Pipeline News October 2014

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A5 The Billion Dollar Bet

A10 SaskPower CEO

A24 Carbon Capture Test Facility

Check out Lloydminster Heavy Oil Show Coverage In B Section

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PERRY HOLMGREN 306-634-4242 latus@sasktel.net like us on

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PIPELINE NEWS October 2014

INSIDE SECTION A 4

Enform Saskatchewan moves to Weyburn

14 Making the big decision: Premier Brad Wall

5

Carbon capture: the billion dollar bet

6

Editorial

16 NDP isn't convinced clean coal is worth the money, or that it will work

7

Opinion

20 How do you capture CO2 24 Carbon Capture Test Facility

10 SaskPower CEO gets to the heart ŽĨ ƚŚĞ žĂƊ ÄžĆŒ

40 The other end of the pipeline: The Weyburn Unit

13 A very special turbine

45 60 years for Weyburn Unit

SECTION B Ď­

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14 Shell Quest CCS moving along ĎŽĎŹ KƉĆ&#x; ĹľĹ?njĞ Ç Ĺ?ƚŚ Ä‚ ĞĚĹ? ώϲ Ä‚ĹŹÄžĆŒ ,ĆľĹ?ŚĞĆ? ŽƉĞŜĆ? >ůŽLJĚ super centre ĎŻĎŹ KĆŒÄ‚ĹŻ ĹšĹ?Ć?ĆšĹ˝ĆŒÇ‡ ŽĨ tĞLJÄ?ĆľĆŒĹś ÄŽ ĞůĚ

11 Pilot CO2 Ä?Ä‚Ć‰ĆšĆľĆŒÄž ƉůĂŜƚĆ? ÄŽ ĆŒĹ?ĹśĹ? up at Pikes Peak

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government. I won’t be doing that work. „ By Geoff Lee “So just to be clear and transparent, I won’t be engaging any of my former colPipeline News Regina – Private citizen Tim McMillan will have a wide angle view of national leagues for a least a year.â€? As CAPP’s new leader, McMillan can and will add the concerns of Saskatchenergy issues as he begins his new job as president and eventually CEO of the ewan’s energy industry to CAPP’s new national energy dialogue. Canadian Association of Petroleum Producers on Oct. 1. “I think it’s important that this industry starts looking at the national scene,â€? CAPP is the voice of Canada’s upstream oil, oilsands and natural gas industry, and McMillan will be its prime spokesperson with pipeline projects, oilsands devel- said McMillan. “Across our country, we have energy opportunities and potential. Saskatchewan opments and environmental issues among current topics. and Alberta are leaders. British Columbia has just phenomenal potential of their Saskatchewan’s former Rural and Remote Health minister resigned from cabinet immediately following his new career announcement on Sept. 18 while also gas. “It needs to be a national discussion not just one in this province or in a couple resigning as the MLA for Lloydminster effective Sept. 30. of provinces.â€? “I resigned from cabinet effective today and I have to get some of the MLA McMillan was previously minister responsible for Energy and Resources in business in order and will be stepping away from politics in general at the end of Wall’s cabinet, a post he held and immensely enjoyed for nearly two years before a September,â€? said McMillan in a phone interview. cabinet shuffle in June to rural and remote health. “Nothing convinced me to step away from politics. I loved my job. I loved “Around the cabinet table there was a lot of responsibility,â€? said McMillan representing the people of Lloydminster. when he was energy minister. “The opportunity pursued me and ultimately, and I wanted to accept it.â€? “The energy issues are something I am passionate about, the community I McMillan was chosen by CAPP to fill the shoes of chief executive Dave Colgrew up in and represented and represent still.â€? lyer who will continue as CEO for a transition period until his planned retirement McMillan’s interest in energy is stoked by his strong connections to the energy at the end of year. industry over many years including ownership of an oilfield services companies. “We are confident that Tim McMillan has the skills, experience and energy “It’s such an important part of our community so I very much enjoyed that necessary to lead CAPP, particularly as we engage more broadly across Canada,â€? role in cabinet,â€? he said. said Glenn Scott, chair of CAPP’s board of governors in a news release. “Those same reasons are the reasons I am passionate about being part of the McMillan said accepting the leadership position at CAPP “allowed me to deal with energy issues and be part of the national discussion about where national national discussion.â€? Asked what his priorities would be at CAPP McMillan said, “I don’t want to energy opportunities are going to go. “Canada has great potential. We’re a world leader today in the way we produce prejudge anything,â€? until he starts work. “I just know that the opportunities, the resources that we have in the oil and the amount we produce. ground, the technology that we’ve developed – we’ve just got “To take the position I have been offered allows me to have a very central such great potential that’s pretty exciting to be part of,â€? he role in that discussion going forward.â€? said. Saskatchewan Premier Brad Wall said McMillan will be missed As for CAPP’s role in building national support and wished him all the best in his new career. for new pipelines like TransCanada’s proposed En“Tim has been a great MLA and minister and I will miss ergy East project to transport Western Canadian oil his unique perspective at the cabinet table,â€? Wall said in a to the east coast of Canada, McMillan said educastatement. tion is the key. “As president of CAPP, I know Tim will continue “We live in an area that has the industry working hard to develop our resource industry in Western around us,â€? he said about the west. Canada, including here in Saskatchewan.â€? “We understand how they operate and the McMillan was first elected in 2007 and re-elected in integrity in which they operate. But there are large 2011 holding several different cabinet posts over the years parts of the Canada that aren’t closely connected including Energy and Resources, Crown Investments to this industry that we are.â€? Corporation, Saskatchewan Liquor and Gaming “Finding an effective way to let them know Authority and Tourism Saskatchewan. what our values are and how important we treat Yorkton MLA Greg Ottenbreit the communities that we are in is important. replaced McMillan in the rural and “Getting that broader base of knowledge in remote health role. all of Canada is a part of how we move forWall must also call a byelecward as a country on getting big projects tion within six months of the done.â€? date that McMillan vacated the Meanwhile McMillan and his seat. family are packing up for the In the meantime, Mcmove to Calgary. Millan said he will heed “The position is to the letter of the new headquartered in CalSaskatchewan Lobbygary and we’ve made a ist Act which forbids a practice in our family to former minister from stay very close together lobbying the provincial and do what we have to. government for one year In this we’re going to stay after leaving cabinet. together again,â€? he said. “The role I am taking As for the proson with CAPP is one of pect of abandoning his leadership as the presilifelong support for the dent, and it will transiRiders when they come tion into president and to Calgary McMillan CEO over the next few laughed and said, “Not a months,â€? said McMillan. “We have people In a surprise announcement on Sept. 18, Tim McMillan, now former minister of Rural and Remote Health and MLA for chance. I think I will be who work directly with >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ Íž^Ä‚Ć?ĹŹÄ‚ĆšÄ?ĹšÄžÇ Ä‚ŜͿÍ• Ä‚ŜŜŽƾŜÄ?ĞĚ ĹšĹ?Ć? Ĺ?žžÄžÄšĹ?ĂƚĞ ĆŒÄžĆ?Ĺ?Ĺ?ŜĂĆ&#x; ŽŜ ĨĆŒŽž Ä?Ä‚Ä?Ĺ?ŜĞƚ ĂŜĚ Ä‚Ć? Ä‚Ĺś D> Ğč ÄžÄ?Ć&#x; ǀĞ ^ÄžĆ‰ĆšÍ˜ ĎŻĎŹ the only green jersey at ƚŽ Ć?ĆšÄ‚ĆŒĆš ĹšĹ?Ć? ĹśÄžÇ ĹŠĹ˝Ä? Ä‚Ć? Ć‰ĆŒÄžĆ?Ĺ?ĚĞŜƚ ŽĨ ƚŚĞ ĂŜĂĚĹ?Ä‚Ĺś Ć?Ć?Ĺ˝Ä?Ĺ?Ä‚Ć&#x; ŽŜ ŽĨ WÄžĆšĆŒŽůÄžƾž WĆŒĹ˝ÄšĆľÄ?ÄžĆŒĆ? Ĺ?Ĺś Ä‚ĹŻĹ?Ä‚ĆŒÇ‡ ŽŜ KÄ?ĆšÍ˜ Ď­Í˜ File photo those games.â€? each province and each

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PIPELINE NEWS OCTOBER 2014

BRIEFS Enbridge ups its wind stake

Enbridge Inc. announced on Sept. 24 that it has entered into an agreement to purchase additional ownership stakes in two Quebec wind projects from existing partner, EDF EN Canada Inc. Under the agreement, which is expected to close in mid-October, Enbridge will invest approximately $225 million to acquire an additional 17.5 per cent stake in the 300 megawatt Lac Alfred Wind Project and an additional 30.0 per cent stake in the 150 MW Massif du Sud Wind Project. Both transactions are subject to customary closing conditions. Enbridge Inc. and EDF EN Canada became co-owners of the Lac Alfred project in December 2011 and expanded their partnership in December 2012 with the purchase of 50 per cent of Massif du Sud. On completion of the investment, Enbridge will hold 67.5 percent interest in Lac Alfred Wind and 80 per cent interest in Massif du Sud. Combined, both projects generate enough clean electricity to meet the needs of more than 100,000 Quebec homes. Electricity generated by the facilities is delivered to Hydro-Quebec Distribution under 20-year power purchase agreements. EDF EN Canada will continue to provide management services to both projects and EDF Renewable Services will continue to provide longterm operations and maintenance services.

Briefs courtesy Nickle’s Daily Oil Bulletin

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Enform Saskatchewan moves to Weyburn „ By Brian Zinchuk Pipeline News Weyburn – Several years ago when Enform established Enform Saskatchewan, it set up office in Regina. The idea was to be close to the regulators. Now Enform Saskatchewan has moved to Weyburn, this time the idea is to be closer to the clients. On Sept. 4 a grand opening event was held in Weyburn’s Memorial Park, just down the street from their new offices. They began operations in Weyburn in midsummer. The fall protection training simulator from the Saskatchewan Energy Training Institute was brought out for a demonstration. Claude Duret, an Enform instructor, showed various methods of fall protection systems that are used in the oilfield, including those on tanks and derricks. Enform made a $10,000 donation to Saskatchewan Energy Training Institute (SETI), money that will be used for scholarships for its rig worker program. Cameron MacGillivray, president and CEO of Enform, had blue fire-retardant coveralls over his shirt and tie as he explained the move from Regina to Weyburn. “A lot of what Enform does is work directly with the workers, especially new workers coming in. To be closer to the action, where the actually drilling and operations in oil and gas is going on, just makes great sense for Enform,�said MacGillivray. As for why they didn’t come to Weyburn initially, he responded, “I think initially we wanted to establish a strong relationship with the regulators and government officials to understand where

they’re coming from. We still do a lot of that. But most important to us is getting directly to the workers. “We’ll be much closer to the action here. That keeps us in touch with the real industry.â€? Given that SETI is in Estevan, that city was considered, but facilities in Weyburn made the difference. “It’s a fairly small office, because we use third party trainers to do all our training,â€? he said, noting six people transferred from Regina, and they are still adding staff. A senior advisor was recently added. Bob Ross, manager of Enform Saskatchewan, noted another safety advisor position was in the works. “We cover the whole southern half of the province – Lloydminster, Kindersley, Swift Current. We’re not just focussing our attention on the southeast corner. We’re also able to see what services are provided down here and are able to provide that across the whole province too,â€? Ross said. MacGillivray added, “We’ll try to cover the whole province. Being part of the heart of industry helps us keep in touch. We’ll try to reach out to all parts of the province and meet the whole province’s training requirements.â€? When the Regina location was rolled out, a training room was one of its main features. That has not been included in the new Weyburn office. MacGillivray noted Enform’s “hands on approach,â€? talking to companies that are struggling with their safety performance. ɸ Page A9

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PIPELINE NEWS October 2014

A5

The billion dollar bet

BRIEFS

Carbon capture and storage comes of age at Boundary Dam

Diana McQueen no longer Alberta energy minister Just days after Diana McQueen was introduced as Alberta’s Energy Minister at the 2014 Lloydminster Heavy Oil banquet on Sept. 9, Alberta Premier Jim Prentice shuffled his cabinet appointing Frank Oberle as the new Energy Minister and Deputy Government House Leader. McQueen is now Minister of Municipal Affairs and Government House Leader. Oberle is the MLA for Peace River who was appointed as Minister of Aboriginal Relations in December 2013 by former Premier Alison Redford. Oberle was formerly the Associate Minister of Services for Persons with Disabilities and Minister of Sustainable Resource Development.

With all the pieces now in place, the “capture islandâ€? of the Boundary Dam Integrated Carbon Capture and Storage project is seen from the ĆŒŽŽĨ ŽĨ ƚŚĞ ĂĚŊĂÄ?ĞŜƚ ŽƾŜÄšÄ‚ĆŒÇ‡ Ä‚Ĺľ WĹ˝Ç ÄžĆŒ ^ƚĂĆ&#x; ŽŜ͘ Photo by Brian Zinchuk

„ By Brian Zinchuk Estevan – It’s the big billion dollar bet. Can SaskPower, and through it, Saskatchewan and Canada, successfully capture post-combustion carbon dioxide that would otherwise go up a smokestack? And in doing so, with the world’s first commercial scale post-combustion carbon capture plant, can we change the world? It’s no exaggeration to say the world is waiting to know the answer. National leaders from around the globe met in New York on Sept. 23 to discuss climate change. Some people see carbon capture as a silver bullet to save the coal industry and forestall climate change via “clean coal.� Others are skeptical it will work at all. Throw into the mix the sale of carbon dioxide for enhanced oil recovery, and suddenly coal-fired power generation can have a profound impact on the oil business. With stakes potentially as high as the climate of the entire planet in the balance, what happens at the Boundary Integrated Carbon Capture Project could be a game changer either way. For Michael Monea, there was some relief in his voice when asked on Sept. 17 if the “capture island� worked. Monea is SaskPower’s president, carbon capture and storage initiatives, and the company’s front man on the project under president and CEO Robert Watson. “I can tell you it does (work). We’re there right now. Last night our plant went up to full production. We’re ramping up from 500 tonnes to 1,800 tonnes. Last night they took 100 per

cent of the flue gas from the plant. We’ll be commissioning our compressor in a week,� said Monea. “It’s working. We’ve got a few changes we have to make, some of the learnings now that we have the plant operational, but it’s working pretty nicely.� How did we get here? Where will we go next? In this edition Pipeline News presents the most exhaustive examination of this project in the press to date. This edition has been years in the making. Through more than 20 stories we cover everything from the project’s origins to its construction to what happens at the other end of the pipeline, in the Cenovus-operated Weyburn Unit. That oilfield just happens to be celebrating its 60th anniversary. Carbon dioxide is expected to extend its life for several more decades. Along the way we talked to proponents, decision makers, a critic, and numerous specialists in between. To top it off, we also examine the new Carbon Capture Test Facility under construction at the Shand Power Station and the Aquistore project. On Sept. 30 and Oct. 1, SaskPower will host a symposium in Regina to introduce this project to the world. More than 20 countries are expected to be represented. The next day, Oct. 2, an invitation-only grand opening will be held at the Boundary Dam Power Station. If you have questions about carbon capture and enhanced oil recovery, hopefully in the following pages you will find answers.

Briefs courtesy Nickle’s Daily Oil Bulletin

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A6

PIPELINE NEWS October 2014

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 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 SASK. & MANITOBA R5 -. 0 (5g8ifl8lij8hlkj Cindy Beaulieu Candace Wheeler Kristen O’Handley Deanna Tarnes Teresa Hrywkiw R5 ,&3& 5g8ifl8jki8hkhk Alison Dunning NORTHWEST SASK. & ALBERTA R5 &)3 '#(-. ,5g8mnf8nfn8imfl Krista Thiessen CENTRAL Al Guthro 1.306.715.5078 SOUTHWEST R5 1# .5 /,, (.5g8ifl8mmi8nhlf Stacey Powell

To submit a stories or ideas: Pipelines News is always looking for stories or ideas from our readers. To contribute please contact your local contributing reporter. Subscribing to Pipeline News: Pipeline News is a free distribution newspaper, and 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 have another meaning for CO2 in Saskatchewan It works. At 12:46 a.m., Sunday, Sept. 14, the first carbon dioxide was captured at the $1.3+ billion Boundary Dam Integrated Carbon Capture Project. “Not that I was up and counting,� said Mike Monea, president, carbon capture and storage initiatives with SaskPower, on Sept. 17. Indeed, much of Estevan, SaskPower and the provincial government had been waiting with baited breath for the knowledge that yes, indeed, we can capture large, commercial-scale volumes of carbon dioxide from a coal-fired power plant. That knowledge will be a huge relief. This edition Pipeline News tackles the carbon dioxide issue from every angle we could think of – and some that we weren’t expecting. It turns out carbon dioxide is going to play a key role in the Saskatchewan oilpatch for decades to come. In southeast Saskatchewan, the big issue has been the refurbishment of Boundary Dam Unit 3, and the construction of the first-of-its-kind commercial scale carbon capture unit. You might wonder why “Saskatchewan’s Petroleum Monthly� is dedicating so much ink to a power project. The reality is carbon dioxide is going to play an ever-increasing role in the oilpatch. Without the sale of CO2 for enhanced oil recovery, BD3 likely never would have happened. Carbon capture and enhanced oil recovery in this province are inexorably linked, and will be for generations to come. Of particular note is the fact that there was substantial interest from oil producers in purchasing carbon dioxide from Boundary Dam for use in EOR. If this interest holds, then when it comes time to do Units 4, 5 and 6 at Boundary Dam, we will likely see new carbon dioxide projects throughout the southeast, re-invigorating old oilfields. The

Steelman field would be a prime candidate. That’s no small matter, either. We’re talking of billions of dollars in investment, production and royalties over the years. Then there’s Husky’s approach to CO2 on the western side of the province. One of the first leads we got for this paper when we fired up in 2008 was that Husky was working on some hush-hush CO2 enhanced oil projects near Edam. It’s not so hush-hush anymore. As we now know, Husky began operating two solvent EOR pilots at its Edam and Mervin fields in 2010 and added two CO2 injection sites built at Lashburn and Tangleflags in 2012. Husky began capturing CO2 at its Lloydminster ethanol plant in 2012 for EOR injection projects on new and existing reservoirs as part of an ongoing pilot program. The CO2 capture and liquefaction project in Lloyd converts approximately 250 tonnes a day of produced CO2 emissions into a liquid for use in EOR projects. Using captured CO2from various sources for enhanced oil recovery has become an integral to their plans to double production of heavy oil in the Lloydminster area to over 80,000 barrels a day by 2020. Husky is currently piloting three different carbon capture technologies at its Pikes Peak South steam generator to capture CO2 for enhanced oil recovery in depleted reservoirs. The company plans to evaluate the technologies for potential commercial application for use in all or most of its thermal plants in the Lloydminster region. CCS will continue to play a key role for Husky in sustaining heavy oil in the area while reducing carbon emissions. To most of the world, CO2 means greenhouse gas. To Saskatchewan, it means oil.

