regulations that must be followed. All of the boilers have to be designed in accordance with American Society of Mechanical Engineers, the Canadian Standards Association and the individual boilers act for each province in Canada. Going above and beyond these codes, Graves showed Pipeline News shelving units full of their own internal codes and practices that they follow to go above and beyond the basic requirements. “While these codes are very cumbersome and expensive to comply with and institute,â€? Graves explained, “the justiďŹ cation for it is that we are building a safer product.â€?

The boilers have to be designed and engineered for the province or state they are being manufactured for to meet all of the regulations. The design must then be registered with the province or government authority before manufacturing begins. In the case of all oil ďŹ eld boilers manufactured by Saskatoon Boiler, they are also registered with Underwriter’s Laboratories of Canada, which gives them an approval label for the units that covers the whole boiler. The ULC label covers the oil burner, the boiler, all of the controls and how the components are married together. “When a customer buys one of our boilers and see’s the ULC label on it, there’s a lot of assurance. “This is one of the reasons we can send our boilers into the United States and to o-shore companies. These approvals are recognized and not all boilers have these approvals, but ours do,â€? Graves explained. “We are building the best boiler we know how to build.â€? Saskatoon Boiler has sent oil ďŹ eld boilers across Canada, the United States and Siberia. “We know how to outďŹ t these boilers for cold weather operation,â€? Graves said. During a plant tour, Graves explained that the boilers they build assist in the production of

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oil from the time it is taken out of the ground boilers into an area that we can’t service them.â€? until it is reďŹ ned in a gas processing plant and Saskatoon Boiler has two service trucks with put into the pipeline. a third one currently being built. The current Graves also explained that steam around ďŹ eld service crew consists of a dedicated sta, drilling rigs is a safe source of heat. “You don’t the most junior of whom has been with the have problems with something burning like an company for 14 years. open ame or hot water heater. It is very safe, “We have service people going out to service and very eective.â€? the boilers that they built in this factory, and the The units are also becoming more energy customer likes the idea of the factory servicing eďŹƒcient. “We have to pay attention to eďŹƒciency, the boiler that built it 40 years ago,â€? said Graves. especially as fuel prices increase. That’s prompt- “We are fortunate that boilers are used for a ed the move to ďŹ ring the boilers on natural gas variety of applications.â€? and diesel. Saskatoon Boiler celebrates its 100th an“It saves a lot of money. Even if we can save niversary in 2014. a gallon of fuel an hour, over the course of a week, that cost savings can add up.â€? Boilers are consistently coming in to their shop in Saskatoon to have a conversion performed from ďŹ ring ‡ &DQDGD 8QLWHG 6WDWHV 2LOILHOG 7DQN 7UXFNV ‡ on just oil, to ďŹ ring on oil and natural gas. ‡ +RW 2LO 7UXFNV ‡ 3UHVVXUH 7UXFNV ‡ Service is an aspect ‡ %REFDW *UDYHO 7UXFNV ‡ %DFNKRH ‡ of the business that ‡ )UDF :DWHU +HDWHU )UDF 7DQNV ‡ Graves likes to focus on ‡ &RPER 9DF 8QLWV ‡ 1*/ 7UDLOHUV ‡ as well. “We don’t send

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PIPELINE NEWS December 2012

Stellar sales of Trakopolis asset tracker Calgary – Can Telematics, a Calgary-based global GPS asset management company, is on a growth roll with strong sales of its industry leading web-based software called Trakopolis.

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Customers such as oil and gas, mining and transportation businesses can log onto Trakopolis to track their assets anytime and anywhere in the world in real time using a web browser. Sales of Trakopolis put the company ninth on Alberta Venture magazine’s list of 50 fast growth companies with revenue growth of 379 per cent in 2011 with a similar forecast for 2012. “It’s going very well. We are expecting to triple in size again this year. There is a lot of competition out there out, but for us, it’s having an easy to use system,â€? said Ted DuďŹƒeld, sales director. The company ended 2011 with revenues of over $1.1 million compared to $230,382 in 2010 and just $38,207 in 2009, the year Trakopolis became a sellable product. “A lot of that growth is our relationship with Google and some attention to detail on the software development side,â€? said DuďŹƒeld. “We can put all of your equipment, not just your vehicles, on one platform that is easy to use and gives our clients the information they need to succeed.â€? Trakopolis interfaces mobile communications, software applications and GPS systems including Google maps into a secure online system. Brent Moore, Can Telematics’ CEO, describes how it works in an online product video. “We can attach an intelligent hardware device to any asset, and the device continually conveys its location to our secure servers, using cellular or satellite communications,â€? said Moore. “A business can log onto Trakopolis from any Internet connection, and they can see their assets anywhere, worldwide.â€? Can Telematics integrates the latest Google maps into Trakopolis to oer customers the best possible view of their assets from a browser. “We are a Google Enterprise partner. We have an agreement to be a reseller for their map engine which means oil and gas companies can use their GIS mapping,â€? said DuďŹƒeld.

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“They can pull points of interest into Trakopolis and see their assets in real time.â€? Safety, eďŹƒciency, better control and visibility of assets are the overall beneďŹ ts for the end user using cellular, satellite or a combination of both to locate and track asset data. Trakopolis includes mobile eet management, active maps, real-time tracking, geo-fencing, customizable reports, alerts, exceptions and e-mail messaging, to suit client needs. “We work on the notion that we can track anything, anytime and anywhere,â€? said DuďŹƒeld. “Companies use the product for a number of reasons – fuel tax savings, eďŹƒciency, safety for lone workers and asset utilization purposes. “Any asset they want to have information about that can work from a location base, we can provide for them through Trakopolis,â€? added DuďŹƒeld. “You can get anything from a simple location – from knowing where your equipment is to things like engine and equipment diagnostics and when it needs to be serviced.â€? The analytics feature can even tell the user if a driver is wearing a seat belt, how fast they are travelling, and whether they have entered or exited a yard – all in real time. Can Telematics has also developed specialize tracking software called CanHaul for the shipping and transportation sector and a marketing tool called MobileMatch that enables a truck to let shippers know when it is available for work. DuďŹƒeld said Trakopolis makes up 95 per cent of Can Telematics’ business with sales in 14 countries to oil and gas, mining, transportation businesses and municipalities using the technology. “We have some law enforcement customers and it can be used for incident recreation,â€? added DuďŹƒeld. “The applications are endless. Trakopolis is built with an open API, meaning that it makes it easy for us to tie into other software systems that a company might be using. “We can really look at a company’s entire supply chain management and asset inventory control. We can tie into a number of dierent challenges that they may face as a company.

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PIPELINE NEWS December 2012

B19

Trakopolis soĹŒware developed by Can TelemaĆ&#x;cs enables businesses to track ÄŽxed or mobile assets anywhere and anyĆ&#x;me in the world with a web browser. The company is a Google Enterprise partner. Photo submiĆŠed

Íť 6$/(6 ‡ 3$576 ‡ 6(59,&( ‡ /($6,1* Éş Page B18 “Our focus has been moving into other areas outside of oil and gas as well as staying true to our roots. For us, we’re focused on sustainable growth,â€? Duff said. Can Telematics also sells a variety of vendor hardware devices for cellular or satellite service. The company, incorporated in 2007, is Canadian owned by a group of private investors and currently employs more than 40 employees. Can Telematics’ partnership with Google along with a commitment to continuous product development has positioned Trakopolis as the system of choice for many oil and gas companies and other customers. “We work very closely with Google

on our development – things like overlays and their map engines and tying into GIS mapping systems used by oil and gas companies,� said Duffield. Duffield also attributes the the rapid growth and success of Can Telematics to a flexible company service model with no locked in contracts for Trakopolis customers. “Because they are not locked into a

long-term contract, what we do on a dayto-day basis for them is ensure they are using the system to get a return on investment,� he said. “What’s made us successful is our focus on understanding specific customer requirements and delivering fantastic service. “As soon as the customer signs on with us – working through the imple-

mentation, the training and through the rollout of that year – we work with specific people within their organization that need to be trained on the functionality to make sure they are getting that proper return on investment.�

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B20

PIPELINE NEWS December 2012

Only nine gas wells drilled

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(Daily Oil Bulletin) Operators across Canada rig released 8,163 wells during the ďŹ rst three quarters of 2012, o 11 per cent from 9,178 wells drilled in the January to September period last year, with drilling levels setting records in Manitoba. That province is the only one in the West to see a year-over-year increase in its rig release tally to the end of September. Operators have drilled 463 wells in Manitoba at the threequarter mark, up 34.59 per cent from 344 rig releases in the comparable period a year ago. There was a bigger percentage increase in

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total meterage, however, which climbed about 38 per cent to 861,164 metres from 622,769 metres a year ago. To the end of September, the biggest percentage decline in yearover-year drilling has been recorded by British Columbia, where 347 wells were rig released compared to 474 a year ago (o 26.79 per cent). Operators have also drilled fewer metres in the gas-prone province: 1.33 million metres this year compared to 1.68 million metres at the three-quarter mark of 2011. Across Canada, of those wells with a reporting status, only 12 per cent of the rig released wells have gas as an objective. Close to 79 per cent of wells with a status are listed as oil or bitumen wells — up from 68.62 per cent last year — and the highest percentage ever recorded. In Alberta, 3,682 of the wells drilled to the three-quarter mark of the year had oil or bitumen as an objective — down from 3,744 to the end of September 2011. Wells targeting natural gas or CBM declined to 813 from 1,507 at the three-quarter mark last year. The same pattern held true in Saskatchewan, where 2,218 wells were rig released in the January to September period with oil as an objective (compared to 2,350 last year), and only nine gas wells were drilled, down from 32 a year ago.

The total number of wells rig released in Alberta declined 13.56 per cent to 5,022 wells versus 5,810 after last year’s ďŹ rst nine months. Total metres drilled declined slightly to 10.36 million metres from 10.37 million metres a year ago. Operators in Saskatchewan drilled 2,314 wells in the January to September period of 2012, o eight per cent from 2,514 wells rig released a year ago, while meterage has decreased to 3.7 million metres from 3.85 million metres in 2011. In comparing Alberta and Saskatchewan rig releases, the former’s overall count for the nine-month period included 163 outpost wells and a total of 453 exploratory wells. In Saskatchewan, 329 exploratory wells were rig released, including 242 outpost wells. In the third quarter, only two PSAC zones recorded year-over-year increases in rig releases. Northeastern Alberta saw 405 wells drilled compared to 301 a year ago, while Manitoba recorded 220 rig releases versus 146 a year ago. East Central Alberta was the busiest PSAC zone, with 540 wells drilled in the July to September period. In September, operators rig released 1,150 wells across Canada compared to 1,374 in the year-prior period (o 16 per cent), as all four western provinces recorded decreases in drilling.

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PIPELINE NEWS December 2012

B21

ARC sets $830 million capital budget for 2013 (Daily Oil Bulletin) Calgary – Oil and liquidsrich natural gas will be the focus of ARC Resources Ltd.’s record $830 million capital budget for 2013, including development and infrastructure spending that will set the stage for signiďŹ cant production growth in 2014, said the company. ARC’s board of directors also has announced that Myron Stadnyk, currently president and chief operating oďŹƒcer, will replace John Dielwart, chief executive oďŹƒcer, who is to retire Jan. 1, 2013. Stadnyk, who has been COO since 2005, will become president, CEO and a director at Jan. 1, 2013. Dielwart, who will remain on the board of directors, will stay on as an adviser through to the annual general meeting in May to assist his successor with the transition. Spending, which will be up 38 per cent from this year’s $600 million capital program, will be directed at opportunities at Tower in British Columbia, Ante Creek and Pembina in Alberta, Goodlands in Manitoba and various oil properties in southeast Saskatchewan. A total of $751 million, 91 per cent of the budget, will be spent on oil and liquids drilling and infrastructure. Plans call for the drilling of 178 (160 net) operated wells with 153 wells targeting oil, 16 wells focused on liquids-rich natural gas and nine wells targeting dry gas. On its non-operated properties, ARC anticipates that 103 (10 net) non-operated wells will be drilled by partners with its share of expenditures approximately $56 million, dominated by oil drilling activity in the Pembina and House Mountain areas of Alberta and at the Weyburn property in Saskatchewan.