PIPELINE NEWS October 2014

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OPINION

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Wrapping one’s head around the clean coal math Estevan – While on the roof of the Boundary Dam Power Station with now-retired plant manager Mike Zeleny on Sept. 17, I had a realization: this would likely be the last time I would be on this roof, looking out at the carbon capture project that I had invested so much time and effort in covering and trying to understand. I suspect I have written more about this project, and carbon capture and storage, than any other journalist in this province. It’s taken that long, since 2008, to really wrap my head around one of the most important factors: the economics. It took an interview with NDP MLA Cathy Sproule, my last one for this edition, to really rattle my brain about it. She was really concerned about the business case behind the whole project and mounting costs. One of the things I heard a lot during the numerous interviews I’ve done with regards to this clean coal project was the importance of the sale of CO2 for enhanced oil recovery. I’ve known this for years, but it wasn’t until I had completed all my research for this edition did it really occur to me just how important that is. First off, over the past six years, no one has told me what the value of compressed CO2 for EOR is, i.e. what is Cenovus paying for it at Weyburn and Apache at Midale. The closest I could get from an expert on CO2 (but not with SaskPower, Dakota Gasification, Cenovus or Apache) was that $30 per tonne was not an unreasonable number to

work with. So for a $1.3 or $1.4 billion plant, that doesn’t seem like much. With one million tonnes of CO2 per year going to Cenovus, that would only equate to $30 million per year, $300 million for the initial 10-year contract, assuming steady production and sale of CO2. Just a drop in the bucket, right? Then I started doing some math on the increased royalties the province will collect from the incremental increased oil production due to enhanced oil recovery versus not using EOR. There are a lot of variables, including the price of oil, how much incremental oil is produced, how much of that land is paying Crown royalties, what sort of EOR incentives the province has, the price of oil, etc. Using what I think are conservative numbers, I come up with a very, very loose guestimate of at least $30 million per year. It could be more. I don’t think it would be much less. But let’s work with that number. So now we add another $300 million to that 10 year number. Then we have to consider the sale of sulphuric acid and fly ash. I have no clue what that is worth, but it has to be worth something. Let’s say $60 million over 10 years as a lowball guess. It’s probably a lot more. Now add in the $240 million cash-on-thebarrelhead the feds put up in 2008. So now we’re looking at $300 m +$300 m +$60 m +$240 m = $900 million, the lion’s share of the capital costs

of the project. I realize I am only talking capital costs here so far, but we haven’t even sold one watt of electricity yet. Surely that should take care of the operational costs. And one way or another, SaskPower had to replace that power unit. Additionally we’re only looking at a 10 year time frame, not 20, 30 or 40, during which time royalty value, the price of oil, and the price of CO2 would conceivably go up. There’s another key concept we must apply that works here, but will not work in most other jurisdictions in North America that is, SaskPower is a Crown corporation. That is absolutely critical. SaskPower is Saskatchewan. Saskatchewan is SaskPower. So while increased oil royalties would not make much difference to the power utility owners in a jurisdiction with a private utility (since they would go to someone else), here it all ends up going to the same people – the people of Saskatchewan. So while SaskPower may not get the additional oil royalties, the provincial treasury sure will. That, my friends is my best guess on the economics of clean coal. If the plant works, and keeps working, we should be able to make the math work too. Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.

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Pace of regional growth city-like A lot happens in a New York minute. The same can be said in a just a few months in busy oilfields towns where the fast pace of progress keeps changing the landscape. You notice it when you revisit a community like Kindersley six months after your last visit and see new hotels, new retail shops and new businesses under construction or working out of different addresses. In the Kindersley area growth is driven by a red hot Viking play that produced more than 14.5 million barrels of oil in 2013. There were 1,045 horizontal wells drilled into the play in from April 2013 to April 2014 with a similar number expected in the current annual cycle. All of this activity is bringing more workers and families to town and driving up the price of available housing and apartments. On the plus side, the demand for housing is beginning to be met with the first phase construction of Brookhollow Estates that could eventually accommodate over 3000 residents in the next 10 years. You can also notice the quicker pace of progress with more truck traffic on Highways 21 and 7 and new drilling camps and facilities construction seen from the drive in.

It’s a similar story in the heavy oil community of Lloydminster where new houses and apartments are snapped up the minute they come on the market. News that Husky Energy plans to double its Lloyd area thermal production to 80,000 barrels a day by 2019 is helping to inspire confidence in sustaining industry growth. Lakeland College plans to officially open its new $23 million Energy Centre on Nov. 14 to train even more students to become power engineers needed to drive the thermal oil industry. There are so many new houses, commercial developments and retail businesses springing up on both sides of the border city that it requires a weekly drive around to keep current with the changes. The New York minute has come to Lloydminster. The pace of change is not quite as quick in smaller outlying rural municipalities and towns but there is a lot of oil hauling and oilfield developments going on in the country where the oil is produced. More and more oil companies are relocating or expanding to rural settings as well for lower cost land and taxes and to be closer to the action. If you want to build a house in the country though it better be an RTM as the shortage of workers can make building a house in a rural setting

a long-term project. A string of RTM builders and mobile home sellers along Highway 16 west in Lloydminster is visible proof of the demand for ready-made homes in the region. Housing is the number one priority in just about every oilfield town in Saskatchewan including Kerrobert, where Torq Transloading Inc. is expected to finally begin construction of its $100 million Kerrobert Rail Terminal. In that community, work camps may be the order of the day as Inter Pipeline Ltd. and Enbridge Inc. also have major pipeline infrastructure projects planned to kick off over the next couple of years. Some new house construction is expected to get underway there in the coming months, but camps will likely be needed to fill short gaps in accommodations for all of those expected workers. Visitor camps are also booming throughout the province as temporary workers with RVs are able to bring their own accommodation for three seasons of the year. If all this growth, driven by the oil and gas industry keeps up, it won’t be long before we’re all living in New York minute, but don’t set your watch by it. There are more than eight million people in the city of New York.

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 October 2014

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Enform moves to Enform ɺ Page A4 COR (Certificate of Recognition) audits will still be focused out of Calgary for processing. “Enform has recently improved its COR audit protocol, made it simpler and streamlined it. We do that in conjunction with provincial bodies,” MacGillivray said. “In the last six to eight months we’ve streamlined the COR process, reduced the number of questions but kept the integrity of the questions and sections in the protocol intact. All of the feedback we’re getting over 80 per cent approval. It’s a much faster, more effective protocol. “Enform represents the whole upstream oil and gas industry in terms of the safety initiative, from the pipeline carriers to the small and large producers, to the seismic guys to the drillers and services people. We represent them all. They all sit on my board. We are the oil and gas industry, and we’re the chief advocate for safety and raising the performance of safety in the industry. We trained over 255,000 people last year. It’s a huge undertaking. We do that all across Canada and we train in 40 countries around the world.” When SETI was first envisioned, many of its advocates were pushing for training to be offered that would mean workers would no longer have to travel to Alberta to train on specialized items like blowout preventer simulators or perhaps a drilling or service rig. Asked if the move to Weyburn for Enform would be a step towards that, MacGillivray said, “That will largely be needs-

driven. We’re quite supportive of that. Several of the colleges that work with us in terms of advanced training. We do simulator training in Nisku, such as well control. We’d be happy to extend that to other regions. It really depends on the level of activity to make economic sense to put it in specific locations.” Ross spoke of their goal of changing safety culture in Saskatchewan, to start making safety part of the process, part of the job, not auxiliary to the activities. Asked about a common gripe that some people perceive safety as “more paperwork,” MacGillivray said, “Safety starts with values. Those values start at the top of the organization and extend down to the front-line worker. One of the key players in all of this is the firstline supervisor. If the first-line supervisor buys into the values of the company, he makes sure his crew is also buying in. If they’re not buying in, he takes corrective action. “We think the supervisor is a key player. We spend a lot of our time and resources developing supervisor competency guidelines and training. They’re a key person in this whole process.” MacGillivray then added, “Safety culture has to be something you do every day, something you can measure. In the oil industry, when we translate safety culture, we talk about actions we can take and specific training. It’s industry-recommended practices – how to frac a well, how to work on a sour gas well. “We also have guidelines – how to handle silt when you frac a well, for

Claude Duret, an Enform instructor, leans out from a monkeyboard during a fallĂƌƌĞƐƚ ƚƌĂŝŶŝŶŐ ĚĞŵŽŶƐƚƌĂƟŽŶ͘ dŚĞ ĚĞŵŽ ǁĂƐ ŵĞĂŶƚ ƚŽ ŚŝŐŚůŝŐŚƚ ŶĨŽƌŵ͛Ɛ ŵŽǀĞ ƚŽ tĞLJďƵƌŶ͕ ĂŶĚ ǁĂƐ ĚŽŶĞ ŝŶ ĨƌŽŶƚ ŽĨ ŝƚLJ ,Ăůů͘ example. We talk about sharing knowledge. When there is an incident, we share what happened, how it happened, how to prevent it. That’s a key part. “We also deal directly from the top down. We have an executive summit every year in Calgary. We had over 100 executives from industry come and attend that. We get the executives talking about the current issues in safety, sharing their ideas and experiences.

“We talk about safety culture as a multi-facetted thing. You have to do all these things, and they all have to work together. We’re working on ways for companies to have a strong safety culture, and if there is a gap, how to fill a gap.” There is not an “Enform Manitoba,” but Enform is talking to the Manitoba government about a COR process for that province.

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PIPELINE NEWS October 2014

SaskPower CEO gets to the heart of the matter „ By Brian Zinchuk Regina – Coal-fired power generation has to either change or die, with new regulations to limit greenhouse gas emissions in place in Canada and possibly around the world in the coming years. The Boundary Dam Integrated Carbon Capture and Storage project is the first commercial-scale attempt in the world to tackle this challenge head-on. SaskPower CEO Robert Watson spoke to Pipeline News by phone on Sept. 17 about the project from the corporate level. Pipeline News: The biggest ques-

tion on everyone’s mind is this: $1.3 billion later, does it work? Robert Watson: The good news is, so far everything has gone very well. We’re a bit delayed, but not much. Let’s be frank, a half-year delay is not much for a project of this size. It’s for reasons that it’s the world’s first. There’s things you didn’t expect going into it. We are going to be a bit over budget. We don’t have a final number, but we’re only really going to be over budget because of the power facility, not because of the capture facility. The capture facility is really going to be almost

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spot-on budget. The power facility is up and running. It has been up and running for months. The efficiency is very good. We’ve taken it up to maximum, 160 megawatts. It’s performed very well. We’re going through the process of systematically turning up the capture facility, and it is going quite well. It’s a first time ever, it’s got some glitches, but there’s been no major technical issues along the way. P.N. Mike Monea said at 12:46 a.m. on Sunday they captured their first carbon. Watson: Yeah, we’re trying not to put that out too much to the public yet, but yes, we did. It was in the morning, we captured the first carbon. Now we’re going through the process of commissioning the plant. It will take a while to true-up the plant. It’s a chemical plant. You don’t just turn it on like you do a set of lights. You’ve got to get them operating efficiently. It works, we’ve just got to get the efficiency of it. P.N.: How important is this project to SaskPower’s future? Watson: We think, with the project operating, it gives us options for our coal fleet for the future. We do have a supply of coal we sit on down in the southeast part of the province. It’s available. It’s cheap. If we can prove

the technology that we can capture the CO2 with reasonable economics and either sell it for enhanced oil recovery or permanently store it, it puts SaskPower in a very good position to have very good options to create power for the future. P.N.: If SaskPower had not pursued carbon capture/clean coal, what would its options have been? Watson: With the federal regulations coming in, we would have to start looking at our coal plants, when they hit 50 years, end of life, and start looking at other options. Gas is an obvious one. Combined-cycle gas can easily be put in. We are going to add more wind to the mix. We are looking at some hydro facilities in the far north. We have some very viable options. It wouldn’t be as ready as the coal one, if it works the way we think it’s going to work. P.N.: How long will it take to know whether this has been a success? Watson: We’re going to take our time. We don’t need to do it right away. We’re going to take a good two years to run the plant, run the economics, run the efficiency setting, tweak it a bit. In the meantime, we are going to be doing preliminary designs on the next possible plants 4 and 5 if our economics and technology prove out Boundary Dam 3. ɸ Page A11

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PIPELINE NEWS October 2014 ɺ Page A10 We firmly believe it’s going to prove out. We firmly believe we’re going to capture CO2 by 90 per cent plus, SO2 by 100 per cent, NOX – we firmly believe we’re going to do that. Again, there’s been no technical issues with what we’re going to be doing. You couldn’t go into a world’s first facility with better technical conditions than this one. You either do one, or two at the same time. You have a look at it and do the preliminary stuff so you can make recommendations to our board and the cabinet. P.N.: What is the next step, i.e. Units 4, 5 and 6? Timelines? Watson: With the federal regulations coming in, we have to make decisions for Boundary Dam 4 and 5 by 2020, so we have to start looking at our options now. We would need to be able to come to recommendations to the board by the end of 2016, early 2017 of what our next steps are. P.N: Does that mean you would start construction 2018 or 2020? Watson: The regulations say if you commit yourself to carbon capture, you have as late as 2025 to do it, so we need to make sure it’s the right thing to do, in the 2017-2018 timeframe. P.N.: Those years keep getting stretched out every time I talk to you. Watson: Yeah, I’m happy to keep stretching them out as far as I can, quite frankly. The tangible thing is a recommendation for the future to the board by 2016, 2017. I don’t think I’ve changed that date at all. P.N.: How will you finance future projects, if you decide to go ahead with additional ones? Watson: We would look at all the options. We would look at the most cost-effective option, quite frankly, for our ratepayers. It’s all about economics, about making sure we have reliable, affordable power for our customers, so we’ll look at all options. P.N.: How important was the enhanced oil recovery and sale of compressed CO2 component to this project? What about future projects?

Watson: It’s quite important. The sale of CO2 brings the economics down dramatically. With the sale of CO2, this one and future projects, we think the value of liquid CO2 will go up dramatically. It will add considerable benefits to the economics of the next plants, if we build them. P.N.: You said “liquid.� Is it going to be liquid or compressed? Watson: We’re compressing it into a liquid form. P.N.: CNRL’s president Steve Laut said in May 2012 they were in the engineering stage for CO2EOR at Steelman, yet Cenovus was ultimately the successful bidder for the purchase of Unit 3 CO2. How much of a market is there for more CO2 for EOR? Could future SaskPower capture projects breathe new life into additional old oilfield in southeast Saskatchewan? Watson: You have to talk the oil guys about that, but we think there’s a very good market for millions of more tonnes of liquid CO2 for the long term. There seems to be quite an active market out there, and getting more active. P.N.: The original plan was to have this project up and running in the spring of 2014. Can you address why we are now at this point in the fall? Watson: It was our best intention to be up and running by the spring of 2014, and it was our best intentions to get there. The delay, quite frankly, happened on the power facility. We had to rebuild the boiler. We didn’t expect to. We actually had to rebuild the base of the turbine. We ran into asbestos issues and slowed the entire project down. It was the power facility that caused issues. The capture facility went along very smoothly. P.N.: How much did this cost? Watson: It is going to cost more than the original number. We’re still putting our numbers together. Rather than through all kinds of numbers out there, we’d rather not comment now. We’d rather come up with one number It is going to be more. What I think, it’s not going to be exorbitantly more. It will be at least $1.3 billion. There are still contracts to settle. It’s not fair to come up with a final

number, because it could be inaccurate tomorrow. (Editor's Note: The initial budget was $1.24 billion) P.N.: Given that Boundary Dam is a ground-breaking project, were time and cost overruns expected? Watson: We’ve certainly managed it very closely. I can tell you our project management of this on our side was second-to-none. Did we expect overruns and delays? No, we didn’t, going in. Unfortunately things happen beyond your control, when you’re doing a world’s first. As I mentioned with the asbestos issues: we had already gone in and cleaned the plant and had it certified asbestos-free. When someone says they spotted asbestos, you have an obligation. You cannot contest it. You have to clear the plant and you have to clean it, and have independent testing done. We wouldn’t want it any other way. Quite frankly, we did take a measured approach to make sure we did it right rather than rush it. We wanted to make sure we get it right. It’s more important to get the thing working right than to get it working for the sake of working. P.N.: If there was one thing you could have done differently, what would it have been? (Understanding that we can’t change the weather). Watson: (Laughs) We’ll be able to talk about that a lot in the future. We’ll do a complete 360 on this, a 180 plus a 180 for sure on this project for lessons learned. Going in, the due diligence, the setup, the project management, our partners; it was all good. You run into issues some time with certain partners. But I don’t know. There will be some stuff with certain partners we will change for the next time, but we have to look at that before we comment on it. P.N.: If, a year from now, we find there are significant challenges with this project’s operations, what then? What keeps you up at night? Watson: First of all, we want to be sure we fulfil our obligations to supply the CO2 to our partner, Cenovus, first and foremost. We think we’ll be able to do that, at least, because that not the full commitment. ɸ Page A12

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PIPELINE NEWS October 2014

Looking to Units 4 and 5 in the coming years ɺ Page A11 The second is to true it in. The power unit is now in production. It’s putting money into the bank account. We’re able to get power off that thing. The capture unit is now the thing to be tested. If the capture unit doesn’t perform as efficiently as we expected,

that would be the only worst-case scenario, as far as we can see. P.N.: What do you see SaskPower doing regarding carbon capture a year from now? Five years from now? Watson: A year from now, we’ll have our carbon-capture test facility up and running at Shand, so manufacturers from around world

can come and test their post-combustion carbon capture technology. We will be testing and verifying our permanent storage at our Aquistore well that we have done, and we will be supplying liquid CO2 to Cenovus for enhanced oil recovery. A year from now we’ll be not only in full production mode, but in

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testing mode with storage of CO2, sale mode for selling CO2, sale mode for selling sulphuric acid, and flue fly-ash. By this time next year we’ll have an entire business model on how we’re making money on this plant, more than just selling power. Five years from now we’ll be hopefully preparing for the next plants, planning for building. I think it becomes a viable option for consideration of carbon capture power plants in the future. P.N.: In a 1992 speech, your predecessor, former CEO George Hill noted that when Poplar River Unit 2 was built, “Between 1975 and 1981 over 206,000 days were lost to labour relations issues.� When Shand was built, “from 1988 to August 15, 1991 there were only about 2,500 days lost due to labour issues.� We haven’t heard of any labour disruptions with BD3. Have there been any labour issues on this project, other than a shortage of skilled workers?

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worked together to get this done. Like any major project, there’s some disagreements. We will work them out. But we’re not going to stop working on the project just because there might be some issues we’re going to talk about later. SNC was the general contractor. Hitachi installed the turbine direct. We had some small contracts. P.N.: How many people were there at peak? Watson: About 1,500, maybe as high as 1,800 (including SaskPower and external). P.N.: Is there anything you would like to add? Watson: We have gone over 4.5 million man-hours without a lost-time injury on that project. It’s an astounding accomplishment by all the contractors, employees and management down there. That is an incredibly great number. We’re very proud of that number, and we’re going to celebrate it. It’s a fantastic number.

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Watson: I can tell you our working relationship with both our collective units, IBEW and Unifor is excellent. We have a great working relationship with them. They’re great unions, very progressive. No, we’ve categorically not had an issue with any of our employees with any of our plants throughout the corporation, since I’ve been here for sure. I’ve been in Saskatchewan for 10 years now, and I can tell you the unions are very progressive. There’s angst, of course, between unions and management, but it’s a good angst. It’s not negative at all. Both groups, management and in-scope union people really want to make this a good place to live. P.N.: How did your general contractor, SNC-Lavalin, do? Watson: They did well, general contractors. We have some ownercontractor things we have to resolve, you know, but we’ve set those aside. Both companies, SaskPower and SNC have

PIPELINE NEWS October 2014

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A very special turbine Estevan – Power plant turbines have been around for a very long time. But to work with a first-of-its-kind commercial scale carbon capture plant, Hitachi had to come up with a turbine that was also a first-of-its-kind. Corwin Bruce, Saskpower manager of CCS Initiatives, power island, explained just what makes this turbine so special. Pipeline News: A special turbine was used for this project. What makes it different from a typical coal-fired power plant turbine? Corwin Bruce: The turbine is designed with a very large steam extraction line. This steam, which is at a low pressure as it has already produced a large amount of electricity, is piped to the carbon capture plant to be used as part of the CO2 capture process. The turbine is designed so that it can run continually regardless of whether this steam is being used or not. P.N.: How important has Hitachi’s partnership been in the design of this project? Bruce: Hitachi was

a fundamental partner in the complex and iterative process of optimizing the design of the plant, making adjustments to their design a number of times before the final design was achieved. P.N.: First-of designs can have teething issues. This turbine has been running for a few months now. Has anything significant come up? Bruce: The turbine has been running extremely well in full power plant mode since it was originally started up. The integration with the capture plant process has also been without issue so far. P.N.: Did the turbine’s operation change at all once the capture island was up and running? Bruce: The turbine’s operation is designed to change when the capture plant is started. The turbine operated as was anticipated when the capture plant began using steam. P.N.: Is there anything you would like to add? Bruce: For being one of the most complex

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A14

PIPELINE NEWS October 2014

Making the big decision: Premier Brad Wall „ By Brian Zinchuk Regina – As a Crown corporation, SaskPower’s decision making process involves not only the company, but its shareholders, the people of Saskatchewan by way of the government of the province. When it came down to the big decision of going ahead with a “clean coal� project, it was the provincial government that made the final call. Pipeline News spoke to Premier Brad Wall by phone on Sept. 15 about the importance of this $1.3+ billion project, and the thoughts behind it. Pipeline News: How important is the Boundary Dam carbon capture project to Saskatchewan? Brad Wall: A couple things: It’s important because it demonstrates we’re serious in Saskatchewan about CO2 mitigation. In fact, on a per capita basis, this, I think, is the largest investment in clean coal and therefore CO2 mitigation when it comes to energy production that I am aware of, period. It gives us some frankly bona fides, to say to our trading partners on the energy issue that we’re serious about this thing. You don’t just have to take our word for it, look at what we’re doing at Boundary Dam 3. From the long term strategic interest of the province, it gives us another option, because the next generation of

this technology is going to get more and more affordable. We have a lot of coal, as you know. It gives a chance to deploy all of our energy resources to generate cost-effective energy which is foundational to our growth plan. Coal is part of it still. P.N.: Assuming everything runs well, what does this mean for the province going forward? Wall: It means again that coal is in play in Saskatchewan. We can clean it up so that it is significantly cleaner than combined-cycle natural gas. We’ll capture 90 per cent of the CO2. It means we’ll have CO2 for more enhanced oil recovery which has an economic benefit of jobs, (with) the continued animation of old wells. It has the environment benefit, because we’re not drilling new wells to get at oil. It has a fiscal benefit because the royalties the province makes from enhanced oil recovery are significant. Those are great reasons why this is a big deal for Saskatchewan. It keeps coal in play. Coal is still the most cost-effective source of energy for the province. It will lead in the future to enhanced oil recovery. The beauty of this technology is there’s no contrivance. There’s no artificer of moving the CO2 around,

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I met privately again with a small committee of the board, some of our SaskPower board - it is great today and it was then a great board. I was very concerned. The chairman at the time, Joel Teal, put me in a room with people on the board that had originally “been from Missouriâ€? on this thing, or even more skeptical than that, had, after all the due diligence, come to the belief that we needed to do this. We could do it, it would work, and we needed to. That was the final meeting for me, anyway. Then it went back to cabinet for another robust, broad discussion and then final approval. It was a number of times it came there. The final decision came because we talked to all our engineers, we talked to external people about this thing. We had a lot of due diligence. We looked carefully. There was still risk. Until the thing is on in early October, there’s still risk, but we think it’s an important one to take for the reason we mention in terms of leadership and in terms of giving some life to coal and reducing Saskatchewan CO2 emissions. P.N.: Are you comfortable with that decision now? Wall: Yes, I am. We’ve gone through a year where we’re a few months behind commissioning, of going live, but they’ve been testing it, but I’m very comfortable with the new technology parts of this. There were some costs on the old part, frankly, with asbestos and related to old technology and old buildings. But on the capture island, the new technology came in on-time and on-budget, and I don’t get to say those words often enough in government, I’ve found. P.N.: The federal government changed the rules regarding greenhouse gas emissions, making carbon capture essential if one wants to continue burning coal for power generation. How important was that policy change in the decision to go ahead with Boundary Dam Unit 3? Wall: We made our decision prior to the new coal regs coming out. We’re comfortable with the regs. We still work with the federal government. What was originally proposed, it would have gone a bit too far, we think, for our economy. You can’t improve the environment by knee-capping an economy by driving energy costs. ɸ Page A15

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cap-and-trading it, shifting it. The companies are buying it. Your readers will know it is among the best solvents in enhanced oil recovery. There is an intrinsic value to that. That’s why I like it. It even appeals to those who, for whatever reason, aren’t excited about the CO2 mitigation file, because there’s an underlying economic case beyond coal and heading towards enhanced oil recovery. We had a competitive process. We had more than one company that wanted to buy the million tonnes of CO2 per year from Boundary Dam. It was not only a competitive process, but there was immediate interest in buying the CO2. Legislators around the world view CO2 basically as a pollutant. We’re getting paid for it in Saskatchewan because of this clean coal project. That’s a positive thing. P.N.: Where does this put Saskatchewan on the world stage when it comes to greenhouse gas emissions? Wall: As far as I know, it’s the largest per-capita investment. It shows we’re serious about the issue. The United States is still, what, 35 per cent per cent reliant on coal? China is opening new coal plants. It shows the world that you can be interested in coal, and as long as you’re in reasonable proximity to geological storage and oil production, and frankly that occurs in more parts of the world than people know, then coal’s very much in the game. Technology transfer is an opportunity to make some money from this project. It does put us on the map. P.N.: Being the first is never easy. What was the deciding factor when this came before cabinet, when you had to make the go/no go decision? Wall: The truth is, I’m sure if I’ve ever mentioned this, it came back (to cabinet) more than once, just because of the size of the investment, even after the federal government was in for a quarter billion dollars. We obviously were in for the lion’s share through SaskPower, so we asked it to come back many times. We understood the magnitude of the investment, how much money it meant, what it meant to SaskPower. We have a Crown corporation that we wanted to have a debt:equity ratio to be healthy and to provide affordable power in the long term. It came back several times. Then

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PIPELINE NEWS October 2014

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“Legislators around the world view CO2 basically as a pollutant. We’re getting paid for it in Saskatchewan because of this clean coal project.” - Premier Brad Wall

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ɺ Page A14 We worked on that a little bit and are comfortable with what came out. Now our coal regs are more aggressive than the American coal regs, but there’s a sign from the EPA (Environmental Protection Agency) down there that they’re coming at it with a more aggressive approach. It gives us a market. It’s why, I say, it’s interesting, the David Wilkin’s firm is in the news today. That’s our agent down in the United States. They were able to get us to be part of a Senate symposium on Capitol Hill in March on clean coal, sponsored by three Democratic senators, led in no small way by Heidi Heitkamp, from North Dakota. What was very interesting from that symposium, and what’s followed up since, is the amount of interest. All these senators and House of Representatives folks from coal states want to continue to generate coal-based energy, and are very enthusiastic and encouraged. Heidi Heitkamp was up to have a look at it, and has been a strong proponent of it. We’re off to a good start, notwithstanding the start-up here in a little bit. P.N.: Can Saskatchewan get by without

coal-fired power generation? Why can’t we just buy renewable, clean hydro power from Manitoba Hydro? Wall: I think you want a little bit of energy independence, having a mix of energy sources, one especially that we control, having decades and decades of coal left to go. Having that kind of diversity is good for an economy in the long term. We’re looking at buying hydro from Manitoba in the long-term to a greater extent than we are. We’re also looking at natural gas, still, but coal needs to a part of the mix. P.N.: How much money did the province put into the project? Was this strictly CIC/ SaskPower money, or did any general revenue fund money go into it? Wall: No general revenue funds went into this. It was all from SaskPower, and therefore from CIC. For the last few years we have required no dividends from SaskPower, in part because of this very large project and also in terms of the longer-term health of SaskPower. They’ve also, at the same time, serendipitously or otherwise, had to focus on infrastructure build-outs, quite separate from coal.

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P.N.: What difference did federal investment in the project make? Do you expect any further federal money on future, similar projects? Wall: It made a huge difference, and I’m not very optimistic (on future federal money). When the feds see it working like it’s going to work, that might renew interest.

P.N.: There’s hope, you’re saying? Wall: There’s that line from Dumb and Dumber, “So you’re saying there’s a chance…” P.N.: In dealing with other jurisdictions, particularly the United States, does having this project equate to having an ace up your sleeve? Does it give Saskatchewan a position of strength to bargain from? Wall: It does. I’ve been saying, when we’re down in the United States on Keystone, even,

we should reference projects like this. This particular administration, they want some environmental elbow room from the different environmental NGOs that hate, that don’t like Keystone. They need some environmental elbow room to quote-unquote “deal with the Canadians.” That pipeline is definitely a deal with Canadians. We’re able to go down, and have been going down, saying, “Look at the project, because in your coal states it might have an application. But

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also look at it as validation that we’re serious about the environment, and tell those worried about Canada in general, they ought not to. In Canada, this is the largest per-capita project related to CO2 mitigation.” I think it helps on that front as well. There is a lot of interest. They have a lot of coals states there with Democratic governors, Democratic Senators, that would like to be able to point to some reason for hope that coal is still a possibility.

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A16

PIPELINE NEWS October 2014

NDP isn’t convinced clean coal is worth the money, or that it will work „ By Brian Zinchuk Saskatoon – Not everyone thinks the investment into carbon capture and clean coal is a good idea. Official opposition environment critic Cathy Sproule, the NDP MLA for Saskatoon-Nutana, spoke to Pipeline News on Sept. 22 about the opposition’s concerns. Pipeline News: The Boundary Dam carbon capture project is nearing completion and is supposed to be having its grand opening Oct. 2. What are your thoughts on this project? Cathy Sproule: Well,

we’re becoming increasingly concerned about this particular project. We see the timelines keep dragging on. We know the costs keep mounting, and there are a lot of unanswered questions. We’re concerned about that. We haven’t seen a viable commercialization plan yet. We feel this government has been very secretive. We know there’s been about $1.4 billion spend on the project already, maybe even more than that. We want transparency. We think Saskatchewan people deserve

transparency, and there should be much more disclosure on the moneys. That’s not to say we want this to be successful, especially because we have put so much money into it as government. Also (there’s) the potential of this technology. But we need to see evidence that it isn’t being mismanaged. Right now we’re not seeing that, and that’s why we’re becoming increasingly concerned. P.N.: Assuming everything runs well, what does this mean for the province going forward?

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Sproule: It’s hard to answer that. There’s just so much we don’t know about this project because of the secrecy the government has shrouded it in. Of course, if the project is successful, and if we can replicate this technology much more efficiently, then the initial project cost, and if we’re able to commercialize it, and have SaskPower make money off that to make back the $1.4 billion, then that would be a good thing. What we know so far isn’t that promising. Other jurisdictions have abandoned their CCS projects because of the huge initial costs. The Alberta government was going to spend $2 billion over 15 years for five experimental CCS projects, but they’ve cancelled one after another because of the huge costs involved. The new Alberta premier ( Jim Prentice) has said he wants to move away from putting large public investments into CCS. He calls it “a science experiment,� and says you can’t view that as a magic bullet. I think the NDP, the official opposition, the auditor, and the public have to see the details and the commercializa-

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tion models so everybody can determine we’re getting value for our money. P.N.: This project came not long after the previous NDP government passed on a muchmore expensive “clean coalâ€? project at Shand Power station. Should “clean coalâ€? be part Saskatchewan’s future? And do you feel it is “clean?â€? Sproule: Those decisions were made before I entered politics. What I understand is at the time, the government decided it was just too expensive and the technology wasn’t commercially viable, and that’s why they decided not to put that kind of money into an experiment for “clean coal.â€? In terms of whether it’s “cleanâ€? or not, that is yet to be seen. They say they’re going to reach 90 per cent reduction of carbon into the atmosphere. Whether or not that’s going to happen ‌ In Alberta they’re saying it would be about 10 per cent. Again, there’s so much that remains to be seen here. Then, of course, if it is effective, and gets cheaper, then we could see it as part of Saskatchewan’s future. It’s a big if, and it’s a big risk I think this government is taking. Whatever the final cost is going to be, all we’re going to do is reduce emissions by one megatonne per year, and it will produce 110 megawatts. It’s really costly at this point. As far as being part of Saskatchewan’s future, for that kind of money, Saskatchewan could have done other diversified projects, especially in smaller, distributed renewal projects. That’s what we would like to see in the future, reducing our reliance on coal and looking at hydro, biomass, all those things. The other thing we’re seeing a complete reversal on is demand-side management. There used to be a number of go-green initiatives to conserve power, and those are basically gone. P.N.: Our population has increased by 10 per cent in recent years and is rapidly increasing by another 10 per cent. You can’t turn on another light bulb by

conservation when add 20 per cent population. Sproule: That’s for sure. That’s definite. But it doesn’t mean we shouldn’t try to reduce the use. Conservation is a big part of moving forward. I’m not saying if you and more people, you won’t need more power. But demand-side management is a big piece of the whole picture, and we’re not seeing that right now. P.N.: Can Saskatchewan continue to develop its coal resources without carbon capture technology? Should we be using coal at all? Sproule: I think we know new federal regulations are coming into effect next July, that any new power plant will have a performance standard put in place. There will be standards on existing plants when they’re retrofitted. SaskPower acknowledges they (the new regulations) could eliminate conventional coal. It is not an a generation option for the future. If CCS works, and that’s the big if, if it works then coal could be part of Saskatchewan’s future. But to reiterate: $1.4 billion to reduce our emissions by one megatonne, less than two per cent of emissions, seems really expensive. P.N.: If it works, should we look at replicating carbon capture on Units 4, 5 and 6 in the coming years? Sproule: Again, it’s something we’re going to keep a very close watch on. It’s a big if, if it works. We hear from SaskPower there won’t be any decisions until 2016 once they get this up and running by 2019. So, maybe this particular $1.4 billion experiment might be worthwhile to outfit those units, but we won’t support it until we know it’s effective and the costs come way down. We really want to see a value for money performance audit of this project and we need to understand a return on investment will be over the mid-term before we can answer what should happen next. To suggest otherwise would be irresponsible. ɸ Page A17