Of the total budget, $563 million has been allocated for development, $162 million for facilities, $35 million for maintenance, $27 million for enhanced oil recovery and $13 for optimization. Spending for exploration and seismic will account for $11 million, down from an estimated $52 million this year. Consistent with guidance following the $160 million reduction in its 2012 capital program announced earlier this year, ARC expects modest annual average production growth of three per cent year-over-year to approximately 95,000 boepd in 2013 (60 per cent natural gas) with a ďŹ ve per cent growth in oil and liquids production. The growth will accelerate throughout the year with 2013 exit volumes targeted at 100,000 boepd.

ARC expects 2014 annual average production to be in excess of 110,000 boepd, representing greater than 15 per cent production growth relative to 2013. ARC plans to spend $73 million in southeast Saskatchewan and Manitoba to drill 51 gross operated oil wells. The areas will include Goodlands, Oungre, Lougheed, Skinner Lake, Browning, North Weyburn, Queensdale and Parkman. Full-year average oil production is expected to grow by approximately eight per cent to 12,500 boe per day in 2013. A considerable portion of the activity in this area will occur at Goodlands, where ARC plans to drill 22 horizontal oil wells with production increasing 20 per cent over this year to an average of 2,700 boepd.

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PIPELINE NEWS December 2012

Three thumbs-up for provincial economy Regina – Except for snow on the ground in some parts of Saskatchewan, the province couldn’t have asked for a better start to November with the release of three positive economic reports. The good tidings began with news from Statistics Canada that Saskatchewan is coming off another record month in October for labour force numbers, employment and full-time employment. Employment for October 2012 was 541,600, the highest on record for the month with 12,500 more jobs than last October for the 11th month of year-over-year increases. “Saskatchewan has been fortunate to have

undergone significant growth on both an economic and employment front,” said Economy Minister Bill Boyd. “It has improved the job opportunities available for people in our province, and makes us an attractive destination for those who are looking for new employment options from beyond our borders.” The seasonally adjusted unemployment rate in Saskatchewan was 4.7 per cent in October, the second lowest in Canada, and below the national unemployment rate of 7.4 per cent. Full-time employment hit a record of 452,800 for October, an increase of 16,100 from a year ago.

The next batch of good news also delivered at the start of the month by Statistics Canada, trumpeted a 79.1 per cent increase in September residential building permits compared to a year earlier. Overall, building permits in the province improved by 39 per cent, the third highest increase among the provinces. “Saskatchewan’s construction industry is extremely active right now,” said Boyd. “On the residential front that demand is a combination of our increasing population and a strong economy that’s contributing to an increase of new homes.” ɸ Page B23

PIPELINE NEWS December 2012

B23

Saskatchewan residenĆ&#x;al building permits in September were up 79.1 per cent compared to September 2011 as the economy conĆ&#x;nues to grow and aĆŠract new workers. The latest numbers were released by StaĆ&#x;sĆ&#x;cs Canada at the beginning of November. File photo

Éş Page B22 Regina’s building permits jumped a whopping 225 per cent on a year-over-year basis, the highest increase among major Canadian cities. Saskatoon was also up by 19.1 per cent. “The level of construction has a huge impact on our overall economic progress,â€? Boyd said. Boyd noted that report is deďŹ nitely a good indicator that the economy is moving forward, creating jobs and business opportunities in every corner of the province. The third batch of positive news delivered in November is all about the 1,014,363 visits to the province’s Sask.ca website by jobseekers in October. That number is up by 29.53 per cent from last October. “Saskjobs.ca is helping Saskatchewan employers ďŹ ll much-needed positions in 309 communities across the province,â€? said Boyd. “Employers are looking for workers in a wide range of occupations to ďŹ ll mostly full-time positions.â€? There were 16,331 jobs posted in October 2012, a 12.28 per cent increase from October 2011. Mobile device visits went from 54,273 in October 2011 to 213,122 in October 2012. On a monthly basis, postings increased by 6.58 per cent between September 2012 and October 2012. Visits to the website from Quebec job-seekers increased by 53.28 per cent over this same period. The increase in Quebec can be attributed to an employer-led recruitment mission to promote the province at the Montreal Job Fair. “Our economy is one of the best in Canada right now,â€? Boyd said. “It allows us to attract workers from other provinces and beyond who are looking for new opportunities and are choosing Saskatchewan as a destination of choice.â€?

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PIPELINE NEWS December 2012

The Kerrobert THAI heavy oil project site includes this three stage treater with oil and water storage tanks in the background. File photo

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Petrobank, PetroBakken shufà e deck Calgary – Petrobank Energy and Resources Ltd. and its 57 per cent owned subsidiary PetroBakken Energy Ltd. are being reorganized into two independent companies to take

eect Dec. 31, 2012. “The reorganization is consistent with our long-held corporate goal of enhancing shareholder value by creating strong, focused independent companies,â€? said a company spokesperson on Oct. 29 A new Alberta corporation, New Petrobank, will be formed to acquire existing assets and liabilities of Petrobank including heavy oil assets as well as toe to heal air injection or THAI technology. New Petrobank will not acquire Petrobank’s ownership interest in PetroBakken shares. Existing shareholders of Petrobank will receive one share of

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New Petrobank for each Petrobank share held. The 2013 business plan for New Petrobank will focus on pursuing the commercializing of its THAI project near Kerrobert. “We expect New Petrobank to enter 2013 with extensive ďŹ nancial resources, a focused portfolio of heavy oil assets and a multi-year business plan to capture the signiďŹ cant value potential of the THAI technologies and drive long-term shareholder value,â€? said the company in a release. New Petrobank also plans to commence cold production at Dawson (Peace River area) in 2013 to condition the reservoir for a THAI demonstration project. Planning will also continue in 2013 for as many as three new THAI projects on existing lands along the Kerrobert trend while

exploiting cold production opportunities on existing lands. New Petrobank plans to add more prospective resources to their land inventory and enhance their intellectual property portfolio. During 2012, the company purchased additional lands on the Kerrobert channel trend and currently owns approximately 25 sections of land in Saskatchewan. They will also strive to pursue future technology licensing opportunities through Archon (which owns THAI technology). Production from the Kerrobert project averaged 305 barrels per day of upgraded THAI oil per day in the third quarter of 2012, an increase from 236 barrels per day in the previous quarter. ɸ Page B25

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PIPELINE NEWS December 2012 Éş Page B24 “We have focused on increasing air injection and continue to target much higher injection and production rates in the near future,â€? said the company in its third quarter report. “At Dawson (Peace River area), we have commenced cold oil production at the ďŹ rst of the two horizontal THAI production wells. “We expect to initiate cold production at the second well before the end of 2012. “These wells are expected to produce for a period of time to pre-condition the reservoir for start-up of the THAI demonstration project.â€? Petrobank has reactivated eight wells in the Kerrobert trend lands for cold production. All of these wells are in the early stages of clean-up and production. “We expect to drill four stratigraphic wells in Q4 2012 to better deďŹ ne our resources in the Luse-

land area,â€? said the report. “We expect to complete these four wells for cold production in 2013 as part of our plan to opportunistically exploit the primary production potential of our assets.â€? In other news, PetroBakken’s third quarter results released on Nov. 12, noted that production averaged 38,503 barrels of oil equivalent per day. Production in the quarter was relatively at compared to the third quarter of 2011, due primarily to the disposition of producing assets in the ďŹ rst half of 2012 and a delayed start to the second half 2012 capital program. PetroBakken’s nine month production averaged 41,303 boepd, a seven per cent increase over the same period in 2011. Capital expenditures before dispositions totaled $292.7 million in the third quarter with PetroBakken drilling 82 net wells.

Bison Transport's truck Ă eet Bison Transport has signed an agreement with Shell Canada Products to run 15 LNG tractors in Alberta. Bison's ďŹ ve-year fuels supply agreement marks the ďŹ rst step in launching Shell's LNG refuelling infrastructure in the province. This agreement is the ďŹ rst of its kind in Canada, the companies said, as Bison will obtain LNG from Shell Flying J publicly accessible LNG fuelling facilities in Calgary, Edmonton and Red Deer, which are expected to open in early 2013. It also highlights LNG's potential as a transport fuel option. Under speciďŹ c conditions, the use of LNG in heavy duty applications has the potential to deliver a 20 per cent reduction in greenhouse gas emissions. “We are very pleased to be working with Shell on this leading-edge initiative that stands to transform the commercial freight and fuel industries in North America,â€? said Trevor FridďŹ nnson, Bison's vice-president of western operations. “Proving that this alternative fuel source can be economically and practically viable is our objective, aligning perfectly with our company values.â€? Shell believes its LNG refuelling infrastructure will support an increasing number of commercial eets with LNG fuel options. The company is

constructing a natural gas liquefaction plant at its Jumping Pound facility, west of Calgary, to supply this growing market. “LNG can be a cost-eective fuel from an abundant resource of natural gas and we believe it can help our customers build competitive advantage,â€? said Lorraine Mitchelmore, Shell Canada Limited Country Chair. “The opportunity to work with one of Canada's leading eets marks an exciting milestone for Shell.â€? Bison will start receiving new Peterbilt tractors featuring the innovative Westport HD natural gas engines in November and the entire LNG heavy duty eet will be operational by January 2013.

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PIPELINE NEWS December 2012

Allstar identiÀes new drill locations Saskatoon – The fourth quarter of 2012 could be another productive period for Allstar Energy Ltd. with drilling in progress or pending at its Viking, Red Pheasant

and Riverside properties. Allstar Energy, a wholly-owned subsidiary of 49 North Resources Inc. based in Saskatoon, provided a forward looking operational update at

its three exploration and development properties on Oct. 17. The snapshot was taken with Allstar’s ďŹ eld-estimated total gross production at ap-

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proximately 550 barrels of oil equivalent per day (net approximately 400 boepd) weighted 70 per cent oil 30 per cent gas. At its Kindersley Viking oil property Allstar successfully completed a three well (net one) horizontal drilling program with two of the wells ow lined and tied into the 100 per cent owned battery. The company reported the two wells

were on production for approximately eight weeks and were in line with typical Viking expectations. Allstar also drilled a step out well (delayed development well) on a section that had no previous drill holes. The operational update noted the well had not yet been tied in but was free owing to a tank. The initial production data on this well

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exceeded management’s expectations for the section. The wells were drilled into the Viking formation using the same monobore technology that has been deployed on all of the previous 17 horizontals (net 14.7) Allstar has drilled at Kindersley. At Red Pheasant, Allstar drilled two vertical wells to test seismic data acquired earlier in the year. The company noted they would complete a review from that program by the end of October. At Riverside, Allstar completed ďŹ eld acquisition of a 3D seismic program announced in September and they expected to wrap up ďŹ nal interpreted results by the end of October. The company plans to initiate a new drill program on the Riverside lands based on the interpreted seismic. In addition to the recently shot seismic program, Allstar has acquired an additional 2.6 square kilometres of 3D seismic that surrounds one of the recompleted wells. The company has identiďŹ ed up to ďŹ ve development well locations from this data and expects to begin drilling in the current fourth quarter.

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PIPELINE NEWS December 2012

B27

Total Àrst to rent Speed Plate frac tanks Winnipeg – Westeel, a Winnipeg-based manufacturer of steel storage products, got off to a quick start with the marketing of its new frac tank installation system which allows most tanks to be built in one day. The first order for Westeel’s proprietary Speed Plate frac tank system went to Total Oilfield Rentals LP, a subsidiary of Calgary-based Total Energy Services Inc. on Oct. 2, less than two weeks after the product launch on Sept. 24. The Westeel Speed Plate tanks were introduced to the market on Oct. 15 at Total Oilfield Rentals’ new location in Minot, N.D., that opened in July. “Our field trials confirm that the speed at which the new system can be deployed will be a real benefit to our customer base and the rental rates at which we can offer this system will be attractive relative to other systems in the market,” said Russ Strilchuk, vice-president sales and marketing for Total. “We see this product as a valuable complement to our broad product offering in the marketplace both in the northwest United States and Western Canada.” The frac tank will be available through Westeel’s distributor with Total having the exclusive right to rent the Speed Plate frac tank system to the oil and gas industry in Western Canada, North Dakota and certain other states. “This product provides tremendous opportunities for our business in these locations,” said

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Westeel president and general manager André Granger. “We are excited to be able to offer this convenient new system on a rental basis throughout the oil and gas industry in the northwestern United States and Western Canada through our distributor’s exclusive arrangement with Total Oilfield Rentals. The frac tank system ordered by Total incorporates “Speed Plate” technology, that enables frac site operators to get their sites up and running in record time, without the use of cranes for a safer installation. “Increasing the speed of frac tank installation has been our focus,” said Granger. “This new system provides a fast, safe, costeffective solution to water management at drilling sites.” The reusable and movable frac tanks are engineered with corrugated steel panels, and most sizes can be delivered to site on a single truckload, which includes the tank and liner. The new patent-pending Speed Plate uses fewer bolts per panel seam, which enables the installation crew to build the system quicker, while still maintaining its structural integrity. Total Oilfield Rentals offers a full slate of oilfield rental products as well as transportation services through its network of 20 branches in western Canada and its new U.S. branch in Minot. Total Energy Services Inc. is a growth oriented

energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression and process equipment.