PIPELINE NEWS October 2014

ɺ Page A16 P.N.: Couldn’t we just buy renewable, clean hydro power from Manitoba Hydro? Sproule: I think we should. That’s definitely part of a diversified supply mix. We need more renewables

Carbon capture on a global stage „ By Brian Zinchuk Estevan – When it comes to carbon capture, Michael Monea, president carbon capture & ctorage initiatives with SaskPower, has been leading the charge. Over the years this had involved a lot of international collaboration in addition to the work in Saskatchewan. Pipeline News spoke to Monea on Sept. 17 via telephone a couple days after the capture plant had captured its first CO2. Here are his responses. Pipeline News: You have spent a lot of time over the years taking part in the broader international carbon capture field. Where does Boundary Dam place in comparison to other countries and projects? Michael Monea: It depends on what you look at. Our project is the world’s first post-combustion commercial plant in the world. Right now there’s some capture plants in a pilot stage, collecting a few tonnes a day. I think Project Barry , in the United States, has a Mitsubishi pilot plant, but that’s just what it is, a pilot plant. Nobody has built what we’ve built here. We are getting incredible recognition from that from any country that is dealing with coal or trying to clean up coal. P.N.: What is the next big project on the horizon beyond our borders? Monea: The big one is a gasification project, Kemper County, being built by Southern Electric and Mississippi Power, in Jacksonville, Mississippi. It’s big. It’s a 600 megawatt plant. It’ll be operational by about mid-2015. Gasification is a very different process from what we’re doing. There are differences. One is SaskPower has chosen not to own the technology of capture, and I think that’s very smart. That way, we can stay independent, and have any new capture technology coming to us to show us what their technology can do. At Kemper County gasification project, Southern did have some

of their own technology, and that’s what they’re using. Like any large plant, they’re a little behind schedule and over budget. But when you’re building the world’s first plants, that’s what happens. We looked at gasification here, and Capital Energy out of Alberta was going to build a gasification plant, but they found the costs were just too high. It was well over $200 per megawatt-hour. P.N.: Was that the oxy-fuel at Shand 2? Monea: Shand 2, SaskPower looked at an oxyfuel application, but it didn’t really fit very well. The technology was too new. By the time we got in the cost of construction, it just didn’t fit. The timing was too new. I joined SaskPower in 2008, and a year before that, SaskPower decided to do a rebuild and postcombustion approach, rather than oxy-fuel. There’s some misunderstanding that we downsized from an original project with oxy-fuel. That’s not true. We looked at the technology and decided not to use it, so we moved onto another technology. P.N.: Much talk has been made over the possibility of monetizing our knowledge in this field. How do you see that happening? Monea: Right now, we’re waiting for some direction from our government on how they want to do that. What SaskPower is doing is presenting options to our board of directors and to the government. What we do know is we have knowledge on construction and integration that nobody really has. Nobody’s built these plants before. That’s a great asset. Then we have knowledge that’s coming out of the plant itself that other companies need from the process information of what is happening. ɸ Page A18

have rather seen that money go elsewhere? Do you think we would have seen that money if we had not gone ahead with it? Sproule: Obviously it’s a good thing when the federal government works co-operatively with provinces on any initiative. That’s a good thing when we see federal dollars coming into Saskatchewan. We know they’ve also supported other projects like hydro in other provinces. This is what the federal government does. I don’t think we need to assume, if we didn’t have a coal-related project, we wouldn’t have gotten money. If we had gone for a different take on this, we hopefully would have received federal infrastructure money. P.N.: Does having a clean coal project give Saskatchewan an advantage when dealing with other jurisdictions on greenhouse gas emissions? I would say unfortunately, not really, because we know carbon capture is not a silver bullet. It only really reduces carbon by one million tonnes in Saskatchewan. That’s 1.4 per cent of our total emissions. This is only dealing with a very small part of the problem.

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Saskatoon-Nutana MLA Cathy Sproule is the NDP enviĆŒŽŜžÄžĹśĆš Ä?ĆŒĹ?Ć&#x; Ä?͘ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ĆŠ ĞĚ

in our system, clearly, partly because we need to move away from conventional coal. We know the federal regs are going to dictate that, and we need to ensure we have enough baseload. Natural gas is obviously another option, but there’s nothing wrong with putting in hydro in as part of our baseload. I understand next November, SaskPower is going to start importing 25 megawatts. It could go up, for sure. There’s no reason why we couldn’t do our own distributed projects in Saskatchewan. That’s an important message to get out. There is an economy there that can be created of diversified renewable projects that are much cheaper than $1.4 billion. P.N.: What do you think of the business case behind this project? Sproule: It’s hard to say much on that point, other than we don’t have an idea. We know they’ve been very secretive, and we think that’s unnecessary. There’s a lot of public dollars here. There should be disclosure. P.N.: The federal government contributed roughly a quarter-billion dollars to this project. What that a good play on their part, or would you

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PIPELINE NEWS October 2014

International interest means lots of invitations ɺ Page A17 Then we have knowledge on what we believe that we can build the next capture plant 20 to 30 per cent less expensively. That’s significant. We have a lot here. On Oct. 2 and the two days prior to that we’re having a symposium. We will be bringing a concept of a consortium where companies can join this knowledge-sharing network. That’s what we’re going to announce and see what the appetite is for different companies and countries to join what we’re doing here. We have a CCS centre in Saskatchewan. We have two capture plants – the big Boundary Dam and the test facility we’re building. We have EOR experience through the Weyburn-Midale field that the PTRC has studied locally, and we have what will probably be one of the world’s most-studied storage projects (Aquistore). It’s all sitting here. Collaborating with the University of Regina and other universities is very important. It would be a shame not to figure out how to monetize the learnings. Two things will drive the world to capturing carbon. One is regulation by government, and the second things is countries and companies that want EOR need CO2, and to get CO2, you have to capture it. That’s what’s driving the carbon capture market right now. P.N.: What sort of international interest has there been to this point, and what do you foresee in the future? Monea: I probably get an invitation a week to speak somewhere internationally. It’s quite flattering. We have 22 to 24 countries coming to our grand opening and symposium. It’s a high level of interest. The countries that are most interested to me are Norway, the U.K. and certainly China and Japan. There’s a tremendous amount of international interest. P.N.: There’s a new SaskPower billboard east of Estevan which talks about the reduction of greenhouse gases and an equivalent number of cars taken

off the road. Does Saskatchewan have any realistic chance of reducing greenhouse gas emissions without a carbon capture strategy? Monea: The best way to capture greenhouse gasses right now is to use your coal plants that are large point-sources and capture the CO2 off those plants. There needs to be some work done on the federal regulations that are currently in place. That will happen. One, the regulation must reflect reality a bit better. Right now the emission is set on a stack, that’s kinda funny. We’d like to see it more on a plant, because you might want to combine one or two or three stacks and make it one big plant. Also, the harmonization of environmental laws between the province and federal government need to be finalized. There’s a lot of people working hard on that, but that needs to evolve. CCS will play a very important role in reducing our footprint. The government Ministry of the Economy is looking at the reduction of flare gas, for example. Methane is 20 times more harmful than CO2 on emissions. The government is trying to figure out how to encourage the industry to collect the flare gas and selling it as natural gas rather than flaring it on site. P.N.: While capturing CO2 from coal, and therefore dramatically reducing emissions, that CO2 is then going to be used to produce oil, which will increase greenhouse gas emissions. Can you explain the math on this? Are we actually reducing overall emissions or not? Monea: That’s called life-cycle costs on CO2. Those are two separate issues. One is capturing CO2, the other is using CO2 to bring oil out of a reservoir. When you combine them together, then people say, why are you doing this? Why not just get rid of coal and not make CO2, and then you don’t have to put it into oilfields and make more oil. My answer to that is we are still a hydrocarbonbased economy. We still drive a lot of vehicles. We

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use a lot of hydrocarbons. If Saskatchewan does not exploit its resources better, we would have to import oil. Is it better to import oil or use our own oil? That’s a real fundamental question. When you want to dig down even deeper, you say, if you have to import oil, where do you want to import your oil from? The Middle East? Nigeria? Or do you want it from Saskatchewan? When Saskatchewan creates more oil, it creates more jobs, more money, more royalties to the government that helps our province. Yes, because you’re burning hydrocarbons, which you would be doing anyway with important oil, there’s more impact. But they’re two separate issues. P.N.: What was the biggest challenge, from your position, to making the Boundary Dam Unit 3 project a reality? Monea: The best thing we have come out of Boundary Dam, not only the success of capturing carbon, which is significant, is putting together an elite team of engineers on the project to do the full integration, and to work with almost hundreds of subcontractors to make everything work together. ɸ Page A19

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PIPELINE NEWS October 2014

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ɺ Page A18 With that, you have to have all your legal contracts in place. You have to have complete buy-in by the executive of SaskPower, by the board of SaskPower, by the government, by our minister. That’s a tremendous amount of moving parts. I gave a talk in Washington one time at a conference where sometimes our project was sometimes minimized because it was being developed in Canada. When I told the audience how the government had worked with the Crown corporation and subcontractors and how we worked with industry with EOR, it really happens when you make all that work. All those groups coming together made it happen. That was part of the magic of what happened here. The moderator said, “Well, that’s interesting, what happened in Canada, but we’re waiting to see what happens in the United States. I think the Canadians got a little lucky because their stars lined up.” I talked right after that. I said, “If you want to build one of these projects, here’s what you do – you line your stars up. They don’t line up themselves.” That’s the big difference of what happened here. We have a premier, we’ve got a government that supported this project, and by God, not many countries are doing that. That’s pretty amazing. We get a lot of requests from governments when we talk, saying, “Can we meet your premier so we can find out how he allowed this to go ahead, what the public perception was, what the people thought of capturing carbon and storing it in the ground?” We’re very fortunate, but we worked hard at it. We really did. We have good people, with very good goals, and it allowed the project to go ahead. P.N.: There was a lot of talk when this was first proposed that Saskatchewan would become a centre of excellence on carbon capture, given SaskPower’s work and that of the PTRC. Where are we on that front? Monea: We are. It is. We have two capture projects, BD3 and CCTF tor the utility. On CCS we have the Weyburn field taking the CO2, and on the storage side, we have the Aquistore project, run through PTRC. It’s all here. What we’ve done is not be so vocal about it, but what we’re working very closely with the University of Regina to join up some laboratory services and research, and that’s working very well. We’re also linking up with other

universities around the world that are specialists that want to teach degree programs in carbon capture or engineering programs in carbon capture. The University of Edinburgh is an example. Australia, Germany, we’ll link that up. We haven’t been able to spend a lot of time on it right now because we’ve been trying to get this plant up and running. But the whole platform is ready to expand, and I’m hoping people will be able to come and realize and see that Saskatchewan is a carbon capture centre. What you have to realize is that everyone wants a centre, and there are centres all over the world. But they don’t have anything to talk about, because nobody is building much of anything. We were very careful that when we set up our centre, it is very SaskPowercentric. It’s Saskatchewan-centric. We will link up with other provinces, but this project is the cornerstone. P.N.: SaskPower has said that through lessons learned on this project, they could make the next one less expensive. Can you explain? What would you do differently? Monea: There’s many things. Full integration was thousands of parts that have worked elsewhere, but never together at this size. It’s the configuration of the equipment, maybe more efficient equipment put in, economies of scale would be critical… The CO2 absorber we built, for example, was built bigger than what we estimated was needed, because we didn’t know the efficiency rate of the amines. So the next one we build will be tailored for a specific amine, so it will be sized properly in every aspect. Our point is, it would be horrible to have your vessel undersized. You want to make sure you have enough capacity that you have extra capacity, if needed. On the other hand, we didn’t know if there would be a market for the full CO2, so our engineers designed it (to be able to) really turn down the plant, so it could capture 50 per cent if needed to. We were even talking originally about two compressor trains. Now we know that’s not necessary. We will make 100 per cent of CO2 and liquefy it because there will be a need for it. It will be a much more efficient operation. And really, it’s good engineering. We also expect the next generation for solvents will be an improvement

also. That, all combined, will really drive the costs down. I firmly believe we need many of these demonstration commercial sites so the price can keep dropping down and down and down. Your equipment may become more efficient getting built. We may even get pieces built in other provinces and other countries to help in time and money on different panels or modules. P.N.: Is there anything you would like to add? Monea: Looking back, I can’t believe we had such cooperation and collaboration from so many people in the province to make this happen. I come from the oil industry, and we usually see pretty good collaboration in the oil industry. But when you take a Crown corporation, and have them

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build the world’s first plant, wow, that’s incredible. I have to say the engineers at SaskPower are some of the top engineers in the world. I don’t know how we could have done it without the calibre of people in this operation. We have people that moved out to Estevan because we were having problems, and they went there, out of hotel rooms and trailers, to make this happen. This whole plant was built by a lot of people and a lot of subcontractors that put their heart and soul into it, and I think are now being recognized for what it is, a success. We’re looking forward to our grand opening on Oct. 2 to make our announcement to the world. We said we would do it, and we did it.

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PIPELINE NEWS October 2014

How do you capture CO2? „ By Brian Zinchuk

This massive pipe runs from the top of the SO2 Ä‚Ä?Ĺ˝ĆŒÄ?ÄžĆŒ ƚŽ ƚŚĞ Ä?ŽƊŽž ŽĨ ƚŚĞ K2 absorber, the structure in the centre. Photo by Brian Zinchuk

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Estevan – How do they capture carbon dioxide? The answer involves a lot of heating and cooling, gravity, stainless steel and amines. The people at SaskPower like to talk about “islands,� such as the “power island� and the “capture island.� In the case of the Boundary Dam Integrated Carbon Capture and Storage Project, the power island is the turbine, generator and boiler in the main power station, while the capture island is the chemical process plant that does the magic that is now getting all the attention. It is supposed to capture approximately 1 million tonnes of carbon dioxide each year. The capture island made up the bulk of the over $1.3 billion spent on this project. (Final numbers have not been released yet. The initial budget was $1.24 billion.) What may not be commonly known is that this capture plant not only captures carbon dioxide

(CO2), but also sulphur dioxide (SO2). The volume of CO2 is many, many times that of the sulphur dioxide, such that a 10-inch pipeline will run continuously to carry the volume of CO2, while the end sulphur product will be picked up on a periodic basis by a semi. While the proportions of end product are substantially different, the sulphur process train is not that far off in size from that of the carbon process train. The flue gas enters the capture plant from the south end. Whatever gases (nitrogen, water, and other trace gases) which are not captured are released from the pyramid-shaped top of the tall CO2 absorber on the southwest corner of the building. The exhaust port is substantially smaller than the massive smokestack it is replacing. Proceeding north through the building there are two process trains, with the CO2 on the west side of the building and SO2 on the east side. The process trains themselves are a maze of stainless steel pipes, pumps,

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massive heat exchangers and as huge amine storage tanks. Strict controls on intellectual property mean that pictures are not allowed in many areas of the capture plant. Such pictures could reveal proprietary information such as the layout of process systems and the sizes of tanks. A second building to the north contains the massive compression system which then sends the final CO2 down that 10-inch pipeline, destined for either the Cenovus-operated Weyburn Unit or the nearby Aquistore injection well, a couple kilometres to the west. Keith Hill, senior engineer, responded to our questions on the capture island. Pipeline News: Can you explain the process of how the carbon capture island works? Let’s start with the turbine. Keith Hill: The steam turbine was specially designed to a continuous low pressure source of steam for the capture plant while also providing the high pressure steam which is used to generate electricity. All of the flue gas from the coal fired boiler is routed to the capture plant where it is first cooled and then passed through a sulphur dioxide (SO2) absorber where the flue gas comes in direct contact with a proprietary liquid amine which captures all of the SO2 from the flue gas. ɸ Page A22

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PIPELINE NEWS October 2014

Amines are used to capture both CO2 and SO2

Somewhere buried in that mass of pipes is the compressor, which will ship the carbon dioxide down a 10-inch, 72 kilometre pipeline to the Cenovus-operated Weyburn Unit. Photo by Brian Zinchuk

Éş Page A20 The SO2-laden amine is pumped to a desorber where steam is used to remove the SO2 from amine. The amine is pumped back to the SO2 absorber where it is used to capture more SO2. This SO2 process does not pro-

duce any waste which is quite different from most coal fired power plant desulphurization units as the captured SO2 stream is not released to the environment. It is used as feedstock for an onsite sulphuric acid (H2SO4) plant to produce acid

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which is sold to industrial customers. The flue gas leaving the SO2 absorber enters the carbon dioxide (CO2) absorber. In a similar process, the gas flows upwards through the absorber and comes in direct contact with a different proprietary

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liquid amine which falls down through gas-liquid packing which captures approximately 90 percent of CO2 from the flue gas. One hundred per cent of the SO2 and 90 per cent of the CO2 is removed in the absorbers while the remaining gases (primarily N2, H2O and the remaining CO2) are exhausted to the environment. The CO2 -laden amine is pumped to a CO2 desorber where the low pressure steam from the turbine is used to remove the CO2 from amine. As with the SO2 system, the CO2 amine is pumped back to the absorber where it is used to capture more CO2. The CO2 stream leaving the desorber is dried and compressed to approximately 2,500 psi prior to entering the pipeline for transfer to our off-taker (Cenovus) where it is used for enhanced oil

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recovery. P.N.: How does it get from the power station to the capture island? Hill: Boundary Dam Unit 3 had an existing flue gas stack. In order to redirect the flue gas to the new capture facility a 1200-foot duct was installed to get the flue gas feed to the capture facility. Process piping (water, process steam, heating steam) was routed alongside the duct. P.N.: What is the first thing that happens in the capture island? Hill: Once the flue enters the capture plant it is cooled as the proprietary amines have specific temperatures at which they are most efficient. Meeting these temperatures ensure that the capture process can be operated at peak efficiency which reduces the overall cost of capture. P.N.: One of the largest components is the CO2 scrubber. How does it work? Hill: The CO2 absorber is the largest piece of the capture plant. The flue gas enters the bottom of the absorber which contains gas liquid packing (metallic structured packing which provides a lot of surface area for gas to liquid contact). The CO2 amine is pumped into the top of the absorber where it falls by gravity to the bottom of the absorber. As it falls down and travels through the packing it comes into contact with the gas stream rising up the absorber. This gasliquid contact provides the amine with time to absorb the CO2 from the flue gas stream. One hundred per cent of the SO2 and 90 per cent of the CO2 is removed in the absorbers while the remaining gases (primarily N2, H2O and the remaining CO2) are

exhausted out the top of the absorber to the environment. P.N.: What is amine and what is the significance of amine to the process? Hill: The amines are key to the process as they are regenerated and used over and over again to remove our SO2 and CO2. Cansolv Technologies provided the technology for our capture facility. They also provide the amines which are proprietary to Cansolv and protected by patents. We are confident that these amines are environmentally safe and energy efficient. P.N.: How does the SO2 scrubber work? Hill: The SO2 absorber is very similar to the CO2 absorber, only smaller. It, too, is a gas liquid contact absorber only smaller since the quantities of SO2 in the flue gas stream is significantly less than the mass of CO2. P.N.: What happens with the captured sulphur? Hill: (It) is converted to H2SO4 which is used elsewhere in the power plant or sold to industrial customers. P.N.: Does this provide an additional revenue stream? Hill: Yes it does. It also has an environmental benefit as the captured SO2 does not need to be disposed or released to the environment. P.N.: What sort of compression system is in place to pipeline the resultant CO2 to Cenovus? Hill: The compression train consists of one integrally geared compressor complete with a desiccant dehydration unit. The compressor is designed to provide CO2 at approximately 2,500 psi to the Cenovus pipeline.

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PIPELINE NEWS October 2014

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Constant theme: Heat Estevan – While going through both the Boundary Dam carbon capture plant and the Shand Carbon Capture Test Facility, one soon realizes there is a constant theme: heat. Heating and cooling amine to capture and then reject carbon dioxide is key to the whole entire process. At Boundary Dam, this includes drawing steam off the purpose-built turbine and using it in the capture plant. While numerous processes are used to maximize the use of heat wherever possible, at some point, the leftover energy must be removed from the system, or rejected. As a result, a large cooling tower, similar to the one used at the Shand Power Station, was built south of the Boundary Dam carbon capture facility to contend with excess heat. Brent Jacobs, senior engineer with SaskPower, responded to our questions about the heat rejection system at Boundary Dam. Pipeline News: Boundary Dam takes its name from the dam used to create a reservoir of cooling water. That reservoir is warm enough to maintain a population of bass fish. With Units 1 and 2 now retired, why couldn’t you simply use the reservoir for cooling of the new carbon capture process? Brent Jacobs: Additional cooling to the Boundary Dam reservoir was not possible without further impacting the temperatures in the reservoir and the retirement dates for BD1 and BD2 were not certain at the time the BD3 ICCS Project was designed. The heat rejection solution therefore had to allow for a period with the continued cooling of the BD1 and/ or BD2 units along with the new capture system on BD3. P.N.: How are you dealing with excess heat? Jacobs: The new cooling towers installed as part of the BD3 ICCS project will reject all of the heat as required by the CO2 capture system. P.N.: Does the new cooling tower only deal with excess heat from the capture process, or from the power plant as well? Jacobs: The new cooling towers reject heat only from the capture process, but the amount of heat rejected from the existing BD3 will be significantly reduced due to the transfer of low pressure process steam from the steam cycle of the existing unit to the capture process. P.N.: Could an organic Rankine cycle heat recovery power plant have been incorporated into this? Jacobs: An organic Rankine cycle for additional power generation was considered but was deemed to not be economic due to the low quality of heat that was being rejected. P.N.: If you build additional carbon capture plants, will you need to build additional cooling towers? If so, where will you put them? Jacobs: If SaskPower builds additional capture plants at Boundary Dam, it would most likely use a combination of dry and wet cooling. The wet cooling portion could likely be directly to the reservoir and in such a case no additional cooling towers would be required.

dÇ Ĺ˝ Ä?ŽĂů ŚĂƾůÄžĆŒĆ? ĂŜĚ Ä‚ Ä?ƾůůÄšĹ˝ÇŒÄžĆŒ Ä?Ä‚Ĺś Ä?Äž Ć?ĞĞŜ ŽŜ ƚŚĞ Ä?ŽĂů Ć?ƚŽÄ?ŏƉĹ?ĹŻÄž Ä?ÄžĆšÇ ÄžÄžĹś ƚŚĞ ŽƾŜÄšÄ‚ĆŒÇ‡ Ä‚Ĺľ WĹ˝Ç ÄžĆŒ ^ƚĂĆ&#x;ŽŜ ĂŜĚ ƚŚĞ new cooling tower for the carbon capture unit. On the right side of the building is the water treatment plant, on the ĹŻÄžĹŒ Ä‚ĆŒÄž ƚŚĞ Ä?ŽŽůĹ?ĹśĹ? ƾŜĹ?ĆšĆ?͘ Ćš ƚŚĞ ƚŽƉ ŽĨ ƚŚĞ ƉĹ?Ä?ĆšĆľĆŒÄž Ĺ?Ć? ƚŚĞ ŽƾŜÄšÄ‚ĆŒÇ‡ Ä‚Ĺľ ZÄžĆ?ÄžĆŒÇ€Ĺ˝Ĺ?ĆŒÍ˜ Photo by Brian Zinchuk

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PIPELINE NEWS October 2014

Carbon Capture Test Facility under construction at Shand „ By Brian Zinchuk Estevan – In conjunction with the Boundary Dam Integrated Carbon Capture and Storage Project, SaskPower is also embarking on another smaller, lesser-known research facility at the Shand Power station. It’s called the Carbon Capture Test Facility (CCTF). Currently under construction adjacent to the northeast corner of the power plant, it is expected to be in operation in 2015, with partner Hitachi having first dibs on its operation. /ƚ͛Ć? ÄšÇ Ä‚ĆŒĨĞĚ Ä?LJ ƚŚĞ Ć‰Ĺ˝Ç ÄžĆŒ Ć?ƚĂĆ&#x;ŽŜ ĂĚŊĂÄ?ĞŜƚ ƚŽ Ĺ?ƚ͕ Ä?ƾƚ ƚŚĞ Max Ball, manager, ^ŚĂŜĚ Ä‚ĆŒÄ?ŽŜ Ä‚Ć‰ĆšĆľĆŒÄž dÄžĆ?Ćš &Ä‚Ä?Ĺ?ĹŻĹ?ƚLJ Ĺ?Ć? Ć?Ĺ?njĞĂÄ?ĹŻÄž ŽŜ Ĺ?ĆšĆ? Ĺ˝Ç ĹśÍ˜ clean coal technology, an/Ćš Ç Ĺ?ĹŻĹŻ ÄšĆŒÄ‚Ç Ä‚ ϯϏͲĹ?ĹśÄ?Ĺš ÄšĹ?Ä‚ĹľÄžĆšÄžĆŒ Ć?ĆšĆŒÄžÄ‚Ĺľ ŽĨ ŇƾĞ Ĺ?Ä‚Ć? Žč swered our questions about Ç ĹšÄ‚Ćš Ç Ĺ˝ĆľĹŻÄš Ĺ˝ĆšĹšÄžĆŒÇ Ĺ?Ć?Äž Ĺ?Ĺ˝ ƾƉ ƚŚĞ Ć?žŽŏÄžĆ?ƚĂÄ?ĹŹ Ä?ĞŚĹ?ŜĚ Ĺ?ƚ͕ the CCTF on Sept. 16 via ĂŜĚ ƚŚĞŜ Ä?Ä‚Ć‰ĆšĆľĆŒÄž ƚŚĞ K2 Ĺ?Ĺś Ĺ?ĆšÍ˜ email. Pipeline News: What exactly is this test facility? Max Ball: The Carbon Capture Test Facility (CCTF) comprises a basic post combustion carbon capture system, with supporting infrastructure and

sophisticated measuring systems. The equipment can be configured to test a wide variety of vendor specific technologies. By testing at the facility, technology vendors can validate performance of their equipment and systems in a way that their potential customers can understand both the adequacy and risks of the technology. The system, rated for approximately 120 tonnes per day of CO2 capture, is at a scale large enough to significantly reduce risks associated with scale up from typical pilot plants, yet small enough that operating costs can be managed. Provisions have been made to support future installation of more experimental (small) scale systems for research work as well. Tests at CCTF fill an important role in making technologies ready for the market. P.N.: Why are you

building it? Ball: SaskPower is building the world’s first fully integrated power and carbon capture plant at Boundary Dam using technology provided by Shell Cansolv. While that technology is state of the art, SaskPower needs to have access to commercially valid alternatives when considering future projects. The CCTF provides validation of claims by other vendors, and will assist SaskPower in accessing the most appropriate technology for future projects. P.N.: When will it be complete? Ball: The CCTF will begin technology evaluations in the spring of 2015. P.N.: How will it operate? Ball: The CCTF will be managed and operated by SaskPower as joint effort of Shand Power Station and SaskPower’s Clean Coal Technology group.

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SaskPower has experience in this type of joint facility management at our Emissions Control Research Facility at Poplar River Power Station. P.N.: What impact does it have on the Shand Power Station? Does its placement preclude the possibility of ever adding a second unit to Shand? Ball: Shand’s operations and maintenance organization will be slightly expanded to ensure availability of operators and tradespeople. There will be a small reduction in power delivered to the grid as some steam is drawn from the boiler for process heat, and a small amount of electricity is consumed by process equipment. The facility is placed in an area which was originally allocated for a duplicate of the first unit. Federal regulations now preclude replication of that unit – any new unit must be fitted with carbon capture therefore new site layouts would be needed. The CCTF would not be a significant barrier for a new unit. P.N.: What will it cost and who is paying for it? Ball: SaskPower and Hitachi Ltd. announced in 2012 they would share cost of the $60 million facility. Recently Hitachi Ltd. has merged its power industry business with Mitsubishi to form Mitsubishi Hitachi Power Systems. The new organization continues in the same role as that announced with Hitachi including funding approximately one half of the cost. P.N.: We understand MHPS is an active partner. Can you elaborate on their contribution? ɸ Page A25

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A25

EĹ˝Ć&#x; Ä?Äž ƚŚĞ Ä?ŽůŽƾĆŒ Ä?ŚĂŜĹ?Äž ŽŜ ƚŚĹ?Ć? ǀĞĆ?Ć?Ğů ĨĆŒŽž ƚŽƉ ƚŽ Ä?ŽƊ ŽžÍ? dŚĂƚ͛Ć? Ä?ÄžÄ?Ä‚ĆľĆ?Äž ƚŚĞ ĆľĆ‰Ć‰ÄžĆŒ dŚĞ ĹŻÄ‚ĆŒĹ?Äž ƚĂŜŏ ŽŜ ƚŚĞ ĹŻÄžĹŒ Ć?ĆšĹ˝ĆŒÄžĆ? ƚŚĞ Ä?ĆŒĆľÄ?Ĺ?Ä‚ĹŻ Ä‚ĹľĹ?ŜĞ ƚŽ Ä?Äž ĆľĆ?ĞĚ Ĺ?Ĺś ƚŚĞ ^ŚĂŜĚ Ä‚ĆŒÄ?ŽŜ ĂƉͲ Ć‰Ä‚ĆŒĆš Ĺ?Ć? žĂĚĞ ŽĨ Ć?ƚĂĹ?ŜůÄžĆ?Ć? Ć?ƚĞĞů ͞ĂĆ? Ĺ?Ć? žŽĆ?Ćš ŽĨ ƚŚĞ ƉůĂŜƚ͛Ć? ƉĹ?ƉĹ?ĹśĹ?Ϳ͕ Ç ĹšĹ?ĹŻÄž ƚŚĞ ĹŻĹ˝Ç ÄžĆŒ Ć‰Ä‚ĆŒĆš ĆšĆľĆŒÄž dÄžĆ?Ćš &Ä‚Ä?Ĺ?ĹŻĹ?ĆšÇ‡Í˜ dŚĞ Ä‚ĹľĹ?ŜĞ ŚĂĚ ƚŽ Ä?Äž Ć?ĹšĹ?ƉƉĞĚ ÄšĆľĆŒĹ?ĹśĹ? ƚŚĞ Ć?ƾžžÄžĆŒ ƚŽ ĞŜĆ?ĆľĆŒÄž ĆšĹšÄžĆŒÄž Ç Ä‚Ć? Ĺ?Ć? Ä?Ä‚ĆŒÄ?ŽŜ Ć?ĆšÄžÄžĹŻÍ˜ dŚĂƚ Ç Ä‚Ć? ÄšŽŜÄž ĚĞůĹ?Ä?ÄžĆŒÄ‚ĆšÄžĹŻÇ‡ ƚŽ ƚĞĆ?Ćš Ä?Ä‚ĆŒÄ?ŽŜ Ć?ƚĞĞů͛Ć? Ä‚Ä?Ĺ?ĹŻĹ?ƚLJ ƚŽ Ä?Äž ĆľĆ?ĞĚ Ĺ?Ĺś ŜŽ Ä?ŚĂŜÄ?Äž ŽĨ ĨĆŒÄžÄžÇŒĹ?ĹśĹ? Ĺ˝ĆŒ Ć‰ĆŒĹ˝Ä?ůĞžĆ? ŽŜ Ĺ?Ä?LJ žŽƾŜƚĂĹ?Ĺś ĆŒĹ˝Ä‚ÄšĆ?͘ /Ćš Ä?ĂžĞ ĨĆŒŽž :Ä‚Ć‰Ä‚ĹśÍ˜ Ć?ĆľÄ?Ĺš ƉůĂŜƚĆ?͘ dŚĞLJ Ç Ä‚ĹśĆš ƚŽ Ć?ĞĞ ĹšĹ˝Ç Ç ÄžĹŻĹŻ Ĺ?Ćš Ć?ƚĂŜĚĆ? ĆľĆ‰Í˜ ǀĞŜƚƾĂůůLJ ƚŚĹ?Ć? ǀĞĆ?Ć?Ğů Ç Ĺ?ĹŻĹŻ Ä?Äž ÄšĹ?Ć?Ä‚Ć?Ͳ Photo by Brian Zinchuk Ć?ĞžÄ?ůĞĚ͕ ĂŜĚ ƚŚĞ Ä?Ä‚ĆŒÄ?ŽŜ Ć?ƚĞĞů Ć‰Ĺ˝ĆŒĆ&#x; ŽŜ ĆŒÄžžŽÇ€ÄžÄš ĂŜĚ ĆŒÄžĆ‰ĹŻÄ‚Ä?ĞĚ͘

ɺ Page A24 Ball: MHPS and SaskPower have co-designed the facility. MHPS has supplied core process equipment and their solvent. SaskPower is now constructing and commissioning the facility. The first 8,000 to 12,000 hours of testing at the facility will be for and under the direction of MHPS. P.N.: After MHPS completes its allotted time, what’s next? Ball: After the MHPS testing program, the facility will be available for evaluation of other technologies, including either that from other vendors, or specific process line-ups which SaskPower may need to consider for future commercial scale projects. P.N.: How important is this test facility for SaskPower’s ongoing carbon capture strategy? Ball: SaskPower’s experience with full scale CCS at Boundary Dam will be central to our development of commercially viable generation alternatives. CCTF provides a crucial second perspective on capture technologies so that we do not unnecessarily lock in on a single solution.

P.N.: Will it play into the design for future facilities, i.e. BD Units 4, 5 and 6? Ball: In working through detailed design of CCTF we have already developed a number of technical variants to those used at the ICCS. These alternatives contribute to our target of making BD 4/5 carbon capture economically viable without subsidy Once we begin to gather operating experience, and bring newly qualified vendors such as MHPS into the discussions, the BD 4/5 concept will evolve to the most advanced power generation option yet. P.N.: Is there anything you would like to add? Ball: Boundary Dam ICCS and Shand CCTF together represent the most comprehensive look yet at carbon capture on a commercial scale. Learnings from these works make possible the important improvements needs for wide scale use of this technology. We are proud to be a part of this pioneering effort.