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PIPELINE NEWS December 2012

Alberta to create new energy regulator Plans to cover land owners, environment, and the industry Calgary – The Alberta government expects to have one energy regulator in place to cover landowners, industry and the environment by June 2013. The government has introduced Bill 2, the Responsible Energy Act, that creates a single provincial regulator for upstream energy resource activities involving oil, gas, oilsands and coal. Under the proposed legislation, the new regulator will be a uniďŹ ed one-window approach that makes it easier to navigate the system. It will also be responsible for energy resource developments from initial application to reclamation. “With this legislation, we are laying the foundation for the next 50 years of responsible energy development in the province,â€? said Energy Minister Ken Hughes in a news release on Oct. 24.

“This new system will be more eective and efďŹ cient for industry and landowners and it will build on Alberta’s long-standing commitment to the environment. “The result will be a beneďŹ t to not only Alberta’s economy but to Canada’s economy. It will help us maintain the social licence to operate.â€? The proposed legislation includes higher ďŹ nes for individuals and companies who break the law. It will also allow landowners to volunteer to register for private-surface agreements, which can then be enforced. The need for a single regulator was identiďŹ ed by the Regulatory Enhancement Task Force two years ago. A comprehensive oil and gas regulatory review was carried out as well. That work included numerous consultations with industry, landowners, environmental groups and First Nations, and an online survey inviting Albertans’ feedback. The government adopted all six recommendations of the task force with its Bill 2 legislation. Under the proposed legislation, the single regulator will assume the regulatory functions of the Energy Resources Conservation Board and Alberta Environment and Sustainable Resource Development, with respect to oil, gas, oilsands and coal development. The arm’s-length agency will be governed by a

board of directors, with a chief executive oďŹƒcer at the helm. It is expected to be operational by June 2013. “As we grow, we must continue to ďŹ nd the right balance between environmental management and resource development to ensure Alberta and Canada remain global leaders on both fronts,â€? said Environment and Sustainable Resource Development Minister Diana McQueen. “Through this regulator, we are taking a new approach to how we develop our energy resource while maintaining our strong environmental outcomes.â€? The legislation also gives the regulator the authority to administer the Public Lands Act, the Energy Protection Enhancement Act and the Water Act, with regards to energy development. In addition to the single regulator, the government of Alberta is making improvements to how it sets energy-related policy. Policy direction for the province will continue to be set by the government of Alberta, through a newly-created Policy Management OďŹƒce which will be responsible for providing clear policy guidance to the new regulator. The province is also completing and implementing regional plans. In August, the province released its ďŹ rst land-use plan for the Lower Athabasca Region. The province announced another component of its integrated resource system – an environmental monitoring system on Oct. 17.

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Jason Treichel, a sales rep with Bruin Instruments, a Canadian owned manufacturer of chemical injecƟon pumps based in Edmonton, leans on a 130-waƩ solar operated BR1100 chemical injector pump at the Lloydminster Heavy Oil Show in September. The solar opƟon is ideal for remote northern well sites where electricity isn’t available.

Solar injector pump a bright idea Lloydminster – Sunny days are ahead for sales of a solar operated chemical injection pumps at Bruin Instruments Corp. in Edmonton. The Canadian owned and operated manufacturer of chemical injection pumps and pumping equipment generated a lot of sales leads with its solar powered BR1100 chemical injector pump exhibit at the Lloydminster Heavy Oil Show in September. “We do very well with solar and electric pumps in this area,” said sales representative Jason Treichel at the Bruin booth. “We are bringing the solar along for everyone to see what it’s all about and hopefully, get some clientele for that as well. ɸ Page B30

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PIPELINE NEWS December 2012

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It’s Been Our Pleasure Serving You! Happy holidays and many thanks for your kind patronage this past year.

ɺ Page B29

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“It’s a solar operated chemical injection pump. You just put it on a well site, and you can inject methanol, chemicals and corrosion inhibitors. Anything you want inside a well, this thing can handle.” The BGR1100 is a rotary cam driven positive displacement plunger type pump that utilizes a rotary electric source. The BR1100 fitted with a DC motor can be powered with a set of batteries charged by solar panels such as the 130-watt panel displayed in Lloydminster. The alternative to solar is electric, but electricity is not always available at remote well sites and in northern regions of Western Canada. “It’s the new age, I guess, we’re going for now. Everyone wants to save money with the gas and stuff like that. The next step-up is solar,” said Treichel. “In the north country, one 130-watt panel and two batteries can usually stand up for quite a long time. “In the fall and the summer these things are perfect. It’s the harsh Canadian winters that are hard on the batteries. You may have to switch the batteries a little bit more or use a heater on the bat-

WHERE ENERGY MEETS SAFETY

teries. “If it’s -40 Celsius that’s when the batteries kind of freeze up. If you are willing to spend the money, solar is the way to go.” The pump can be operated with an electronic control that turns the pump on for a specified period of time. “That way it’s a little bit easier on the batteries and the solar panel, so it’s more long lasting,” said Treichel. The pump can handle a wide variety of output volumes from less than one litre to 378 litres (100 gallons) per day and discharge pressures up to 3,000 pounds per square inch. Bruin Instruments also manufactures a variety of pneumatic, electric, natural gas and beam driven pumps for the global oil and gas market including an environmental gas recovery pump. “Here in the Lloydminster area, electric is very popular because the gas is usually low pressure around here,” said Treichel. “There’s a lot of gas around, so they usually want to save the gas and go with the electric.” Bruin Instruments also provides sales, parts, service and repairs and exchange services for its Bruin Pumps and a wide range of other pumps they carry from brand name manufactures.

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PIPELINE NEWS December 2012

B31

Box 312 Carlyle, SK S0C 0R0 Office: 306.453.2506 Fax: 306.453.2508

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Setting new standards for performance Since it was established in late 2008, CanElson Drilling Inc. has grown quickly to become one of Canada’s premier drilling contractors. In addition to building its own drilling rigs, the company is expanding its Àeet of drilling and service rigs through acquisition. CanElson now operates a Àeet of 40 rigs. With operations in Western Canada, West Texas, North Dakota and Mexico, CanElson Drilling Inc. is setting new standards for rig utilization. With right-sized, purpose-built rigs built for horizontal and resource play drilling and experienced, well trained crews, the company is achieving new records for cost-effective, ef¿cient drilling operations.

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Opportunities On Our Rigs CanElson Drilling Inc. is currently looking for hard working individuals that are looking for challenging and rewarding work on top-of-the-line equipment in Saskatchewan. We provide competitive wages and stock options for Drillers and Rig Managers. Interested individuals can drop off resumes in person at our Carlyle Office or fax to 306-453-2508.

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PIPELINE NEWS December 2012

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PIPELINE NEWS

SECTION C December 2012

CAODC drills MPs, sees stable Q4 By Geoff Lee Calgary – The Canadian Association of Oilwell Drilling Contractors wants the federal government to know the rig industry benefits all of Canada economically, not just the western provinces. Members of CAODC, led by its president Mark Scholz, took their message before the federal Standing Committee on Finance meeting in Ottawa on Oct. 24. “Our purpose was education and reaching out to our federal policy makers. CAODC understands the influence that the federal government can have on our industry,” said Scholz. “We were educating our members of Parliament from across the country on some of the unique challenges in the drilling and service rig business and ways they can help improve our industry going forward. “There is a growing myth in our country that the oil and gas industry only benefits western Canadians, and that’s just not the case.” Service rig and drilling rigs workers are recruited from all parts of the country including Newfoundland, Quebec and Ontario for rig activity from Manitoba to British Columbia. “We have rigs that are built and are composed of a number of individuals right across the country who don’t make Western Canada their home,” said Scholz. “Their home could be in Eastern Canada, in Atlantic Canada, and possibly the west coast of British Columbia. “We attract our manpower from right across the country, so all Canadians are really benefiting from this industry. That’s what we are trying to communicate.” In a news release on Oct. 24, COADC said one active drilling rig draws support from 135 jobs with 75 of those jobs in oil and gas occupations and 40 in hospitality services such as hotels, restaurants and gas stations. Scholz said the economic impact of the rig industry is overlooked especially in regions

Mark Scholz, president of CAODC, took part in a public relaƟons mission in OƩawa in October to promote the naƟonal economic beneĮts of the rig industry and to seek help in hiring new workers from hard hit parts of Eastern Canada. Photo submiƩed

like Ontario and Atlantic Canada that continue to suffer from high unemployment as well as gas prices at the pumps. “There’s a tremendous amount of manufacturing activity and indirect economic spinoff that occurs in parts all across the country,” said Scholz. “There’s a lot of manufacturing that’s done in Ontario for the oilsands. There are some companies that have said ‘look we wouldn’t be around if it wasn’t for the oilsands." While in Ottawa, CAODC members also took time to highlight the skill set of rig workers and seek help to recruit more workers from Eastern Canada to meet the labour shortage. “We still have a number of people from those areas coming to Western Canada and working on the rigs. You just have to look at the economic conditions in Ontario right now,” said Scholz. ɸ Page C2

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PIPELINE NEWS December 2012

Little hope for increased gas drilling ɺ Page C1 “Southern Ontario is in really bad shape, particularly on the manufacturing front with auto workers. “We would love to continue to see successful recruitment for those folks who need jobs because we have the jobs here.” Rig technicians are a Red Seal trade with apprenticeship training offered in British Columbia, Alberta, Saskatchewan and the Northwest Territories for the past nine years.

More that 9,500 overall positions in the oil and gas industry, including rig crews, need to be filled by 2015, according to a market outlook published in May 2012 by the Petroleum Human Resources Council. Collaboration among industry, government and labour supply stakeholders is cited by that report as a good way to meet the demand for labour due to age-related attrition as baby boomers retire. “These labour challenges aren’t

Box 1443 3705-52 Street Close Lloydminster SK, S9V 1K4

going to be going away in the short term, or frankly, also the long term. I think this a lull in labour supply that we are going to be with for a long time,” said Scholz. “That’s partly the reason I was in Ottawa speaking in front of the federal finance committee and talking about ways that we can incentivize Canadian workers in Ontario and parts of Quebec to look for work in Western Canada. “We are in a very unique place in Western Canada. If we don’t address this, we can have an unsustainable escalation in wages and inflation in Western Canada that is not going to fare well with our economic health.” CAODC released their 2013 drilling forecast on Nov. 13 and is sticking with its fourth quarter forecast for 2012 for a utilization rate of 55 per cent and a year-end average rate of 49 per cent. For the week of Oct. 23, the utilization rate stood at 42 per cent in Western Canada. “What I am hearing for quarter four is I think there will be stable activity. I don’t think we are going to see any major thrusts in activity,” said Scholz. “This summer, we were very concerned about some of the announcements of clawbacks of capital expenditures. It didn’t materialize to the extent that we were looking at in terms of a worst case scenario. “I think we are going to have a stable quarter four.” In 2011, the petroleum industry’s workforce expanded significantly due to capital spending that far exceeded industry forecasts. There were over 186,000 oil and gas industry jobs in 2011, an increase of one per cent over 2010 and a five per cent increase over 2009. CAODC sees little hope for increased gas drilling in Saskatchewan unless natural gas prices rebound. “At $3 to $3.50 – at those numbers they are just not economic. We have seen some analysts have been on the record indicating plus $4. That certainly will help.” The bigger worry for the rig industry is the prospective threat of low

crude oil and gas prices at the same time with crude oil prices hovering around $84 a barrel in late October. “We are in a unique position right now. Before we always had more of a balance between drilling for crude oil and drilling for natural gas,” said Scholz. “One of the risks we have is if oil continues to see this much volatility – if it gets any lower than where it is now and we see operators clawing back on crude oil drilling, we don’t really have gas to fall back on. “That is a tremendous concern, so we are really – at this point from a drilling community – we are putting all of our eggs in one basket. “We hope to see that change. We would love to see gas back up to $5 or $6. I don’t think it’s going to happen in 2013 and I don’t think it’s going to happen in 2014 either.” Demand for natural gas could be helped with a prolonged bout of cold weather across populated areas of the United States. “If we can get a few cold snaps down there and get people turning on their heaters, we’d love that,” said Scholz on a cold day in Calgary. Scholz said the construction of pipelines such as the proposed Keystone XL and Northern Gateway projects originating from Alberta may not spike the demand for drilling, but would be good for the industry and Canada economically. “I don’t know if you’d see an incentive in the short term, but I won’t argue if we don’t see those major infrastructure projects go ahead, it will certainly be a deterrent for future investment in the long term,” said Scholz. “You have to keep in mind 98 per cent of our oil and even on the gas side is being sold to the United States and is being sold at a discount. “For a country that wants to be an energy super power in the next five to 10 years, we’ve got to diversify our markets. “If we don’t do that, it’s going to hurt investment. It’s going to hurt drilling activity and it’s not going to do very well for the overall Canadian economy.”