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PIPELINE NEWS October 2014

Aquistore, from SaskPower’s perspective Estevan – Integral to the entire carbon capture and storage strategy SaskPower is as well as new techniques for measuring such things as plume dispersion, ground pursuing is Aquistore. Aquistore is two deep wells, the deepest in Saskatchewan, one for water changes and new seismic techniques. The second use of Aquistore is more injection of carbon dioxide into a deep saline operational. The site will be used to dispose aquifer, and a second well chock-full of scientific of CO2 that either does not have a cominstrumentation to monitor that carbon dioxide. mercial market available or does not meet When carbon dioxide is not being pipelined product specifications. to the Cenovus-operated Weyburn Unit, it will Current plans are to not use the Aquisbe injected 3,400 meters underground, just a tore well in the commissioning process. The few kilometres west of the power station. corporation is in the process of obtaining Last year SaskPower took possession of the an injection permit from the Ministry of project, which was initiated by the Petroleum the Economy and is finalizing the interconTechnology Research Centre, or PTRC. nection of the well with the CO2 pipeline. Don Hamilton, assistant treasurer, reConsequently, it is likely that commissioning sponded to our questions about Aquistore from will be completed before the well is able to SaskPower’s perspective. accept CO2. Pipeline News: How important is the P.N.: How will Aquistore play into Aquistore project to the overall carbon future operations? capture operation? Hamilton: The Aquistore site is part of Don Hamilton: SaskPower, through the the ICCS knowledge base that SaskPower ICCS (Integrated Carbon Capture and Storwill be sharing with partners of the consorage) Project at Boundary Dam is establishing tium. Potential members of the consortium itself as a world leader in carbon capture and have also expressed an interest in Aquistore. storage. The corporation is trying to further As well, PTRC has a number of private and the world-wide knowledge base in both public sponsors of Aquistore who will have capture and storage. Consequently, Aquistore access to the research information generated is a critical component in the overall project by PTRC. as it represents a potential storage method P.N.: Can you explain how SaskPower for CO2. While the storage of CO2 within and the PTRC will continue to work on oil reservoirs is quite well developed as repreAquistore? We understand SaskPower, sented by the work done by PTRC in the which now owns it, will handle operations, Weyburn-Midale oilfields, Aquistore is one while PTRC will continue to provide the of the pioneering projects in the storage of science component. dŚĞ Ć?ƾžžÄžĆŒ ĂŜĚ ĨÄ‚ĹŻĹŻ ŽĨ ĎŽĎŹĎ­ĎŽ Ć?Ä‚Ç ĆšĹšÄž ÄšĆŒĹ?ĹŻĹŻĹ?ĹśĹ? ŽĨ ƚŚĞ Ć‹ĆľĹ?Ć?ĆšĹ˝ĆŒÄž Ĺ?ŜŊÄžÄ?Ć&#x;ŽŜ CO2 in very deep saline formations. Hamilton: SaskPower has an established ĂŜĚ Ĺ˝Ä?Ć?ÄžĆŒÇ€Ä‚Ć&#x;ŽŜ Ç ÄžĹŻĹŻĆ? ĹŠĆľĆ?Ćš Ä‚ ĨÄžÇ ĹŹĹ?ůŽžÄžĆšĆŒÄžĆ? Ç ÄžĆ?Ćš ŽĨ ƚŚĞ ŽƾŜÄšÄ‚ĆŒÇ‡ Ä‚Ĺľ relationship with PTRC to provide research P.N.: How has it been used during the WĹ˝Ç ÄžĆŒ ^ƚĂĆ&#x;ŽŜ͘ Photo courtesy Aquistore as well as some of the measuring, monitoring commissioning process? Hamilton: SaskPower’s intentions for and verification, particularly in regards to the Aquistore are two-fold. The first use of Aquistore is as a research model for the in- plume dispersion and ground and soil quality monitoring. SaskPower has responsijection into a deep formation. For this purpose, the corporation has partnered with bility for operating the well and conducting the operational measuring, monitoring PTRC to expand on the research base for measuring, monitoring, and verification and verification including the well integrity, CO2 containment, etc.

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A27

Aquistore is waiting for CO2

In August 2014 detailed gravity surveys were taken at the Aquistore site using an instrument that looked like a yellow R2D2. Photo courtesy Aquistore

„ By Brian Zinchuk Regina – There will be times when Cenovus is not able to take CO2 for injection. When that happens, the captured CO2 will be pumped deep underground into a saline aquifer just above the sedimentary basement, approximately 3,400 metres deep. That injection well, and the associated research, is known as the Aquistore project, which was initiated by the Petroleum Technology Research Centre. PTRC President and CEO Ken From, PTRC communications manager Norm Sacuta, and Aquistore communications and project officer Aleana Young spoke to Pipeline News about the $30 million project on Sept. 10. Pipeline News: Can you explain briefly just what Aquistore is? Ken From: Aquistore is a well that is intended to validate the storage of CO2 into a deep saline formation. It is meant to be a total geological storage of the CO2. P.N.: How important is Aquistore to the global strategy of carbon capture and storage? Could, and should, this be repeated throughout the world, since not everyone has access to nearby depleted oil-

fields? From: You kind of answered your question within your question. For those who do not have any other use for CO2 such as EOR, or to make it into a product, for which I understand there is research going on, this provides probably the largest possible way to safely store CO2 underground. What’s unique here and what we’re doing with Aquistore is not only are we providing that deep well into the saline formation, but it’s also part of a very commercial operation. It will be operated by SaskPower. It will have to integrate into their operations. In conjunction with that, at the other end of the longer pipeline, is the CO2-EOR field in Weyburn-Midale. This will have lessons learned in what might be a very unique set in the entire world right now. P.N.: What has been the PTRC’s role, and what is it currently, since SaskPower took possession of the asset? From: In summary, it was PTRC and partners which formed this project years ago and have seen it to its current state where that injection well has been drilled. There’s an observation well 150 metres apart from that.

It is instrumented like crazy. To use a SaskPower word, it is a “smart well.� There’s so much research that can be done there. At the present time it is owned by SaskPower and is getting ready for CO2 injection once the commissioning is over at the CO2 capture site. P.N.: Have you injected any CO2 yet? If so, does it work? From: To the best of my knowledge, SaskPower is commissioning the site and I don’t know if they’ve taken flue gas over. The short answer is no, there has been no CO2 yet, and therefore nothing is injected at this time. P.N.: Have the final stages been completed, i.e. is the pipeline connected to the well? If not, what remains? When do you expect that to be completed?

From: It’s my understanding all the facilities are in place there. What they’re waiting for is the final connection, the final mechanical connections with the flanges on the pipes. They have to run some instrumentation and do things of that nature. It’s in their hands and they’re working on it in conjunction with other things they’re doing. There is a building on-site that is covering all the instrumentation and take-off points for the injection well. There’s a trailer on-site that SaskPower has provided for the researchers to work at while they’re their. It has power, desks, and internet capability. We have two wells out there. The other one is the observation well. It is also busy getting its final equipment and sample points hooked up,

with a little building that will go on top of that for weather protection. P.N.: Wasn’t Aquistore expected to be used during the commissioning process? What changed? From: Broadly speaking, when I’m talking commissioning, I’m talking the whole works, including getting the plant working. There’s many facets to that commissioning. Once that island has gone through the safety checks and start processing flue gas, then we get into what happens with the CO2. It’s my understanding SaskPower is working with some very good industry partners to develop the operating procedures and protocols for when they put it in the well. I know from the power unit, they do it

in a variety of stages, to check out the redundancies, to check out the instrumentation, to check out the alarms. There’s quite a process they go through to make sure it is safe. This being the first one ever, because they’ve done power islands before, I think, they’re going to certainly to uncharted territory and that might take a bit longer than had been anticipated. That’s my uneducated guess on that one. P.N.: When do you expect to see CO2 injection to begin? How much utilization do you expect to see from this well, given that Cenovus is contracted to buy most of the CO2? From: We’re anticipating we’ll be able to get CO2 before the year end. We’re gearing up for all that activity. ɸ Page A29

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PIPELINE NEWS October 2014

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Deep saline CO2 storage has global implications ɺ Page A27 How it’s used on the commercial side, that’s for Cenovus and SaskPower to work out as Cenovus puts forward their own CO2 delivery plan. Aquistore is nice in that it’s there for SaskPower to use and SaskPower to ensure that this unit is performing environmentally as it’s supposed to and not releasing a bunch of CO2 in the air. Regardless of how and when Cenovus takes it, the Aquistore well will be ready and be able to store a big chunk of it for SaskPower. We have run a number of scenarios in regards to injection plans, but on that side of it, there hasn’t been a lot new in the last number of months. We’re just waiting for SaskPower to finish commissioning and to get their operators trained to operate the injection well. P.N.: How much money is this project worth? Where did that money come from? From: The Aquistore project is fully funded. There is no more money that is required. What we’re doing now is solely on the measuring, monitoring and verification of the plans. It came from a variety of funders. I think it’s around the $30 million (mark). P.N.: What is the practical purpose, beyond the science, of Aquistore, (i.e. deep saline storage)? From: The practical purpose is to store manmade CO2 emissions. These deep saline formations have the largest potential to do so. It’s solely for the greenhouse gas effect, to store the CO2 and to reduce CO2 emissions into the air. P.N.: Is there any talk about carbon credits right now? From: Certainly not within PTRC and to PTRC. That’s not our mandate. For SaskPower and, more broadly, the

entire coal-fired power plant industry, if coal is to be, and continue to be a viable alternative for fuel, the utilities have to do something about that to continue using coal as a fuel source. This proving it can be done economically and into a deep formation, that’s helpful to every power plant in the world, for any new ones to be built, helpful in China, anywhere coal is the most economical fuel source. This is probably the only solution that has been thought of so far with the power plant status. P.N.: What sort of science are you trying to accomplish? From: There’s a bunch of things. What it boils down to is public assurance that injection of CO2 into this type of formation is safe, it does not pollute any of the other formations, it does not cause any other disruptions to the earth’s surface such as microseismicity. All of the research work is around understanding how the CO2 goes into the formation. Is it doing it as predicted? (We’re) looking at the wells to ensure they have enough integrity so there’s nothing escaping through them, and then there’s geological integrity, to ensure it does not come to surface, or contaminating another formation deep down. It’s to give assurance to the public and regulators that this is a viable, safe way of dealing with CO2 as an emission they want to stick underground. P.N.: Can you talk about how important baseline monitoring is? From: Without a proper baseline for whatever you’re looking at, it doesn’t matter if its soil sampling, groundwater sampling, seismic, having a baseline that is established over a period of time is absolutely critical. It was demonstrated probably adequately with the Kerr incident at

Weyburn-Midale. Researchers who don’t have a baseline take a sample and say, “Oh my gosh, there’s CO2 there.â€? Those that have a baseline go, “Yeah, every spring, we have this kind of stuff, and it varies seasonally, yadda yadda.â€? Baseline, for seismic, that’s how we can see things move. It’s not as if with seismic you can tell there’s CO2 down there. What you can tell is, from baseline, it is now different than it was before. All these measurements, the baseline is the foundation for everything. Aleana Young: 2011 was our first seismic baseline. ɸ Page A30

dĹšĹ?Ć? ƉĂĆ?Ćš ĆľĹ?ĆľĆ?Ćš ƚŚĞ ƉĹ?ƉĞůĹ?ŜĞ ĹšÄžÄ‚ÄšÄžĆŒÍ• Ĺ˝ĆŒÄ‚ĹśĹ?Ğ͕ ĂŜĚ ƚŚĞ Ĺ?ŜŊÄžÄ?Ć&#x; ŽŜ Ç ÄžĹŻĹŻÍ• ĆŒÄžÄšÍ• Ç ÄžĆŒÄž Ç Ä‚Ĺ?Ć&#x; ĹśĹ? to be connected. Photo courtesy Aquistore

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PIPELINE NEWS October 2014

Baseline monitoring is crucial Éş Page A29 From: Some of the instrumentation out there right now is recording, such as on microseismicity. Recordings have picked up some earthquakes around the world. That puts credibility into the research, when you know the instruments are recording things that are happening right now. When things do occur in the future, you can better determine the root cause of that. Was it something that happened over there, or over here? P.N.: The main science component of the Wey-

burn field saw PTRC involved in about a decade of research. How long do you think this project will see active scientific work? Norm Sacuta: We are planning at the moment, to 2017. That’s what the budget allows for – monitoring and measurement over that period. If those years, up to 2017, provide us with the information that we need for public assurance and regulators, I would assume ongoing measurements at the site may not be part of PTRC’s future. It may be something SaskPower does. The project is funded, and will continue to do research and reach conclusions until 2017, and from

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that point, it will be determined if more work needs to be done. P.N.: If SaskPower progresses to do carbon capture on Units 4, 5 and 6, do you foresee a need for additional injection wells, or could this one injection well handle everything required of multiple units? From: The injection well could not handle more than what is going to be put on it right now. If they chose to do any additional CO2 and store it underground, other injections wells would have to be drilled and completed. The thing there is, this first one is a bit overkill with instrumentation. Once the other stuff is verified, other injection wells would be a lot simpler and far less costly to do. P.N.: We understand you have another phase of community outreach coming. Can you explain what is planned? Young: Our first open house was April 2012. That open house was in Estevan before any site work began, to answer any questions or concerns in the community. That was heavily advertised. As part of our communications and outreach, based on a lot of learnings from the Weyburn-Midale project, specifically the allegations of a CO2 leak, as mentioned earlier, having a really strong baseline is critical for public assurance and public outreach. As part of our commitment to the community of Estevan and local stakeholders, we would like to have a second open house to present and discuss those baseline results. We’re just waiting for CO2, as we want to have that second open house after it. We’re waiting until it’s more relevant to people’s everyday lives. We’re expecting CO2 in 2014, so we’ll have our open house before that. P.N.: What do you see happening with Aquistore over the next six months, year, and five years? From: The next six months is that initial injection. That will prove a lot of things we’re looking for. It will provide that first tranche of CO2 and a lot of the things the scientists want to prove up. One of those things is to prove up the injectivity of the well. That’s one of the things that’s really important in this whole area. You can do all the modelling you want, you can take core samples, you can analyze them, but in reality, how much CO2 can you can you pump down there? What if it doesn’t match what your model is? What we’re trying to get to is have the mathematical models that can predict very accurately what’s happening in the formation. That’s one of the reasons there’s two wells there. The CO2 goes down the injection well. What we’re going be looking for in the first period of injection is how long will it take before we can detect CO2 150 metres away in the observation well? We have run a mathematical models to predict that, based on a certain injectivity rate. What we want to do is to see how reality matches that so people can go back and adjust their models, or maybe they’re bang-on. That’s the first six months we’re really interested in here at PTRC. After that it’s more about how this is integrated into a commercial power plant/EOR/ CO2 storage site. That, in itself, will have a lot of impact to the industry. In a commercial operation, steady state is not always there, so how does it react to transient states when you have to take the unit down, or when the taker of the CO2 has a plant turnaround and can’t take it for a little while. How do we handle those events? Those are the things in the following year. Going past five years is a tough call to predict anything other than a continued operation. Perhaps working with regulators to see what level of monitoring is really required out there. We have stated we have a lot of monitoring. In reality, for a well in a power plant operation, you likely would not have that level of monitoring. What we’re trying to prove with other work is what is the level of monitoring required for the regulators, for the public, to ensure the CO2 is behaving the way it is supposed to.

PIPELINE NEWS October 2014

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03 UHĂ HFWV RQ IHGHUDO LQYROYHPHQW Estevan – SourisMoose Mountain MP Ed Komarnicki has collected a few pictures during his four terms in office. In the centre of his wall of photos a collection of pictures stands out. They are from March 25, 2008, when Prime Minister Stephen Harper came to Estevan to announce $240 million in funding for a clean coal initiative at the Boundary Dam Power Station. On Sept. 12, Komarnicki spoke about how that came about, from his perspective. Looking at the pictures on the wall, he pointed out the presence of former minister of Natural Resources Gary Lunn, who was instrumental in the project’s approval. “What I did initially is look at it from this perspective. I knew environment was a big topic and a big issue, and regulations would be coming down in terms of restricting emissions. It would definitely have an impact on Souris-Moose Mountain, particularly Estevan,â€? Komarnicki said. “In the city of Estevan, SaskPower employs a lot of people. Early on the Chamber of Commerce applied some pressure and said they wanted some federal funding. They wanted small millions at that time to have a look at the feasibility and what it would mean to Estevan. “My view was, early on, to get discussions going between the province and ministers at a higher level in terms of where we were going, where the province was going, and how this might impact on Estevan in particular. So we brought some ministers in. Gary Lunn was instrumental in the beginning. He toured the Cenovus plant. He came to Estevan. I recall we had a meeting at the golf clubhouse in Estevan with Minister Lunn. The Saskatchewan Party

government had (recently formed government) and we invited their ministers to meet with our minister and the support people he had. “We had a pretty good session at the golf clubhouse, well received by the community, and the province responded.� John Baird, who has held many ministries, including environment, also played a part, Komarnicki noted. He too made a similar trek to the Weyburn field and Estevan. A round table was held. “There were times when the environment file took on a highlighted position. It’s seen its ups and downs over the years. At that time, it was very much in play,� Komarnicki said. Jim Prentice, now premier of Alberta, was also another federal minister involved, as well as Peter Kent, another minister of the environment. Kent worked on synchronizing federal and provincial emissions regulations. “The premier of Saskatchewan (Brad Wall) was also very active on this file, as was the prime minister (Stephen Harper),� Komarnicki said. The budget saw $240 million allocated, plus additional money for other studies. “The prime minister was key. There was this issue about what are you going to do about coal generation? Some of the plants are getting old, just like Estevan’s at Boundary Dam. Carbon capture and storage was a concept that really didn’t have a lot of commercial testing or operation anywhere in the world, really. The opportunity to do something like this in Estevan was certainly a nationalin-scope project,� he said. Ontario was also in the process of shutting down its coal-fired power

generation. “Can we produce power by coal in such a fashion that your emissions were not as detrimental as they were?� Komarnicki said noting that was a consideration. “The prime minister, when he made the decision with cabinet – it wouldn’t be just his decision – to fund, what in some measure, some would say was an experimental program going forward and would be a novel concept that may be applied across various jurisdictions, he said to me something along the lines of he might want to come to Estevan to view it.� “I said I would be delighted to have him in Estevan to tour the facility,� Komarnicki recalled. “The entourage was quite a site to see. It was quite an event.� Komarnicki will be leaving politics at the conclusion of his term in 2015. Among his accomplishments as member of parliament, it ranks at the top. “It was a highlight, or a point of culmination, of all the events that had taken place over the years in terms of is it going to go, is it not going to go?� Komarnicki said, “It was a historic moment.� “In the early going, there was never a surety that this was going to happen. I think there was a little bit of anxiety to the community of Este-

van and the many people employed, not just on the part of the city and the chamber, but myself as well. It would obviously have an impact on the city.� He noted conversely having clean coal would lead to a significant spinoff, from engineers working on the project to new hotels to even supplying concrete from local suppliers. As for enhanced oil recovery, he noted, “We are in a unique situation for the storage of CO2. You can’t just put it anywhere.� Touring the existing CO2 project with Cenovus was also a key point for all the ministers involved, allowing them to see carbon dioxide storage and enhanced oil recovery in actual operation, he noted. That included a tour by the