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PIPELINE NEWS December 2012

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Grit quickly “cold starts” in North Battleford

Grit Industries’ manufacturing centre features a new roboƟc MIG welder for welding parts such as a Įretube throat.

By Geoff Lee Lloydminster – Grit Industries Inc. is off to a flying start at its new manufacturing base in North Battleford with a backlog of orders to fill for their flagship cold weather technology products. Demand for the products means they already have orders to take them well into the third quarter of 2013. The Lloydminsterbased company expects to complete the relocation of its core manufacturing divisions to its new 92,000 sq.-ft. complex on 12 acres of land in North Battleford by December. “The buildings in Lloydminster have all been sold. We have simply outgrown our facilities here and we needed to move forward in

order to be competitive,” said president Wayne King on Nov. 2. “In order to keep up with the demand for our products, we needed to relocate.” Grit Industries’ decision to shift manufacturing to North Battleford includes the relocation of sales and general administrative staff to a new two-storey head office located near the Lloydminster airport. “We will be basing our operations in Lloydminster for the A-Fire Burner Systems group as well as the secondary containment product line,” said King, who expects the staff transfer to be complete by midDecember. The Lloydminster office will also house the

company’s research and development department. The new site includes a welding shop that will make parts for Grit Industries’ new heat exchangers. King said the company in the future will focus on growing its cold weather technology division and sales of its natural gas line heaters and indirect fluid heaters from the North Battleford facility. Grit Industries has sold more than 1,400 of its gas line heaters in Canada and the U.S. and has an energy efficient and low NOx prototype unit currently being evaluated in England. The company has also sold and installed more than 60 of its indirect fluid heaters for heating light oil tanks for clients in Estevan, Elrose and Kindersley. Grit Industries recently obtained approval to market its fluid heaters to industry in North Dakota for the purpose of heating light oil in tanks and it expects to soon receive code approval to branch into the Alberta and Manitoba markets. The company hired a consultant to assist with the logistics of the relocation and the layout of the new building in North Battleford that contains 5 overhead cranes up to 20 ton capacity and 8 jib cranes to serve welding stations. The building is equipped with the latest cutting, bending and metal forming machines for plasma cutting,

water jet cutting and robotic welding. The company has hired more than 60 employees to ramp up manufacturing of their A-Fire burner systems, cold weather technology products, G-55 containment systems and related fabrication products in North Battleford. When it came to

hiring, it helped that Grit Industries also had a manufacturing shop in the McMillan Industrial Park for the past five years. “When we put a request in for welders in Lloydminster, we get very poor response,” said King. “When we put an ad in the papers for welders in North Battle-

ford, we might get eight or 10 responses and we will hire a number of them.” King said the availability of labour in North Battleford compared with Lloydminster weighed heavily in the decision to move their core manufacturing activities to Saskatchewan. ɸ Page C4

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PIPELINE NEWS December 2012

High quality and low cost desired ɺ Page C3 “The industry doesn’t concern itself with where the product is manufactured. What they want is a good high quality product at a low cost.” The cold weather line of natural gas heaters has caught on with industry with their improved thermal and combustion efficiencies and fuel savings. The product is based on heat-driven loop technology that King began to develop in 1999 to heat heavy oil tanks using their own vented meth-

Dean Iverson puts the Įnishing touches to a Ňame arrestor.

ane instead of a firetube. “When we discovered the heating of natural gas was very successful using that same technology, it was one of those ‘Eureka moments’ in product development,” said King. “In 2003, we partnered with SaskEnergy and we developed the natural gas heating systems that are around North America today. “It’s simple, it’s very functional, it’s safe and it’s code compliant. That’s where we are today.” The indirect fluid heater is designed to heat multi-tank or vessel applications with significant cost savings in energy consumption and efficiencies. “A firetube maybe runs at 45 to 50 per cent efficiency. This new device that we have runs at 80 per cent thermal efficiency,” said King. “A firetube has a high flux rate, meaning the skin temperature is about 1,200 F. The skin temperature on this device is 200 F. “So therefore, what takes place with a firetube is that because of the high temperature, you are actually flashing the water portion of the crude oil to steam which leaves a salt deposit on the firetube. “Our technology, because it has a lower skin temperature, it does not create that salt deposit and the heat exchanger remains clean and unobstructed for that heat transfer.” The indirect fluid heaters can easily be retrofitted to existing firetube throats and have no moving parts, and do not require electricity to operate. When used to heat light oil tanks, the technology upgrades oil to pipeline specifications safely with indirect steam heating technology. “The temperature of the heat exchanger is much lower than the flash point of crude oil. It heats flammable liquids safely, using indirect steam,” said King. Grit got the go ahead on Nov. 2 to begin field testing of one of its most advanced indirect heaters for natural gas distribution in England for National Grid, an international electrical and gas supplier to Great Britain and Northeast United States. “It’s being evaluated. Potentially, it will be the worldleading technology for the heating of natural gas,” said King. ɸ Page C5

PIPELINE NEWS December 2012

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Roll foremen MaƩ Chasse, leŌ, and Leo Romanovych prepare to move a roll of metal used for a variety of metal forming in the roll forming secƟon of Grit Industries’ new manufacturing facility in North BaƩleford.

Grit Industries’ 92,000 sq.-Ō. manufacturing facility in North BaƩleford is equipped with 5 overhead cranes and eight jib cranes for heavy liŌing.

ɺ Page C4 “The technology we are developing for England, will at some point in time, be introduced in North America. We are developing the futuristic model into Europe to be proven.” The units received CE marking for European safety standards and they exceed stringent emission standards with only seven parts per million of NOx emissions. King said National Grid has about 3,500 natural gas distribution points in the U.K. that need to be upgraded to the new technology. “We are certainly hopeful that our technology is chosen,” he said. The European natural gas line heater being tested produces 1.5 million BTUs of heat per hour. The North Battleford plant manufactures units from 70,000 to 770,000 BTUs but larger ones are in the works. “Currently, we are developing a three million and a five million BTU unit and combinations of those units will put us in the multiples of 5, 10 and 20 million BTUs,” said King. SaskEnergy has also saw a need for the technology for the pre-heating of natural gas at two of its gas turbine stations in Saskatchewan.

“The industry has shown that natural gas has better combustion at a certain temperature. They pre-heat the gas before the gas goes into the gas fired turbine. Our technology works well there,” said King. Other potential markets for cold weather technology are U.S. hospitals and utilities that are retrofitting oil burning furnaces to natural gas furnaces using high pressure gas captured from shale gas fracking and trucked to location. “When you have high pressure gas and you are going from 2,000 psi to two ounces of pressure to burn in the furnace, you have to have a heating system,” said King. Due to the Joule-Thompson effect, gas begins to freeze when it loses pressure. Closer to home, SaskEnergy will become an even bigger customer for Grit Industries’ cold weather technology as the Crown corporation replaces its conventional bath heaters with natural gas line heating technology. “If we can reduce the fuel consumption by 50 per cent, there may be millions of dollars in savings annually ... let alone the greenhouse emissions,” said King. “SaskEnergy must be commended for their forward thinking and planning.”

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PIPELINE NEWS December 2012

Anderson speaks of injuries n the workplace „ Geo Lee Innisfree – Cowboy up and keep on keeping on. That’s the code that 38 year-old Curtis Anderson lives by – one day at a time at his cattle farm in Minburn, Alberta. Anderson is a cowboy poet, singer, song writer and motivational speaker with a powerful message about the need to protect yourself from injury at work and at play. The message is prefaced by his personal story of courage and faith on the path to recovery from a serious brain injury when stopped time for him on June 26, 2002. His compelling story is available on his website at www.caccanada.com or in a printed handout. “On that day, I was competing in the bull riding at the Ponoka Stampede,â€? he said. “While riding, I lost my balance and was struck in the head twice by the bull’s head. I was rushed to the University of Alberta Hospital, where I would spend three weeks in a drug-induced coma. “From there I was sent to Glenrose Hospital where I started all over again.â€? Those are the opening lines to his a 20-minute safety presentation package that he’s delivered recently to oil companies such as Command Energy, Leading Manufacturing Group and Red Planet Trucking. “Not as many know about head trauma as anything else, but it’s out there and it aects a lot of people,â€? said Anderson. “It’s something that you will know about the rest of your life when you experience it. “Wear your hard hat wherever there is a chance of you having a fall, and don’t take your life for granted. Appreciate what you have today, because tomorrow it might be gone.â€? Anderson’s safety talk covers hard hat safety, custom earplugs, steel toe boots and safety boots and his career on the drilling rigs that ended with his injury. ɸ Page C7

Meet CurĆ&#x;s Anderson, cowboy poet, singer, song writer, caĆŠle farmer and custom oilÄŽeld lease fence builder. Anderson is also a moĆ&#x;vaĆ&#x;onal speaker with a safety message and life story about the importance of protecĆ&#x;ng your head from brain injury. Anderson suÄŤered a brain injury in a rodeo accident and recently got his driver’s licence back. His steering wheel is equipped with a spinner that he grips with his right hand.

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PIPELINE NEWS December 2012 Éş Page C6 “I worked eight winters on the drilling rigs for Akita Drilling, and in the summertime, I had my custom fence business fencing oil leases,â€? said Anderson. “I worked in Fort McMurray, Slave Lake around Bonnyville, and around Duchess and Medicine Hat. I worked lease hand, roughneck and motorman. “It’s 12 hours of hard working and you can see how much you got done at the end of the day.â€? His other brother, Derek, works in the oilďŹ eld for Sweet Wildrose Consulting and his younger brother, Kelly, works for Nexen Energy. Anderson was unable to walk on his own, speak properly, or move his left arm immediately after the injury, but weeks of therapy in dierent hospitals and his “cowboy upâ€? attitude were rewarded with noticeable improvements. “When your back is against the wall, you raise the bar of excellence while believing in yourself, friends, angels and God,â€? he says in his handout. “It’s been 10 years. My body is still getting better and I am able to do more and more things with my left hand. You don’t get better by sitting on a couch.â€? For the last two years, Anderson has been able to hold a barbed wire fence staple with his left hand which has enabled him to resume his custom fence business for oilďŹ eld leases. Anderson is motivated to fully recover by inspiring slogans including the words of his hero John Wayne, who said, “Courage is being scared to death and saddling up anyways.â€? He is proud of the fact that he can lift a 40-pound pail of grain now with his left arm. Two years ago, he got his driver’s licence back on the condition he install a cross-over turn signal switch and a spinner on his steering wheel. “It’s one more step to being independent,â€? he said. Asked if he misses working on rigs, Anderson said this: “I am still involved in the oilďŹ eld – just in a dierent manner. Speaking at safety meetings is just as good as being on the oor when it’s -30 C.â€? Anderson had delivered his safety story at six dierent bull riding events and one rodeo this past summer, and he has spoken at the annual Big Jamboree Bulls for Breakfast event in Camrose for the past three years where he received a standing ovation. Anderson began bull riding at rodeos in 1992 and he won a few events. “The challenge was being better than the bull that day,â€? he said noting that it was a bull named Real Handy that got the best of him in 2002 with those damaging head butts. “About 40 per cent of the riders are wearing helmets now, and you will see more and more of the riders wearing helmets. I wish everyone would wear a helmet,â€? he said.

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Each year on the last Saturday in May, CurĆ&#x;s Anderson’s family holds a Courage Canada trail ride in the Innisfree and Minburn area of Alberta to raise money in support of brain injury survivors and their families. Photo submiĆŠed

“People are more aware of how serious a concussion can be, so hopefully it does bring more awareness and more people start to wear helmets.â€? His hard hat safety talk includes a demo of what happens to your brain with and without the protection of a hard hat. He takes a Styrofoam cup lined with cotton balls, puts an egg in the middle of it and tapes the lid tight. Then he drops the cup on a tin plate that represents your brain protected by a hard hat. The protected egg is perfectly intact. Then he drops the egg by itself to show what happens to your brain without a hard hat. A few years back, Anderson began to write poems for rodeo friends and family in order to communicate his experiences in the oilďŹ eld, rodeo and farm life. “It’s my way to show respect,â€? he said. “I have quite a bit of material to write poetry on.â€? Anderson hopes to have copies of his new book titled, Road to Recovery available by the spring of 2013. “It will have my speech in there and pictures about life before brain injury, poems and pictures of me speaking,â€? he said. The book will also make reference to Courage Canada, a trail ride that his family from nearby Innisfree holds annually to raise money and awareness for brain injuries. “This year we had 101 riders on horseback, 12 teams, and 74 riders in the wagons and 250 people for supper,â€? said Anderson. The 2013 trail riding event will be held on May 25. “This year it started from my place and we raised $19,200,â€? said Anderson. “That money helps brain injury survivors and their families from day one. Ten per cent of that money went to the Lloydminster and Area Brain Injury Society (LABIS).â€? Anderson is well connected to the Minburn area as his great, great uncles Ed and Otto Anderson were the ďŹ rst settlers to set up camp at town in 1904.

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PIPELINE NEWS December 2012

Blue Spark pulse tool boosts recovery Members of the Lloydminster SPE check out the results of a demonstraƟon of Blue Spark’s pulse technology in this 150 gallon test tank. The demos took place in the parking lot of the Best Western Inn following a lunch presentaƟon by business development manager Trent Hunter.

Ryan RiveƩ, leŌ, technical Įeld sales representaƟve for Blue Spark in Lloydminster, helps Trent Hunter, business development manager in Calgary, hold up the business end of this wireline applied sƟmulaƟon pulse tool following a presentaƟon of the technology at the October meeƟng of the Lloydminster Society of Petroleum Engineers.

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By Geoff Lee Lloydminster – Riddle me this: What generates 65,000 horsepower, 10,000 pounds per square inch of initial pressure, travels 1,500 metres per second through a wellbore and can increase heavy oil heavy production by a whopping 30,000 per cent? The answer is a new wireline applied stimulation pulse tool and service provided by Blue Spark Energy based in Calgary, and in Lloydminster via Ryan Rivett, technical field sales representative. Rivett teamed up with business development manager Trent Hunter who led a presentation and outdoor demo of pulse technology for workovers and new completions in cold produced wells during the October luncheon of the Lloydminster Society of Petroleum Engineers. In a nutshell, Blue Spark delivers pulse stimulation to enhance production in oil wells with an electric hydraulic wireline tool. The company has deployed their wireline pulse technology in more than 80 wells around the world in-

cluding 25 vertical CHOPS wells in the Lloydminster area with a 250 per cent average increase in productivity. Productivity gains have ranged from around nine per cent to nearly 30,000 per cent worldwide. “My message is that the technology is proven and that it works,” said Hunter moments before taking to the podium at the Best Western Inn on Oct. 18. “Also, I want to basically educate some of the people on the technique because pressure pulse technologies have been widely applied in the heavy oil market using different techniques, whether it’s a fluid pulse or any type of hydraulic pulse. “What’s really unique about us is how we deploy with the wireline tool and how we can get such extreme pressures.” Generating repeated low energy/ high power hydraulic shock waves mechanically remediates near wellbore damage from perforations, slotted liners and sand screens. ɸ Page C9

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PIPELINE NEWS December 2012

Trent Hunter demonstrated how to use Blue Spark’s wireline applied sĆ&#x;mulaĆ&#x;on pulse technology to clean up damage from perforaĆ&#x;ons, sloĆŠed liners and sand screens in heavy oil wellbores.

we release that in a nanosecond. “In a couple of microseconds, we get a peak pressure of 10,000 psi. Because we really ‘compress time’ it’s a conversion from a kinetic form of energy – electricity we send down the cable – and we convert that into stored potential energy in the capacitors. “Once it’s stored, we release it extremely quickly on a repetitive basis up to 2,000 times. It’s that repetitive nature that gives us the cumulative eect of reducing wellbore damage.â€? Blue Spark adapted the pulse technology from their sister manufacturing group that was applying it for welding purposes. In July 2011, the company began commercial operations of its wireless pulse service for the oil industry. “The two key markets that we have been focusing on to date have been the near wellbore remediation for producing wells, whether that’s new well completions or workovers, or in injector or disposal wells,â€? said Hunter. Blue Spark’s stimulations and lab tests verify that the shock wave acts to increase the permeability of the near wellbore for enhanced oil production. “Some stimulation techniques are used to unplug what is the existing pathway or pore throats of the formation right near the wellbore,â€? said Hunter. “What our technique does is allow the en-

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hancement of the existing permeability and the pore throats, and to create new fractures as well.â€? The Blue Spark wireline pulse service can also be used as pressure or pulse source for seismic applications since the pressure pulse travels up to a kilometre through the formation. The current tool is four inches in diameter and 8.5 metres in length with a 5.5 inch diameter and a 2-3/4 inch slim tool in the advanced stages of development. The four-inch pulse tool is deployed with a wireline truck equipped with a 5/16 inch drum cable. “We simply rig it with the electrical cable that comes with the truck and we put our tool on the end cable and we run it into to the wellbore,â€? explained Hunter. “We log it on depth with the casing collar locator or a gamma ray, and we make sure that we pulse over the top of the open perforations. That whole operation takes a few hours of rig time, then we rig down and we leave.â€? Hunter presented examples of ďŹ ve wells treated with their pulse service in Lloydminster that ranged from a minimum 10 to 20 per cent increase in productivity to the best well that that went from never being able to produce to nearly 10 cubes a day. “Given the beneďŹ t plus the cost that we charge, it is cost-eective,â€? said Hunter.

Éş Page C8 The energy source can be an inverter or a generator from a wireline unit or any type of truck. The wireline pulse service from Blue Spark can also achieve formation breakdown to initiate sand ow in new well completions where traditional CHOPS initiation methods have not been successful. “It’s a high speed high pressure shock wave that we emit from our wireline tool, and it travels outward and intersects the entrance holes of perforations, slotted liners or sand screens,â€? said Hunter. “It causes geo-materials or scales to crack under tensile failure mechanisms. “We create a pulse that travels as a uid wave through the wellbore uids and out into the formation. We initiate that using a spark inside of our tool, very much like lightning.â€? The science or physics behind wireless pulse technology is based on the formula that energy equals power multiplied by time. “We want really high power pulses. We take energy and we send it down a wireline cable,â€? said Hunter. “We store it up in the tool downhole in a bank of capacitors. What is unique about what we do is

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PIPELINE NEWS December 2012

OilÀeld career day a hit at Lakeland By Geoff Lee Lloydminster – There was a lot of mixing and mingling at the Lloydminster Oil and Gas Career Discovery Day at Lakeland College where students met with oil and gas employers and employees to learn about industry careers. More than 750 regional students were invited to the campus on Oct. 23 to hear keynote speakers, take part in career breakout sessions with industry workers, and speak with exhibitors and recruiters regarding career paths. “The main goal is to provide students with opportunities to hear and know about all of the different jobs within the oil and gas industry,” said Cosette Green, business and industry liaison with Alberta Works, an Alberta government services agency that funded the event with industry sponsors. “We are definitely experiencing a labour shortage. We know that in the next 10 years we are going to increase the shortage. “Our students don’t really understand at this point the vastness of the job opportunities – and they can be here in our own back yard.” More than 30 oil and gas businesses and train-

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Carrie Rawlake, stakeholder relaƟons adviser with Canadian Natural Resources, preps Rick Monteith, a lead operator for CNRL in TangleŇags/Onion Lake on what to say to students about his job at the Lloydminster Oil and Gas Career Discovery Day at Lakeland College.

ing and safety organizations took part in the event that included scheduled presentations by employees who spoke about their jobs and how they got started. “The students will be able to pick and choose the sessions that they want to go to – jobs they might want to hear about or jobs that maybe they never even dreamed of were out there,” said Green at the start of the day. “People who are doing the jobs can tell them what they like about their jobs, and what they do on a daily basis – what the environment looks like, what kind of pay they can expect – almost anything they may want to learn about a job.” Presenters covered the nuts and bolts of a variety of careers and positions including engineering, trades, human resources and administration, surveying, heavy equipment operations, drilling and safety. The event was organized by Alberta Works in partnership with Newcap TV and Lakeland College and co-ordinated by Wilson Consulting. ɸ Page C11

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PIPELINE NEWS December 2012

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Bob Ross, manager of Enform Saskatchewan, directs students to some informaĆ&#x;on during the Lloydminster Oil and Gas Career Discovery Day at Lakeland College. More than 750 students were invited to the event to learn about oil and gas careers and career paths.

Éş Page C10 “The event was initiated by the employers,â€? said Green. “As I went around and listened to what their needs were, I constantly heard ‘how do we get people to understand what is available and keep them in the region?’â€? The agenda kicked o with an assembly at the Vic Juba Theatre and a presentation by Calgary-based Rick Davidson, manager of recruitment for Cenovus. “We have a great interest in ensuring young people from Alberta and Saskatchewan clearly understand the options around careers,â€? said Davidson after his speech. “We have huge needs in terms of labour over the next decade and we need as many of these good young people working in our business as possible. “The more that they can learn today, the more beneďŹ cial we will all be in the long run.â€? Cenovus, itself, has a need to recruit new workers to keep pace with the expansion of its thermal oilsands projects at Foster Creek and Christina Lake in Alberta and to meet future growth. The company recently purchased the Alberta and Saskatchewan assets of Oilsands Quest that Davidson said,â€? adds to our existing

portfolio of assets and allows us to continue to grow.â€? Davidson said he jumped at the chance to speak to students about a myriad of careers available to them in the oil and gas industry given the current and looming labour crunch. “I think people in Alberta and Saskatchewan know that the oil and gas business has opportunities, but we are trying to help young people understand all the opportunities that exist and all the needs that we require,â€? said Davidson. “They are signiďŹ cant and they are many, and these opportunities are long-term challenging assignments, and are really career paths and not just jobs to do for a short period of time.â€? Opportunity was also top of mind for keynote speaker Tim McMillan, minister responsible for Energy and Resources, who told Pipeline News that Saskatchewan is the

land of plenty for young people seeking oil and gas careers. “There are great opportunities for them and we’d like to see them pursue those opportunities. We need their help to make our industry successful in the long term,â€? said McMillan. “This is an industry that has been very welcoming of people from across Canada for a long time. We see our professionals doing work around the world in this industry. “You start on a drilling rig in Weyburn one day and you’re in Lloydminster a week later. You may be in Russia three years after that. “It’s one of those industries where, if you are willing to work hard, you will be successful.â€? Bob Ross, manager of Enform Saskatchewan, also took to the podium with a message for students that safety is paramount in the industry and that it’s top driven. ɸ Page C13

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PIPELINE NEWS December 2012

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Credentials and certiĂ€cation needed to work “We have huge needs in terms of labour over the next decade and we need as many of these good young people working in our business as possible.â€?