The pictures beside MP Ed Komarnicki show the announcement of $240 million from the federal government for the clean coal project.

prime minister. “Cenovus was always an important stopping point,� he said, and the company was very accommodating. “My view has always been you do your best to try to put the people

together to see if you can give an achievable result. If you give it 100 per cent, people won’t necessarily fault you if don’t get the right answer, but at least they want to know that you tried, and tried as best you can.�

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PIPELINE NEWS October 2014

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PIPELINE NEWS October 2014

Working together resulted in clean coal project

Estevan MLA Doreen Eagles lobbied hard for the clean coal project. Photo by Brian Zinchuk

Estevan – In 2007, future prospects for coal power near Estevan were looking bleak, but they soon picked up. There was a profound shift in federal/provincial relations at the time. The previous NDP government had been suing the federal government over equalization payments. The relationship had become noticeably sour. Then with a new Saskatchewan Party government elected in 2007, and with a similar mindset to the federal Conservative government, perhaps there would be an opportunity to get along. One of the players back then in getting a clean coal project for Estevan was local MLA Doreen Eagles. She had served two terms in opposition and before being elected into government with the Saskatchewan Party. Today she has served 15 years in the Legislature, and is undecided about seeking another term. “I lobbied hard

for the clean coal to be located at Estevan. There was some talk of Coronach,� she said at her farm north of Hitchcock on Sept. 11. Eagles said she lobbied anyone who would listen. “I think the Saskatchewan Party made the right decision,� she said, noting that while housing so many workers was a struggle in Estevan, it would have been much more so as Coronach, where the Poplar River Power Station is near. Up until 2007, the provincial NDP government had been planning to build a second unit at the Shand Power Station near Estevan, but the cost was going to be in excess of $3 billion due to its oxy-fuel design. “That was the plant they were going to build. The government of the day announced it. The NDP in the end cancelled it. It wasn’t the Saskatchewan Party that promised it,� she noted. “They announced it and reneged on it.�

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She acknowledged that the Shand 2 project cost was high, approximately one-third of the provincial budget at the time, a huge expenditure. It also didn’t help that there were members of the NDP cabinet, like Peter Prebble, who were dead-set against coalfired power generation. “Estevan would be a ghost town if this project (Shand) wasn’t on,� she said. “People were absolutely frantic.They didn’t know where the bread and butter was going to be coming from. But we’ll always need power. We knew there had to be generation. We knew the lifespan of some units at Boundary Dam was coming to the end of their time. The talk of CCS (carbon capture and storage) and retrofitting started.� Then came the 2007 election which aligned the provincial and federal governments. “I think on this project (BD3), with all the environmental issues, I think they (the federal Conservative government) did think closely to what we thought. With any government, there still had to be cooperation,� she said. Saskatchewan did not get its way with the equalization argument, which the NDP had said was worth in the neighbourhood of $800 million. But it did get a $240 million one-time contribution that kickstarted the Boundary Dam project. “I don’t know if I would regard it as compensation. They wanted to be a world leader,

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too,� Eagles said of the federal government. “If Saskatchewan was a world leader, that makes Canada a world leader. “I would have to say the environment played a big part of it. The price of coal is stable and we have a good supply of it. The price of natural gas fluctuates.� In her accomplishments as an MLA, which included securing funding for the Saskatchewan Energy Training Institute, the new hockey arena and a CT scanner, Eagles said, “I hope I played a small role in this (clean coal).� She says it is understandable the project is a little overdue and over budget. “World class, world first, I think it would be understandable.� She noted that retrofits on the old power plant probably had things that weren’t expected. “Look at what’s happened since this started. It’s proved we can be leaders. We don’t have to be followers. There have been challenges of course, with housing and stuff, but the positives outweigh the negatives.� Eagles said enhanced oil recovery from the collected CO2 was an important factor, as was the sale of sulphuric acid and fly ash.

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PIPELINE NEWS October 2014

The writing was on the wall “The rest of the world was in Ă€ QDQFLDO FDODPLW\ :H ZHUH EXLOGLQJ PHJDSURMHFWV Âľ -LP :LOVRQ SUHVLGHQW :LO 7HFK ,QGXVWULHV /WG together. Within a month, Brad Wall came to power. “I would say, without a question, that alignment had a lot to do with it. With Boundary slated for shutdown in :Ĺ?Ĺľ tĹ?ĹŻĆ?ŽŜ Ç Ä‚Ć? ŽŜÄž ŽĨ ƚŚĞ žĂŜLJ ƉĞŽƉůĞ Ç ĹšĹ˝ Ä‚Ä?Ć&#x; ǀĞůLJ ƉƾĆ?ŚĞĚ ĨŽĆŒ Ä‚ Ä?ůĞĂŜ Ä?ŽĂů Ć‰ĆŒŽŊÄžÄ?Ćš ĨŽĆŒ 2025, we had a deadline. Ć?ƚĞǀĂŜ ƚŚĂƚ Ç Ĺ˝ĆľĹŻÄš Ć?ÄžÄ?ĆľĆŒÄž ƚŚĞ Ä?ŽžžƾŜĹ?ƚLJ͛Ć? ĨƾĆšĆľĆŒÄžÍ˜ Photo by Brian Zinchuk “We asked the government if it was an importer or exporter of energy,â€? he cided not to proceed with a second unit said. Estevan – It was the phone call Wilson noted the need provincially for the Shand Power Station. Coalthat indicated something was up, a fired power generation was increasingly to find a solution for “dirty coal.â€? phone call that Jim Wilson was happy “We knew if governments wouldn’t to receive. being considered “dirty.â€? Governments support clean coal, they would never back then were looking at things like Wilson, who owns and operates of support dirty coal,â€? he said. carbon credits. The Ontario governWil-Tech Industries Ltd. of Estevan “Both (MLA) Doreen (Eagles) ment started shutting down coal-fired with his wife Crystal, had been one of and (MP) Ed (Komarnicki) had a great power plants. Plus, the Boundary Dam the many people active with Estevan percentage of support. We made it very Chamber of Commerce efforts to get a Power Station saw some of its units nearing retirement age, and it was look- clear this is one of the biggest issues the clean coal project for Estevan. He also community faced.â€? ing like they would all be shut down happened to be the president of the Both Eagles and Komarnicki had local Woodlawn Golf Club (now the by 2025 if nothing was done. For those strong relationships with their respecTS&M Woodlawn Golf Club). who wanted to see Estevan prosper, tive governments, he noted. The call from the golf course indithey now had a hard deadline. One of the key elements was strong Wilson noted that approximately cated that the RCMP would be visiting the course, hinting of an upcoming visit 1,000 jobs were tied to the power plants community support. “We were a community that wanted clean coal,â€? Wilson from some very important people. A and the coal mines that feed them, as said. well as the associated services. These few days later, Prime Minister Stephen “We were looking at this from the are good-paying jobs. If coal was no Harper, with recently elected Premier business and community side of EsteBrad Wall, announced the federal govlonger viable, it would not be good for van,â€? he said. ernment would be contributing $240 Estevan. Asked whether enhanced oil recovmillion to the Boundary Dam IntegratThat includes Wilson’s own busiery using captured carbon dioxide was a ed Carbon Capture and Storage project. ness, which specializes in hydraulics. consideration, he said, “We knew there “I was on the Chamber board. It Clean coal was going to become a were candidates for that.â€? reality, and the future of Estevan was was a long time ago,â€? he said on Sept. The synergy of having a power 10. “We took the initiative. secured. plant producing captured carbon diox“We had three governments align: That security was not always there. ide and depleted oilfields nearby made The previous NDP government had de- local civic, provincial and federal

sense, he noted. “We saw success at the Encana (now Cenovus) site.� It was also important that the power grid is already orientated to southeast Saskatchewan. “An economic development committee on the chamber isn’t going to build a clean coal plant. We could bring the parties together,� he said. An early indication something was going to happen was when the federal environment paying a visit. That led to Harper’s visit on March 25, 2008, when he made the announcement that the federal government would be contributing $240 million to the project. Not long after that announcement, the world plunged into a global recession. “The rest of the world was in financial calamity. We were building megaprojects,� Wilson noted. “There wasn’t a plant like this anywhere in the world. “Not to dramatize this, but the world was looking for a community to take this task on. Maybe it helps with options for clean coal in other countries. “Government doesn’t design power plants. You have to give resources to the people who do.� Wilson added, “I want to thank Doreen and Ed, because they made the task a lot easier. Without them, this never would have happened.�

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PIPELINE NEWS October 2014

A35

Future of coal, and Estevan, was in the balance Estevan – The future of Estevan, “The Energy City,� was very much in the balance when the future of the Boundary Dam Power Station and the associated coal mining activity was under consideration. Estevan Mayor Roy Ludwig was a city councillor when the project was approved, and has been mayor during its later phases of construction. That role has meant not only contending with the construction, but all the community factors that have arisen as a result. The top of the list is housing. “The Chamber of Commerce, members of council, members from the community, lobbied very hard for this clean coal project. Hats off to them. The provincial government, in their wisdom, decided to put their best foot forward through SPC (SaskPower Corporation) to bring this to fruition,� Ludwig said on Sept. 12. He noted the federal government put in $240 million. “They’re stakeholders as well. We absolutely appreciate them coming to the table as well,� Ludwig said. “The important thing is not only is this cutting edge technology, which means a future for the coal mining industry, potentially worldwide, but for coal miners, especially Saskatchewan coal min-

ers, it means a future.� That’s not lost on Ludwig, who has been a coal miner all his life. “In the past, coal mining has tended to be a sunset industry. Everybody sees coal as black and dirty and disgusting and polluting the environment. Now, if this project can be successful, and we’re very optimistic it will be, we have a light at the end of the tunnel that will put coal back in the forefront as a means for a resource that can come back into being that will be cost effective compared to other technologies we’re using. “It should bring coal back to the forefront as a resource we can use as a cost-effective (energy source), and for the most-part pollution free. “I’ve spent my life in the coal mining industry. I’m very impressed this will mean long-term employment for our industry. We’ve got a lot of young people, here in Estevan that are concerned over the future of the industry. If this can be pulled off, which we absolutely hope it will be, this clean coal project means a future for the coal mining industry and a whole new renewal of the industry.� He noted that applies around the world. Other proponents of the project, like Estevan businessman Jim Wilson,

noted that if it did not come to pass, Boundary Dam Power Station would likely be closed down in the coming years, and with that, associated coal mining. Ludwig agreed. “With the spinoff effects with SPC and the coal mine, it is huge for Estevan and area. Eventually, without this, Jim (Wilson) is right. It would have meant the slow but sure decline of SPC as we know it, and as a result, coal mining as we know it.� As for replacing those jobs, he said the Bakken play has been a huge boon to Estevan. “But with the power production and coal mining, that is still a very large part of our community. I don’t believe, looking forward, we would find enough resources to fill

that void.â€? With regards to Boundary Dam’s Units 4, 5 and 6, he said, “We’re hoping, with the success of this project, as we move forward with successive units it will get cheaper. We’re hoping it will mean that the other units that are in need of repair and improvement ‌ we will in fact see the other units moved to clean coal, and our future assured. “With enhanced oil recovery, this is another opportunity to revitalize some of these aging oil wells. That’s another great positive as well,â€? said Wilson. As this project came at the same time as the “Bakken boom,â€? Ludwig noted, “The biggest challenges off the hop was housing, and along with housing, infrastruc-

ture to take care of the burst of growth we’ve had. Council and staff have been working very diligently trying to take care of the growth needs of our city. We’ve been working closely with the provincial government as well to help us wherever they could.� He pointed to work on Highway 47 through the community as an example. “It’s a huge financial burden when you take on that much growth, that quickly,� Ludwig said. That said, it was absolutely better than the alternative. “Although I think sometimes we feel overwhelmed and like to complain, we keep our mouths tightly closed, because the alternative, with shuttered shops, that’s not the alternative

we’d like to see.� Ludwig thinks Estevan is better positioned to deal with future carbon capture projects, with the city starting to meet its housing needs and starting to get some vacancies now. “I think we’re in a better position now to take care of these growth items that will continue be coming at us. He said the opening of the Unit 3 will be “a red-letter day� for the city of Estevan. “We’re looking forward to this grand opening. It will be a milestone, not only in Estevan’s future, as far as coal mining goes and improved oil recover, I think it will be a stepping stone for Saskatchewan and the rest of the country and the rest if the world to look at coal as a viable resource,� he concluded.

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PIPELINE NEWS October 2014

+RZ GR \RX RSHUDWH D À UVW RI LWV NLQG SODQW" Estevan – A wall of monitors in the Boundary Dam carbon capture plant control room keeps an eye on all the complex systems of this new facility. It’s something of a new area for SaskPower, as the capture plant is more of a chemical processing plant than the coal-fired power plants they are used to. So what does it take to be a capture plant operator? Randy Bye, manager, production, answered our questions. Pipeline News: What exactly do you do as a capture plant operator? Randy Bye: That depends on the operator’s position. The facility operators operate the water treatment plant and heat rejection system, assist in operation of the capture plant by operating valves and equipment in the field as directed by the process operator. The facility operator also performs lock-out tag-out functions. The process operator’s main role is to operate the plant from the digital control system (DCS) in the control room. He would also assist in all the functions that the facility operator performs when requested by the shift supervisor. There is one shift supervisor on each shift. He directs the day-to-day operation of the operators. He also is the administrator of the LOTO system in his area. P.N.: What are their backgrounds? Bye: The operators are all power engineers from 4th Class up to 1st Class. Backgrounds vary from power plant experience, oil and gas industry experience, to no experience at all. P.N.: What sort of training was involved? Bye: The power engineers that were hired during construction went through over 300 hours of classroom training delivered by subject matter experts and then were put through simulator training. There was self-directed training on the process as well as some mentoring. As this was a brand new plant and first of its kind, there was no real way to have a lot of mentoring. Everyone learned together. New people go through all the same modules that were taught in the classroom, except they do it on the computer, on their own. They still go through

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instructor-led simulator training. We now have enough experienced operators that new people can be put with an experienced operator for on-the-job training. P.N.: How is this different from operating a power plant unit? Bye: Apart from having some of the same type of process equipment like valves, pumps, and heat exchangers, this is a totally different process. In the plant you are boiling water to make steam superheating it, putting it through a steam turbine that drives a generator, condensing the steam and putting the condensate back through the boiler. The capture plant is basically a chemical process plant that uses steam to adsorb the desired gases from a solvent that circulates through two separate absorbing towers. There is also an acid producing plant and large high pressure CO2 compressor and pipeline. P.N: What sort of monitoring systems are in place? Bye: There are the usual pressure, temperature, flow measurements, but we also have gas detectors throughout the facility to detect gas leaks. There also infrared fire detectors on the compressor. P.N.: Are there any particular safety issues in the operation that you need to stay on top of ? Bye: There is the possibility of SO2 and CO2 has leakages. There is also caustic used in the process as well as two types of amines. The wash water from the flue gas cooler may be low pH. In the acid plant, there is SO2, SO3 and sulphuric acid. P.N.: Do you also look after operation of the pipeline and Aquistore? Bye: Yes. P.N.: Do you get a lot of visitors? Do you expect more in the future? Bye: Public tours have been curtailed at present, but there are lots of requests for tours. P.N. What sort of things are they interested in? Bye: They just want to see what the world’s first full scale CO2 capture plant looks like from the inside. They are also interested in the CO2 compressor, which is impressive.

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PIPELINE NEWS October 2014

A37

Family tradition Twenty-four years ago, then 24-year-old Kevin Beck, right, started as permit hand welder working on the Shand Power Station. Now he’s SaskPower’s construction manager on the new Shand Carbon Capture Test Facility. He follows in his father Dave Beck’s footsteps. Dave Beck, left, worked on Boundary Dam Unit 3 in 1969, then later on Units 4, 5 and 6, Polar River 1 and 2, and Shand. Dave Beck passed away a few years ago, leading Kevin to say, “I wish he was here these days to see me working on this.â€? New photo by Brian Zinchuk ĂŜĚ Ä‚ĆŒÄ?ĹšĹ?ǀĂů ƉŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ Ä?LJ <ĞǀĹ?Ĺś ÄžÄ?ĹŹ

/RFDO Ă€UPV SLFNHG XS ZRUN probably take it on next time,â€? he said, adding the experience has taught them a lot about the request for proposals process. “It was a very interesting project, the rebuild of Unit 3. Ultimately, they’ll look at Unit 4,â€? he concluded.