LeĹŒ: Bryan Meesto, leĹŒ, an Onion Lake industry contact for employment, training and careers, speaks to Dion Arnouse, a First NaĆ&#x;on liaison from High Velocity Equipment Training in Camrose during an oil and gas career day at Lakeland College in Lloydminster.

- Rick Davidson, manager of recruitment for Cenovus

Right: Hundreds of students, educators and job seekers aĆŠended the Lloydminster Oil and Gas Career Discovery Day Oct. 23 to learn about jobs and career paths in the industry. More than 30 oil and gas companies and safety associaĆ&#x;ons parĆ&#x;cipated in the event.

Éş Page C11 “You have to have the credentials and the certiďŹ cation in order to work for certain employers,â€? he explained in an interview. “As well, you have to have eective health and safety management systems which need to be audited too, before you can even bid on work.â€? Enform is the safety association for the upstream petroleum industry in Canada and works with industry on the development of safety training and courses. “We’re not recruiting, but our industry is always recruiting,â€? said Ross. “We being their agent and their representative, this is all part of our process as well, dealing with young workers and inexperienced workers as well. “We are presenting today with some of our franchise instructors as well as some of our region-

al colleges that oer Enform training courses.â€? Ross also staed the Enform booth with Sarah Morris, a safety adviser. At the ADM booth, Chris Dlaquiere, an apprentice millwright in Lloydminster, had a simple message for young people thinking of following in his footsteps into the trades. “Make sure you ďŹ nd the right job – something that you are into and something that you enjoy,â€? he said. Dlaquiere explained that becoming a millwright is a four year course available at NAIT, where he studied, or at SIAST in Saskatoon. Lakeland College oers a variety of energy and trades programs too, but none for millwrights. Mary Cardinal, a ďŹ rst year student from Onion Lake First Nation studying the heavy oil operations technician or HOOT program at Lakeland, said she came to the event “to learn more about

the other businesses and how they work.â€? Cardinal is one of several Onion Lake fourth class power engineering students who completed a pre-HOOT course at Onion Lake this year before attending Lakeland this fall. “It was a ďŹ ve month program at Onion Lake. It’s going good. It’s getting easier now, kind of,â€? she said, adding she plans to come back next fall to get her third class power engineering diploma. Not every student at the discovery day was interested in working in the oil and gas industry including Kyle Whitlock, a Grade 10 student from J.R. Robson High School in Vermilion who made his intentions clear when the question was popped. “Not especially,â€? he said although he noted that his dad was an oilďŹ eld operator. “I am not interested it,â€? was his short explanation. “I want to do some kind of science.â€?

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PIPELINE NEWS December 2012

Paradise Hill thermal project to be a model for Husky By Geoff Lee Calgary – There were several story lines to Husky Energy’s third quarter results, most notably increased production from the Lloydminster area, thanks to continued emphasis on thermal heavy oil production. Full production from the 8,000 barrel per day Pikes Peak South and 3,000 bpd Paradise Hill thermal projects in the quarter reduced the impact from maintenance at Husky’s SeaRose and Terra Nova facilities in the Atlantic region. Total production before royalties averaged 285,000 barrels of oil equivalent in the quarter compared with 309,000 boepd a year earlier. Quarterly profit rose slightly to $526 million compared to $521 million a year earlier with average crude oil pricing of $70.14 per barrel compared to $78.70 a year earlier. “Our results show that we continue to build operational momentum for the first nine months of this year,” said CEO Asim Ghosh to investors during a quarterly conference call on Nov. 1. “Since we laid out a strategic plan two years ago, we have delivered on our targets consistently.” That strategy calls for greater emphasis on heavy oil thermal production and more drilling on resource plays in Western Canada. “We are transitioning this part of our founda-

The 8,000 barrel per day Pikes Peak South and 3,000 bpd Paradise Hill thermal projects in the Lloydminster area reached their design producƟon rates within two months of Įrst oil in the third quarter. More thermal projects are under construcƟon or being evaluated. Photo submiƩed

tion to more thermal production and horizontal drilling to extract greater value,” added Ghosh. “The Pikes Peaks South and Paradise Hill thermal projects have both reached the design production rates within the first two months of first oil. “Based on their cost efficiency and performance, they will be models for our future using this modular approach for thermal efficiency.” The third quarter ending Sept. 30 also saw construction progress on the new 3,500 bpd Sandall

thermal project in the Lloydminster area with first production scheduled in 2014. Design work is also continuing on the 8,000 bpd Rush Lake thermal development due to begin production in 2015. Additional thermal projects in the area are currently being evaluated. “The capital intensity of these thermal projects is very attractive. Their modular design and small scale means we’ve been able to reduce the cost per barrel to develop,” said COO Rob Peabody. ɸ Page C15

PIPELINE NEWS December 2012 Éş Page C14 Husky also continued its strategy to focus more on oil drilling with in the quarter with 95 per cent of the wells drilled targeting oil in Western Canada. “In heavy oil, we also drilled 49 horizontal wells. In total, 99 horizontal wells have been drilled to date out of a 140 to 150 well program we have planned for this year,â€? said Peabody. While Husky continues to focus more attention on thermal projects and horizontal drilling, approximately 265 cold heavy oil production with sand or CHOPS wells will be drilled in 2012. The company is also advancing a number of solvent enhanced oil recovery projects. In the third quarter Husky was active in six key resource plays in Western Canada including the Bakken, Viking, Cardium, Lower Shaunavon, Rainbow Muskwa as well as the new Slater River play in the Northwest Territories. “In total, we drilled 32 horizontal resource wells, bringing our total number to 66 over the ďŹ rst nine months of the year,â€? said Peabody. “This includes a horizontal well at our Rainbow Muskwa shale oil project in northwest Alberta. “We plan to drill six more wells this year to better understand the sweet spots with this play. In the Northwest Territories at our Slater River project, the work there is proceeding on schedule.â€? Plans are also underway to construct an all season access road this winter and further evaluate two vertical wells drilled in the area last year. “Looking ahead, we are expecting to drill a further 31 resource wells across our oil resource portfolio over the remainder of the year,â€? said Peabody. “Overall, we are on track to meet our goal that we set out in 2010 of having one third of our production from Western Canada coming from resource plays in 2016.â€? Husky is also focused on getting the most value for its capital spending to develop its liquids-rich gas properties in the producing Ansell and Kaybob plays in west central Alberta given low natural gas prices. Two wells were drilled at Ansell in the quarter, bringing the number of wells drilled to 14 for the year along with 38.5 net well completions. Up to four more wells are planned at Ansell for the remainder of this year. “We still consider Ansell as a core asset and it certainly has lots of potential. However, with the current price environment we have been shifting some of the capital into our oil plays,â€? said Peabody. A second Duvernay horizontal well was completed and tested at Kaybob, while a third Husky well and a partner-operated well are on track for completion in the fourth quarter.

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One well in the play is currently on production. Husky also continued to make progress with the ďŹ rst phase construction of its Sunrise Energy oilsands project in Alberta in the quarter. The phase is it approximately 50 per cent complete with all of the wells drilled. Modules for the central processing facility and ďŹ eld facilities are being delivered and installed with ďŹ rst oil production due in 2014. In the Atlantic region, maintenance is now complete on the oshore SeaRose facility while the Terra Nova facility will resume operations in the fourth quarter when maintenance is complete. Husky also reports its Liwan gas project in the South China Sea is 75 complete with ďŹ rst production expected in late 2013 or early 2014. Ghosh told investors during the conference he is personally focused on project delivery on key milestones and growth pillars. “Overall, we remain on course in executing our business plan and continue to make steady progress and setting the stage for major growth projects,â€? he said.

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PIPELINE NEWS December 2012

BlackPearl targets $140M to $160M capex Calgary – BlackPearl Resources Inc. continues to derive most of its operating cash flow from heavy oil production on lands owned by Onion Lake Cree First Nation at Onion Lake. The most significant increase in production in 2013 however, is expected from the Mooney alkali surfactant polymer (ASP) flood project in north central Alberta. Exit production levels for 2013 are expected to be between 11,000 and 12,000 barrels of oil equivalent per day – 10 to 20 per cent higher than 2012. The Calgary-based company is planning a capital expenditure of about $140 million to $160 million in 2013 for the continued development of its core heavy oil projects. These include the expanding Blackrod steam assisted gravity drainage (SAGD) pilot project near Fort McMurray, the expansion of Phase 2 at Mooney and a planned 12,000 barrel per day SAGD project at Onion Lake. “We continued to move all of our projects for-

ward during the quarter,” said BlackPearl president John Festival with the release of third quarter financial and operating results on Nov. 7. “The commercialization of the Blackrod SAGD project is rapidly moving ahead. We are assembling our project management team and will select engineering, procurement and construction (EPC) contractors in the next few weeks. “Response from the Mooney ASP flood is very encouraging and gives us confidence we will be able to achieve our anticipated production levels for the flood during 2013. “Production from Onion Lake continues to be our main source of operating cash flows and we will continue our conventional development program while we advance a thermal development plan. “Our next step is to put in place our financing strategy for the continued development of these projects, which we expect to finalize in the next few months.” Festival expects the 2013 capital program will

be funded from anticipated cash flow from operations and existing credit facilities. “We have a lot of flexibility in our capital program and can adjust capital spending if required,” he said. “In 2013, we also expect to put our longer term financing strategy in place to fund the first phase of development at Blackrod.” Over 40 per cent of the 2013 capital budget will be directed at the Blackrod SAGD pilot that will be expanded with a second well pair along with the start of EPC work. The company has received regulatory approval to expand the pilot. A second horizontal well pair will be drilled in the first quarter of 2013. The initial well has produced more than 100,000 barrels of oil since start-up and reached commercial production rates over 400 bpd in May when it was taken down for a month for well servicing. The well was brought on production in June. “Now that we have confirmed the reservoir can perform at commercial rates, we have begun testing alternate operating strategies in an effort to better understand the best way to operate these wells and potentially incorporate these strategies in the final commercial development design,” said Festival. “Some of the items we have been testing since the well was brought back on production include changes to the steam delivery system to ensure uniform heat distribution, different pump types, and testing different steam chamber operating pressures.” BlackPearl filed for a commercial development application for Blackrod with Alberta regulators in May.

ɸ Page C17

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Éş Page C16 Blackrod has the long term potential to support an 80,000 barrel per day SAGD development. At Mooney, BlackPearl will continue to develop its Phase 2 lands in 2013 with 20 to 25 horizontal wells to be drilled. The company will also upgrade the road and pipeline infrastructure on the expansion lands with the expectation the land will be converted to ASP ood injection in late 2013 or 2014. In 2011, BlackPearl completed the ďŹ rst phase of its ASP ood on a portion of the ďŹ eld to enhance production and signiďŹ cantly increase overall oil recovery. Early November production from the ASP ood was more than 1,200 bpd with peak production levels of 3,000 to 4,000 bpd expected to be reached sometime during 2013. Mooney production from the ASP ood area in the third quarter was 843 bpd, an 11 per cent increase from the previous quarter of 2012. Total ďŹ eld production at Mooney was 2,500 boepd. The company plans to drill 15 to 20 horizontal wells by the end of 2012 and into the ďŹ rst quarter of 2013. A portion of these lands could be added to the existing ASP ood as early as the fourth quarter of 2013. In other third quarter news, the construction of a heavy oil processing facility to handle the increasing uid volumes from the Mooney area was commissioned in September. In 2013, BlackPearl will continue primary heavy oil development, drill 20 to 30 vertical wells and upgrade water handling facilities at Onion Lake. Production at Onion was lower in the third quarter at 5,889 boepd compared to 7,065 boepd a year earlier, due to natural declines and limited new

This is a BlackPearl Resources’ bone yard photographed in October 2010 at Onion Lake.

drilling to oset the decrease. However, work is underway to drill 11 more conventional wells by the end of 2012 to add to the seven drilled in September which will be completed or put on production in the current fourth quarter. “This recent drilling has extended the pool to the south and has increased our primary drilling inventory in the area,â€? said Festival. “In addition, some of the recent wells drilled indicated that the net pay is likely suďŹƒcient to extend our planned thermal SAGD development. “Regulatory authorities are continuing to review our 12,000 barrel per day SAGD commercial development application.â€? BlackPearl’s total oil and gas production in the

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third quarter average 9,340 boepd, up 14 per cent from the same period in 2011. The increase is mainly attributed to production from the ASP ood at Mooney and drilling last fall on the Phase 2 expansion lands. In marketing news, BlackPearl has begun to ship between 1,200 to 1,500 bpd of its Onion Lake and Mooney heavy oil volumes by rail to the U.S. Gulf Coast and west coast of British Columbia to avoid pipeline bottlenecks, particularly in the midcontinent. “Although shipping by rail is more expensive than shipping by pipeline, the improved sales price for our oil more than osets the increase in transportation costs,â€? said Festival.

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PIPELINE NEWS December 2012

PIPELINE NEWS December 2012

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PIPELINE NEWS December 2012

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Kenilworth celebrates new manufacturing base

Heine Westergaard, president of Kenilworth CombusĆ&#x;on, steps out of his new 7,000 sq.-ĹŒ. cold storage facility for base process heater modules and Ňame arrestors. The company moved to a new six acre locaĆ&#x;on a few kilometers west of their previous locaĆ&#x;on in Islay, Alberta in October and November.

„ By Geo Lee Lloydminster – Kenilworth Combustion is heading into 2013 in a larger facility in a new location to meet the demand for its pre-assembled line of natural draft process heater modules. The Canadianowned company manufactures process heater modules for heating tanks, dehydrators, line heaters, treaters, refridge units, free water knockouts and re-boilers. Kenilworth is now fully operational at its new 7,200 sq.-ft. oďŹƒce and shop complex on six acres of farmland after moving a few kilometres west of their previous location in Islay, Alberta in October. “We needed to get into a bigger facility. We had maxed out

our accommodations,� said company president Heine Westergaard, who bought himself a total 86 acres for family and business use. “We either needed to build a new shop or move into a place that would get us some more square footage.� The new site includes a 7,000 sq.ft. indoor cold storage building for the company’s modular designed units and another shop for electric and wiring installations. “We focus on the

natural draft market from 35,000 BTU to 20 million BTU,â€? said Westergaard. “There was a gap in our product line. We started at 100,000 BTU and then went up. We’ve added a new product which is 35,000 to 250,000 BTU speciďŹ cally geared for the small utility heater market.â€? Kenilworth is featuring the 35K BTU unit at the Federation of Alberta Gas Co-ops 2012 Trade Fair and Conference in Edmon-

ton on Nov. 26-27. “We’ve got several of these units out in industry already. A lot of the setups we put them onto are solar power so they are low power consumption – they are half an amp draw,� said

Westergaard. “We also provide the solar package for the units. We are getting more into the electrical side of it. We just thought it was time to explore that avenue.� The new shop also

allows Kenilworth to expand its production and inventory of larger modular units over 1 MMBTU with the valve train pre-assembled, mounted and wired into its enclosure. ɸ Page C22

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PIPELINE NEWS December 2012

An industry leader ɺ Page C21 “The valve train will actually adapt to multiple sizes of flame arrestors,” said Westergaard. “In the one to five million BTU range, we can utilize three different flames arrestors on one valve train. It makes it very effective for the end user.” There are also three different burner sizes from 1.5-inch to six-inch diameter for each process heater module. “If a customer has a requirement that changes as far as heat goes, we can either change the flame arrestor or change the burner, and they can utilize that valve train,” said Westergaard. “It gives us more options to utilize existing equipment.” The Kenilworth process heater module is the only system on the market that is CSA code compliant when it arrives on site pre-assembled and function tested. “We can pre-assemble up to 10 million BTU – wired, fired and ready to go,” said Westergaard who added the in-house manufacturing process can mean a 30 per cent cost saving to the client. “Because we do everything 100 per cent to code, when it comes for approval, the inspection process is very simple,” he said. “We are able to assemble it in a controlled environment. We can eliminate delays in the field. You don’t have to worry about wind conditions or other weather conditions as well as the travel to site. “It’s all built the same. We’ve got a very good quality control program that covers all aspects of fabrication, assembly and shipping. “We also put it onto the test bench and we fire the equipment with gas, so it’s actually been in a process. It’s going out the door ready for use.” Kenilworth is also an industry leader in the capture of fugitive BTEX emissions created by glycol dehydrators in gas processing. The company’s BTEX and VRU (vapour recovery unit) process heater modules have been developed over the last 10 years and have proven to be effective at a fraction of the cost of other systems available. What makes Kenilworth’s process heater modules stand out from the competition is their patented flame scavenger low pressure burner that is also used in their flue gas recirculation system and BTEX and VRU systems. ɸ Page C23

Kenilworth CombusƟon keeps a selecƟon of diīerent sizes of Ňame arrestors in its cold storage building. The company’s 1 MM to 5 MMBTU process heater modules can be equipped with mulƟple sizes of Ňame arrestors. The company ships all of its modular units fully assembled and funcƟon tested.

There is plenty of room to manufacture process heater modules in this new 7,200 sq. Ō. shop and oĸce. The building is heated with a process heater module.

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PIPELINE NEWS December 2012

C23

Westergaard, houses an inventory of base process heater modules up to 1 MMBTU in a new 7,000 sq.-Ō. cold storage building at his new locaƟon. The base unit is built from a modular design with the valve train pre-assembled, mounted and wired into its enclosure.

ɺ Page C22 “We are able to take and utilize a low pressure wet fuel in our systems without having issues of freezing off in the winter,” said Westergaard. “We can take and run on multiple fuels with different BTU values, so we can take propane and natural gas in the same burner using the same orifice with the same setting, without having to take and change anything. “There is nobody else in the market that can do that.” Kenilworth has teamed up with Calgary-based Pronghorn Controls Ltd. to sell, service and distribute their process heater module products to more clients throughout Western Canada. “We have done a lot of work with Pronghorn Controls. They actually do a lot of marketing and cover the southern Alberta area for us,” said Westergaard. “It’s a good way for us to expand our business but focus on the manufacturing side of it, and have them to do the service and the installation. “We are still active in service and installation. We have service units roll out of here every day that do preventative maintenance, service, installation and commissioning.” Kenilworth, which has new products coming on line, has more than 50 gasfitters, electricians and instrument mechanics trained as burner service technicians across Western Canada. “By June 2013 we will have another line of products that will be pretty interesting,” said Westergaard who doesn’t want to tip the competition yet with details. Westergaard added he is proud to be manufacturing in Canada and said he would like to think that being a Canadian manufacturer carries some weight with customers. “There’s quality behind a Canadian-made product. We’ve seen there are

markets in other places that are opening up to us.” he said. “I can say that I am a very proud Canadian. I take great pride in Canada and the province.”

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PIPELINE NEWS December 2012

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By Geoff Lee Vermilion – Leading Manufacturing Group Inc., founded by Lee Gottschlich in 2010 with a head office in Nisku, a sales office in Calgary, and an oilfield tank manufacturing facility in Vermilion and will be expanding to Battleford. LMG is also completing a new 5,000 sq.-ft. paint and coating facility at its Vermilion plant where Gottschlich provided details of his growth plans in Alberta and Saskatchewan during an Oct. 26 interview. “We have the Battleford property. It’s prepped and ready for the final documentation from the town before we can take title to the property,” said Gottschlich. If construction is on target, the new 25,000 sq.ft. facility could be ready by the spring of 2013 to manufacture the same 1,000 to 3,500 barrel oilfield storage tanks that LMG fabricates in Vermilion. The new 20 acre site is located at 18th Street and 6th Avenue in Battleford and involved a property swap requested by the town to move the original location further away from residential development. The land issue set back plans for a September 2012 opening at the original site, but Gottschlich said the new location is good and will provide work for up to 50 employees at start-up. “The site is serviced, but we are doing the developing ourselves,” he said. Gottschlich said a few LMG employees in Vermilion who call Battleford home may relocate to the area when the new plant is operational. The company is actively recruiting for welders, foamers, labourers, crane operators and other positions for the Battleford start-up. Gottschlich said the Battleford tank manufacturing facility will put LMG closer to its provincial customers north and south of Highway 16 and cut costs. “It will be closer to the Saskatchewan market. These large tanks are expensive to truck so transportation will be much more competitive,” he said. Vermilion was chosen for the site of LMG’s first tank manufacturing plant on the basis of its proximity to highways 16 and 41. ɸ Page C25

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LMG manufactures 1,000 barrel to 3,000 barrel oilĮeld storage tanks at its 45,000 sq.-Ō. Vermilion plant where they also fabricate frac tanks. The company plans to begin construcƟon in 2012 on a new 25,000 sq.-Ō. tank fabricaƟon plant in BaƩleford that will employ about 50 workers at startup next spring.

ɺ Page C24 “We ship to Cold Lake, Bonnyville, Wainwright along Highway 41 which is the main corridor,” said Gottschlich. “The crossroads of Highway 41 and Highway 16 to me is one of the biggest assets we have with the plant here. “It doesn’t matter whether we are in Edmonton or Battleford, our steel comes down Highway 16 – whether it comes from Regina or from Vancouver or Portland.” LMG precuts its steel plate in Nisku where they opened a prep shop in January equipped with an 11.5 ft. by 55 ft. high defini-

tion plasma table. At the Vermilion plant, the steel tank pieces are put together with a combination of stick, MIG and submerged arc welding in an horizontal assembly process. “Everything is basically in the down flat position. Nobody is working in the air or off scaffolds,” said Gottschlich. “It’s safer and we can use the sub arc process which is an excellent process for welding the plate. We can make tanks 23.5 feet in diameter and 40 feet high. We are going to be going to 48 ft. high with our new paint and coating facility.” The 5,000 sq.-ft. paint and coating addi-

tion is 65-ft. in height or “50 feet under the hook” in shop talk with a 20-ton crane capacity. The new wing can paint, coat and insulate up to three 2,500 barrel tanks at a time and will be equipped with a $200,000 blast media recovery system capable of recovering shop dust. “We are just in the final stages of completing our new sandblasting and paint facility which will be in operation in December,” said Gottschlich . “We are just finishing the closing in next week (Oct. 29) and then we will be doing the inside work. “Building trades are hard to get. I have used the urethane foam panel for construction instead

of the typical foil back insulation. “It’s a much better insulation factor. That means it’s lined all the way up to the roof.”

LMG has also purchased a 10 acre property east of the tank fabrication plant for additional storage as the demand for their products continues to grow. “The volume has continually grown. It’s all a function of what the manpower load is and the type of tank,” said Gottschlich. “It takes a lot more man-hours to build a 3,000 barrel tank than it does to build a 1,000 barrel tank. “As I always say, a customer will forgive you for being late, but not for a bad job. If you build a quality product, there is definitely demand for it. “The demand is

there. In the last year, we doubled in manpower. We probably went from 50 to well over 100 employees.” A lot of new hires are taking their apprenticeship training at the Vermilion campus of Lakeland College where a career fair was held the same day Gottschlich provided his company update. “We have quite a few people come from Lakeland and our apprentices all go to Lakeland,” said Gottschlich. “We’ve got three apprentices that should be back next week from Lakeland (after) completing their second year. ɸ Page C26

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New growth in frac tanks The blue pieces in the foreground of this photo are the main parts of a new blast media recovery system to be installed in the new paint and coaĆ&#x;ng facility under construcĆ&#x;on at the LMG plant in Vermilion.

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Éş Page C25 “We use the foreign worker program where we can, so we’ve got people from Mexico and various countries. It’s always a task to hire people.â€? The most popular product LMG workers build in Vermilion is the 1,000 barrel tank for heavy oil well sites. The plant also makes a lot of 3,500 barrel tanks for batteries or water disposal facilities. LMG has also found a new growth market with the manufacture of frac tanks for use in hydraulic fracking operating in the Bakken oil play in southeast Saskatchewan and the Montney shale gas play in British Columbia. “They are a movable tank that is 12 feet high and 105 to 165 feet in diameter depending on what conďŹ guration they are,â€? said Gottschlich. “They basically are the equivalent of 16,000 barrels. “We make the assembly pieces so they can go to the site and they just hook together. They get a rubber bladder that goes inside that seals them and then they are ďŹ lled with fresh water.â€? As for what it means to be a Canadian owned manufacturing company, Gottschlich said this: “We have some patriotism and we get support because we are local and Canadian.â€? He went on to add that Vermilion has been very accommodating to the company since its inception. “The community is pleased with the number of people we have brought in and have moved here,â€? he said. “A lot of people have moved here. It’s a great town to live in and work out of.â€? Gottschlich also likes to spend as a much time in the shop as he can whenever he is in Vermilion. “I enjoy the area, I enjoy the work, I enjoy the plant and I enjoy the people,â€? he said. “When I am here, I am out there half a dozen times a day. I am not a sit behind the oďŹƒce type guy. I have good sales people in Calgary and I’ve got very good QC and supervision here. “I used to be in the shop, so I miss the shop.â€?

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Target Safety to start new building in spring Lloydminster – Target Safety Services celebrated six years of growth and success as a safety solutions provider on Oct. 1 with more good news ahead in 2013. The Lloydminster-based company has the contract to provide in excess of 200 safety personnel for spring and fall turnarounds in 2013 at the Lloydminster Husky ReďŹ nery and Upgrader. The company also expects to ďŹ nally begin construction on a new building in Lloydminster next spring and will gear up for more client turnarounds in 2013 from its branch locations in Red Deer and Bonnyville. Target Safety, which was founded by Clint McKinlay, Lloydminster general manager, and vice-president Craig Dore, company president in Red Deer, has been experiencing a strong year in 2012. “It’s been a good year so far. It all comes down to people. You can have the best equipment and the best processes, but if the people working for you don’t share your vision or your inspiration, it’s all for naught,â€? said McKinlay. “You have to have the people to act out the company vision. “Craig and I have ďŹ ve year plans. We will eectively be in year two of our second ďŹ ve-year plan in 2013 and continue growth. “Our vision is to inspire our people to help us become the most successful safety company in Canada, so we have pretty lofty dreams,â€? added McKinlay. “Those are the marching orders and every day, we will get a little closer to that goal.â€? Target Safety has grown to deliver safety training, technical rescue, industrial or health-related services, safety equipment and safety management systems led by its core of safety veterans. “Our people are by and large the most important aspect of what we do on a daily basis. We’ve managed to put together a very good, experienced management team,â€? said McKinlay. “Recruiting has been a primary objective of ours throughout the years to make sure we are ďŹ nding the right people. We are very fortunate in the sta that we’ve collectively developed together.â€? McKinlay and Dore launched Target Safety in Lloydminster then quickly opened a second branch in Red Deer. The Red Deer location has expanded to include a classroom and a 40-ft. high angle and conďŹ ned space rescue simulation tower called Goliath which is used for sta training and certiďŹ cation. Red Deer is the site for a quality assurance and quality control program for its extensive inventory and maintenance of safety equipment. In 2008, the company opened a small oďŹƒce in Bonnyville before relocating to a larger building in 2011 where they continue to grow – according to plans. “There have been some curve balls that have been thrown at us that were out of our control in terms of the world economy crash and the royalty tax hike for oil and gas producers, but we managed to work past those and continue to grow,â€? said McKinlay. The biggest growth area for the company is its industrial safety services division thanks to a big break in 2010 when it landed its ďŹ rst Husky turnaround safety contract. “That was a big challenge. The company was growing at the time of securing that contract,â€? said McKinlay. “It was a big step for us to be able to successfully execute it. We are here to say we did it and we look forward to doing it again. “We have the Husky ReďŹ nery in April, and then the Upgrader goes down in September, and that will be in excess of 200 safety persons for us for about 45 days. ɸ Page C28

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"we have outgrown our ofĂ€ces" Éş Page C27 “We executed it in 2010 and it will be roughly the same size in 2013. It’s deďŹ nitely one of those jobs that we look forward to.â€? Target Safety delivers everything from turnarounds, safety watch supervision, spark watches, conďŹ ned space entries, emergency response teams to safety advisers for drilling, completions and earth works through its industrial division. “We’ve really branched out in the terms of the level of service that we provide,â€? said McKinlay. Another upcoming milestone for Lloydminster operations will be next spring’s oďŹƒcial sod turning on a new 16,000 sq.-ft. facility to be located in the Robinson Industrial Park. “We have outgrown our oďŹƒces.

The human resources that we have between administration, operation and management – the building we are in has worked quite well for us for the previous ďŹ ve years – but we are at the point where we need more room,â€? explained McKinlay. “We have the extra equipment around, we have more people. A bigger, newer facility is going to set the bar for our company. Lloydminster is our head oďŹƒce. “It’s the only area that we are in where we are not in a new building, so we’re going to ďŹ x that.â€? McKinlay said the drafting and architectural plans for the new building were almost complete by Oct. 31 when he provided an update of company news. ɸ Page C29

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PIPELINE NEWS December 2012 Éş Page C28 Target Safety has a November 2013 move-in date that is dependent on weather and the availability of construction trades. “It’s been a work in progress. Moving to a new location is never easy, especially when you are building,â€? said McKinlay. “It’s been a challenge to do that at the same time as growing the business, but at the same time it’s a very necessary part of that whole package. We are looking forward to it.â€? Meanwhile, McKinlay has his plate full, staing up safety teams for winter oilďŹ eld construction projects and routine seasonal safety projects. “We are actually involved in several construction projects where we will have national construction safety oďŹƒcers who will be working on projects advising from a safety perspective and emergency response work we have ongoing year round on other construction projects,â€? he said. “In the summer months, we ramp up for turnarounds, and in the winter, we work service rigs, etc and keep our people working year round.â€? Target Safety currently has about 145 active employees as well as in-house recruiting and training for the seasonal turnaround crews. “With our growth, our training department – their primary function is to train our people. We will be recruiting in excess of 200 more people next year,â€? said McKinlay. “Our training group’s primary focus is making sure we have the best trained safety personnel the industry has to oer. “Some of the hires will be seasonal and project speciďŹ c, but a lot of those positions will be full-time work. Unfortunately, a lot of our big volume work is seasonal. “It’s cyclical, but there is some predictability to it. We just have to manage that.â€? Looking back over the years, McKinlay said safety and the perception of safety have come a long way from just being a required position to ďŹ ll to being a 24/7 mode of operating in the ďŹ eld. “The whole culture and peoples’ vision of what safety does – a lot of people now see the beneďŹ t of having safety,â€? he said. “In the old days, people would have a safety person because they had to, and now they are people who won’t go to work without a safety person. They are starting to see the additional beneďŹ ts. “What we are doing is helping them get home to their families each day the way they went to work, with all their ďŹ ngers and their toes. Their personal lives are beneďŹ ting because of it.â€?

C29

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PIPELINE NEWS December 2012

Market warms to ACL combustion control ACL Manufacturing Inc., a company that designs and manufactures natural draft burners, combustion controls and ignition systems for the oil and gas industry. The CSC 200 provides burner ignition and ame fail as well as monitoring of two thermocouple inputs which can be utilized

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Lloydminster – In the coming months, you can expect to see a lot more heavy oil tanks equipped with a CSC 200 combustion safety control from Canadianowned ACL Manufacturing Inc. based in Sundre, Alberta. The CSC 200 is the latest combustion control on the market from

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Andrew Pearce, general manager of ACL Manufacturing Inc., leĹŒ, speaks with a customer at the Lloydminster Heavy Oil Show about the features and beneÄŽts of the company’s newest CSC 200 combusĆ&#x;on control.

Andrew Pearce was on hand at the company’s booth to promote the product that is designed to be used in conjunction with an ACL combustion module for a complete safety com-

bustion device. “This is applicable to heavy oil tanks mostly. Every heavy oil tank has a burner in it to get it up to 70 or 80 degrees Celsius so they can truck it around,â€? said Pearce. “It lights and maintains the burners and also – with temperature controls – it shuts them o when they get to temperature. They can run pilotless or with a constant pilot. It saves on fuel gas. “Also, it can run it with lower power consumption with solenoid drivers – so it saves your power needs for solar applications. “Combined with a high eďŹƒciency burner, it puts a lot more heat into the process and it can reduce your fuel costs as well, but also puts a lot more heat into the process.â€? The CSC 200 is designed with an easy on-o switch and is enclosed in a corrosive resistant and weatherproof body. The product is also applicable for line heaters, treaters and any natural draft burning heated equipment where accurate temperature monitoring of control is required. “CNRL in Bonnyville is using a lot of them now,â€? said Pearce. “We are just talking with some guys here, and they are working

so well they don’t get any callbacks, and the operators love them for the simplicity and the way they work. “This particular control has been out a few months now, so this is our latest control that we have. “We are also adding more Modbus communications onto it. We are working on new controllers all the time too.â€? ACL was established in 1991 by Chris Aldrich and is recognized as an innovator in providing safe and reliable control equipment for industrial heaters, incinerators and are ignition systems. “We are in Sundre, and we are also pushing into the U.S. We are in Billings, Montana, and have a lot of customers down in Texas as well.â€? ACL markets its products globally and sees a lot of growth potential for its latest CSC 200 combustion control in the Lloydminster to Bonnyville heavy oil corridor. “There is a still a lot of growth potential – of course, there a lot of dierent companies up here we’re trying to meet,â€? said Pearce. “They’re drilling lots of wells. There are a lot of tanks going in and they all have burners in them. We are looking forward to working with more companies up here.â€?

PIPELINE NEWS December 2012

C31

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PIPELINE NEWS December 2012

JOB OPPORTUNITIES: SURVEY PARTY CHIEF & SURVEY ASSISTANT

Caltech Surveys Ltd. has openings for an experienced Survey Party Chief and a Survey Assistant, based in our Unity ofďŹ ce (working in the Kindersley, Unity, Battleford, and Lloydminster area). Caltech Surveys offers competitive wages, excellent beneďŹ ts and a company matched RSP plan. Survey Party Chief - Ideal candidates will have a Diploma in Geomatics Technology, or equivalent; experience with RTK GPS, total stations, survey data collection and buried facility locating; survey experience in legal surveys for the petroleum industry; applicable safety certiďŹ cations and excellent communication skills. Survey Assistants – Candidates must have a valid drivers’ license. Preference will be given to those with experience & safety certiďŹ cations, but neither is required. Apply in conďŹ dence to: Dawn Boxall, Administration Manager dawn.boxall@caltechsurveys.com

29(5 <($56 67521* ,1 2,/),(/' &216758&7,21 $ 5 1 ( 7 7 % 8 5 * ( 6 6 Oilfield Construction Limited

NOW COME JOIN OUR TEAM!

• CONSTRUCTION MANAGER

We’re hiring for various projects throughout Southern Saskatchewan

• FIELD SAFETY ADVISOR

Over 50 years strong, Arnett & Burgess Oilfield Construction Limited safely provides quality pipeline construction, facility installation, pipeline integrity, custom fabrication, maintenance and related construction services to the energy industry.

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- Candidates must have previous leadership/managerial experience within the Pipeline Construction industry (mainly underground lines max 16�). This position’s home base is in Regina. - The ideal candidate will have a CSO designation. This position will oversee pipeline construction projects in southern sk with a home base in Regina

• PIPELINE CONSTRUCTION LABOURERS • FOREMEN • HEAVY EQUIPMENT OPERATORS

-Employee & Owner Operators with Pipeline Construction Experience

All positions require previous experience in Pipeline Construction. Previous experience on Pipeline Integrity projects is an asset.

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Compensation: Competitive wages Overtime Daily Subsistence /Living allowance

Preferred Certifications H2S Alive Standard First Aid & CPR

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Required Certifications Driver’s License Ground Disturbance – (Heavy Equipment Operators only)

Please submit your resume to : For more details and other career opportunities please visit: email: hr@abpipeliners.com • Fax:403.265.0922 www.abpipeliners.com For Inquiries please call: 780.384.4050

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PIPELINE NEWS December 2012

THE FOLLOWING POSITIONS ARE AVAILABLE IMMEDIATELY MECHANIC SERVICE TECHNICIAN Interested applicants can fax to: 306-634-4258 or email: brenda.jensen@bbaxtertransport.ca

Some of the many benefits to consider when applying for a position at Bert Baxter Transport in Estevan: • Full time, permanent employment • Full benefits packages available • Clean, safe work environment

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PIPELINE NEWS December 2012

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