James Quewezance of PS Electric has decades of experience. Here he’s working on the Ä‚ĆŒÄ?ŽŜ Ä‚Ć‰ĆšĆľĆŒÄž dÄžĆ?Ćš &Ä‚Ä?Ĺ?ĹŻĹ?ƚLJ Ä‚Ćš ƚŚĞ ^ŚĂŜĚ WĹ˝Ç ÄžĆŒ ^ƚĂĆ&#x;ŽŜ͘

Estevan – On megaprojects like the Boundary Dam Integrated Carbon Capture and Storage Project, big ticket items are typically dealt with by big companies. SNCLavalin was the general contractor, for instance. Hitachi provided the turbine. Shell Cansolv was behind the technology. But despite this, there was still room for the little guy; smaller, local businesses to get a piece of the action. That included everyone from crane companies and concrete suppliers to one particular local electrical company. PS Electric of Estevan has had a long history working with SaskPower at both of its two local power plants. Initially they had looked at bidding on the main electrical contract for BD3, but it was simply

too big for them. Harvey King, owner, said it was a $20 million contract, but the holdback and surety would have required P.S. Electric having $4 million up front. He also would have needed over 100 workers. “From a business standpoint, I couldn’t do it,� he said. Even so, they still got a lot of work, peaking at 50 people at Boundary Dam. “A lot of our work came about from obstruction,� he said, explaining that was where they would have to work around piping or structural steel within the existing power plant. “On clean coal, we started with commissioning and have taken over the tail end of the changes and enhancements. On the power island, we started on construction power and

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PIPELINE NEWS October 2014

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A39

CO2 enhanced oil recovery primer „ By Brian Zinchuk Weyburn, Calgary – Carbon dioxide is a key component to enhanced oil recovery in the Cenovus-operated Weyburn Unit. The CO2 comes from Dakota Gasification in Beulah, North Dakota, via the Souris Valley Pipeline, and will soon see additional CO2 coming via the new Rafferty Pipeline from the Boundary Dam Power Station. But what exactly do they do with it once it arrives? Jessica Wilkinson, media relations advisor with Cenovus, answered our questions via email on Sept. 16. Here are the responses. Pipeline News: Where does the new pipeline connect to your operations? Jessica Wilkinson: This pipeline has a dedicated Central Receiving Terminal (CRT), approximately 8 km from the SaskPower plant, than feeds into our infrastructure through the new pipeline. P.N.: Does it all go into the same header system? Is it integrated or segregated for your existing CO2 supply? Wilkinson: It is integrated into our existing CO2 infrastructure. P.N.: How are you implementing the new CO2 supply into your current system? Wilkinson: The additional CO2 will help us optimize our current flood. We have flexibility in our operation that will allow us to take the additional CO2. The main driver behind securing this agreement with SaskPower was to ensure the reliability of supply and to give Cenovus options in maintaining and potentially expanding our CO2 enhanced oil recovery project. P.N.: Does the fact that SaskPower-sourced CO2 is not sour (compared to Dakota Gasification CO2) make any difference? Wilkinson: Not at all. They are similar in purity and quality. P.N.: Can you explain how your pattern system works? Wilkinson: We do keep a lot of information around our injection system confidential, for competitive reasons. If you look at it on a map, it looks kind of like a checkerboard. P.N.: How much CO2 will you receive for SaskPower on a daily and yearly basis? Will it vary much, or be a constant level of supply? Wilkinson: We have a 10-year agreement with SaskPower to receive up to 3,014 tonnes per day, which equates to about one million tonnes per year. P.N.: Will the additional volumes of CO2 avail-

able for EOR mean Cenovus will be stepping up its activity level, with additional drilling, more injection well conversions, and more pipelines? Wilkinson: As we continue to inject more CO2, we’ll be able to maintain oil production volumes that would have declined without the enhanced oil recovery. We plan to continue to expand the flood although decisions have not yet been made about the pace of that expansion. The additional CO2 will also help us optimize the performance of the flood. P.N.: Will you need to increase the capacity of your batteries and processing plant? Wilkinson: Not at this time. P.N.: This CO2-EOR operation has been going on since around 2000. What have you learned over that time period? Wilkinson: We are constantly looking for ways to improve the way we do business and coming up with new techniques to make our operations more efficient. The people we have working at our Weyburn operations are some of the best in the industry when it comes to their expertise in enhanced oil recovery using CO2. Many of them have been with us since we started injecting CO2 in 2000 and they’ve developed innovative techniques to ensure our operations are producing optimum results. One of the main areas of research for this enhanced oil recovery project to be a success was the migration of the injected CO2. We used seismic to follow the movement of the CO2 underground in order to determine how far it was travelling and how

much oil it would reach. That subsequently helped us determine the spacing of the injection and production wells across our oil field. We also use observation wells with pressure sensors to monitor the flow of CO2 and oil. ɸ Page A40

Yellow pipes in the Weyburn Unit signify CO2. Photo courtest Cenovus

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A40

PIPELINE NEWS October 2014

The other end of the pipeline: the Weyburn Unit „ By Brian Zinchuk Weyburn, Calgary – It’s all well and good to capture carbon dioxide at the SaskPower Boundary Dam Power Station, but once it is captured, you have to do something with it. A key component of the whole equation is the sale of compressed carbon dioxide for use in enhanced oil recovery (EOR).

In December 2012 it was announced that the Cenovus-operated Weyburn Unit would be the ultimate recipient of SaskPower’s captured CO2. The company would use the new source of carbon dioxide to complement CO2 that has been supplied by a North Dakota supplier since 2000. Cenovus spokesperson Jessica Wilkinson responded to our e-mailed questions on Sept. 16.

Pipeline News: Why did Cenovus (formerly EnCana) embark on buying CO2 from the Boundary Dam Integrated Carbon Capture and Storage Project? How important is this additional CO2 to the operation and future of the Weyburn Unit? Jessica Wilkinson: Ensuring that we have a consistent and adequate supply of CO2 is critical to maintaining our CO2 enhanced oil recovery project in Weyburn. Securing an additional source of CO2 provides greater certainty of supply than is available with a single source. It helps ensure we will continue to receive CO2 if there is a scheduled or

unscheduled outage at either supplier. P.N.: We understand Canadian Natural Resources was also interested in purchasing this CO2. How important was it to lock up this supply before someone else did? Wilkinson: You would have to ask SaskPower about any other interested parties. For us, the deal made sense. The CO2 from SaskPower is similar to the CO2 provided by the Dakota Gasification Company, and it’s close to our operations – both of which are important factors in securing CO2 supply for enhanced oil recovery. ɸ Page A41

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Cenovus Goodwater plant. Photo courtesy Cenovus

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ɺ Page A39 One of the challenges we were faced with early on was the discovery of very small leaks of CO2 from our infrastructure at surface. These were quickly detected because the CO2 supply also contained small amounts of mercaptans and sulphide compounds – put simply, it smells bad. The tiny leaks happened because CO2 is a very effective solvent which dissolves petroleum-based sealants and lubricants used for the infrastructure. While the tiny CO2 leaks did not pose a risk, we wanted to stop them in order to eliminate the smell and prevent CO2 loss. To fix the problem, we started using different types of valves, sealants and lubricants. We also changed our maintenance practices to increase monitoring and ensure connections were tight. In addition, we made the

change to non-metallic pipe or pipe that is stainless steel or coated and less susceptible to corrosion. These changes combined were successful in stopping the tiny leaks. P.N.: Operations-wise, how do you do things differently in a CO2miscible flood field compared to a conventional oilfield? Wilkinson: The main difference is that we’ve introduced large volumes of gas (CO2), so rather than looking like a conventional oilfield the operation looks more like what you would find in a large natural gas operation. We move large volumes of high pressure gas and have processes like compression, dehydration and natural gas liquids recovery that aren’t typical for most conventional oil operations. The oil production and processing is very similar to any other oilfield.

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This pipeline, built in 2013, is the link between the carbon capture and the carbon storÄ‚Ĺ?Äž Ć‰Ĺ˝ĆŒĆ&#x; ŽŜĆ?͘ Photo courtesy Cenovus

like to add? Wilkinson: While producing oil from this field for over 60 years is an impressive technical feat, it’s more important that we can do it safely. In 2011, the Weyburn project celebrated an important milestone – 20 years without an employee lost-time incident. And earlier this year, we were hon-

oured to be recognized by WorkSafe Saskatchewan for our safety culture. We’re responsible for conducting all of our activities in a manner that ensures the health and safety of ourselves, our fellow workers and our neighbours in the communities where we operate. Everyone should go home at the end of the day, safe and sound.

PA TE Éş Page A40 P.N.: How much more production does Cenovus expect the additional CO2 will result in? How much longer do you think it will prolong the life of this field, now 60 years old? Wilkinson: Weyburn’s production averages around 25,000 barrels per day (gross). As we continue to inject CO2, we’ll be able to maintain oil production volumes that would have declined without the enhanced oil recovery. It’s hard to predict what the length of the field will be, because oil prices play a role in determining when it’s no longer feasible to produce from a field. Before we started injecting CO2 in 2000, we estimated there would be another 20 to 25 years of production left in the field. Of course, that would be declining production. The CO2 flood is estimated to have added an additional 30 years to the life of the field, which could result in an extra 200 million barrels of oil produced over the life of the operation. Again, that’s a difficult estimate to give since new technology could mean we produce even longer. P.N.: Do you think anyone, 60 years ago, would have predicted this field would still be producing oil today, and will be for generations to come? Wilkinson: Probably not! The Weyburn project is a good example of the impact innovation has in the oil and gas industry. Very few people think of our industry as “high techâ€? but that couldn’t be further from the truth. The industry looks demonstrably different than it did 60 years ago, and continuous

investment in technology means it will likely look demonstrably different 60 years from now. P.N.: If SaskPower goes ahead with Units 4, 5 and 6, will you be interested in additional CO2? Was the pipeline built with that possibility in mind, i.e. additional capacity, or would you need to build another pipeline? Wilkinson: We can’t speculate on future opportunities. Right now, our focus is on maintaining our production at Weyburn. P.N.: Cenovus seems to make a priority of pursuing opportunities that aren’t simple. You’re in the oilsands, and in southeast Saskatchewan, you’re doing enhanced oil recovery. Why not just take the simple route? Wilkinson: We believe there is tremendous value in unlocking challenging oil resources. Our ability to develop these unconventional resources really stems from a long history in the oil and gas industry. We have decades of operating experience that we can leverage when coming up with new approaches in practical, yet creative way. P.N.: How many jobs will be created by this additional CO2 supply, both within Cenovus, and through contractors working for it? Wilkinson: We currently have about 85 full-time staff members working at the Weyburn project, with a number of additional contractors and service providers supporting our operations. We expect our staff count to stay relatively flat. We employed about 120 pipeline workers during peak construction. P.N.: Is there anything you would

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PIPELINE NEWS October 2014

+RZ GRHV D PLVFLEOH Ă RRG SURGXFH PRUH RLO" Weyburn, Calgary – This fall the Cenovus-operated Weyburn Unit celebrates its 60th anniversary since the drilling of the discovery well by Central Leduc Oils (later known as Central Del Rio) near Ralph. Over the years, numerous developments have extended the life of this field. Now, it looks like this field could be in operation for several more decades through enhanced oil recovery. Enhanced oil recovery using carbon dioxide is often called “tertiary recovery,â€? in that it is the third level of recovery. The first is relying on the pressure of the reservoir. Secondary recovery involves waterflooding, where water is injected into the reservoir. Tertiary recovery will usually involve thermal, gas injection and chemical flooding. The Weyburn Unit has been using a miscible CO2 flood in combination with waterflooding since 2000. Cenovus spokesperson Jessica Wilkinson explained some of the science behind this still-uncommon method of producing oil. Pipeline News: Can you please explain how CO2 works for enhanced oil recovery? Jessica Wilkinson: Under the right conditions (including temperature, pressure and oil composition), CO2 acts as a solvent and helps to access oil trapped in the microscopic pores of the reservoir rock. When CO2 mixes with oil at high pressures, it makes the oil thinner and causes it to swell (as much as 160 percent). This swelling pushes the oil out of the pores of the rocks in the reservoir, making it easier for oil to

flow into producing wells. This process greatly increases the recovery of oil from a reservoir compared to the recoveries normally seen by using a water flood alone. P.N.: What is a miscible flood? Wilkinson: Miscible flooding is a general term for injection processes that introduce miscible gases into the reservoir. P.N.: Why isn’t a waterflood good enough? How much more oil can you get with CO2? Wilkinson: All oil projects have to manage declines in production over time. There are a number of stages of recovery techniques that can be used to increase production and offset declines. Current daily production rates are approximately a 19,000 barrels per day gross increase over the 8,000 barrels per day that would have been produced without the CO2 enhanced oil recovery project. P.N.: We understand that the sour CO2 means corrosion is an issue and special measures (i.e. the use of stainless steel) need to be taken to contend with that. Can you elaborate? Wilkinson: Cenovus has spent about $1 billion upgrading the facility for CO2 flood. Our partners have invested roughly the same amount. The main prevention measure is material selection (non-metallic piping, stainless steel piping or polyethylene lined pipe), specialized coatings and corrosion inhibiting chemicals. We also conduct regular monitoring using

This graphic illustrates the CCS cycle. Graphic courtesy Cenovus

techniques like x-rays and ultrasonic testing to confirm integrity of piping and vessels

P.N.: Could this technology be used in other depleted fields, say the Steelman field? ɸ Page A43

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PIPELINE NEWS October 2014 ɺ Page A42 Wilkinson: Specific geology has to be present for CO2 to work as a method of enhancing oil recovery. For example, the underground rock can’t have too many fractures and the pressure has to be suitable. Operations also have to be close to a high purity source of CO2 to make it financially feasible. There is a lot of research involved to determine whether an oil property is suitable for CO2 enhanced oil recovery. This takes money and patience. The company’s executive also has to be in agreement that CO2 enhanced oil recovery is the best route to take. A lot of oil operations are owned by partnerships and it can be a challenge

to get all partners to agree to put in the facilities needed for CO2 enhanced oil recovery, as well as invest in the initial research to ensure the field is appropriate. Plus, CO2 is just one form of enhanced oil recovery. There are many other techniques being tested. P.N.: A few years ago a local farmer thought they had CO2 leaking to the surface on their land. Several studies found this not to be the case. How do you ensure that what goes underground, stays underground? Wilkinson: Independent researchers have verified the CO2 will remain underground for the long-term. It is about 1,400 metres underground and has several layers of cap rock over it, which prevents the gas from rising to

the surface. The presence of cap rock is one of the reasons CO2 enhanced oil recovery is successful at Weyburn. We use 4-D time-lapse seismic to monitor the CO2 flood. Additionally, we can confirm where the CO2 has moved underground based on which wells are producing CO2 with the oil. We’ve also improved the gas compressor design and made alterations to our wellhead design including making the infrastructure more resistant to corrosion. Each well is inspected regularly with routine regular inspections plus other checks through ad hoc drive-bys as well as inspections when mainte-

A43

nance work is taking place. There are also regular flyovers of the field to look for anything abnormal. P.N.: What is the next step, beyond a CO2 miscible flood? Is there something else on the horizon, or will it be a refinement of what you are doing today? Wilkinson: Right now we’re focused on maintaining oil production volumes that would have declined without the enhanced oil recovery. We plan to continue to expand the flood although decisions have not yet been made about the pace of that expansion.

ZÄ‚ÄŤ ÄžĆŒĆšÇ‡ KĎŽ WĹ?ƉĞůĹ?ŜĞ The Cenovus CO2 Pipeline was built in 2013. It is 66 km long. Much of it parallels the Souris Valley Pipeline. Photo courtesy by Cenovus

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PIPELINE NEWS October 2014

A45

60 years ago, Ken Cugnet saw the start By Brian Zinchuk Weyburn – Sixty years ago, the discovery well of what would eventually become known as the Weyburn field was drilled near Ralph by Central Leduc Oils Ltd., a company which became Central Del Rio Oils Ltd. in 1957 with the merger of Del Rio Oils. The discovery well at 14-7-7-13-W2 came in during the fall of 1954. Now, with the impending arrival of additional carbon dioxide from the Boundary Dam Power Station, that 60-year-old field is expected to produce for decades to come. According to PetroleumHistory.ca, “Central-Del Rio was purchased by Canadian Pacific Oil and Gas in 1969. However, the company continued to operate under the Central-Del Rio name until 1971 when its name changed to PanCanadian Petroleum Limited. “PanCanadian was purchased by Alberta Energy Company in 2002 and became EnCana. Later EnCana was split into EnCana and Cenovus.” Cenovus Energy Inc, launched in 2009, now operates the unitized Weyburn field on behalf of its many partners. One person who had a very unique perspective on this development was Ken Cugnet, whose family farm was very close to the discovery well. Cugnet’s many business interests include running junior oil producer Valleyview Petroleum and as well as being a long-time board member of Crescent Point Energy Corp. It all started when he was eight years old. The tool push for that rig became a bit of a hero for Ken and his twin brother Dick, as he visited the Cugnet farm regularly to use their phone to call in his morning reports. Ken was fascinated with the technology of the day and it was exciting to grow up in the midst of the development of a new oil field. Ken would go onto his first job in the patch in 1962, at the age of 16, tying steel for the Shell plant at Midale, kicking off a long and storied career which

<ĞŶ ƵŐŶĞƚ͛Ɛ Į ƌƐƚ ĞdžƉŽƐƵƌĞ ƚŽ ƚŚĞ ŽŝůĮ ĞůĚ ǁĂƐ ǁŚĞŶ ƚŚĞ tĞLJďƵƌŶ ŽŝůĮ ĞůĚ ĚŝƐĐŽǀĞƌLJ ǁĞůů ǁĂƐ ĚƌŝůůĞĚ ŶĞĂƌ ŚŝƐ ĨĂŵŝͲ ůLJ ĨĂƌŵ ǁŚĞŶ ŚĞ ĂŶĚ ŚŝƐ ƚǁŝŶ ďƌŽƚŚĞƌ͕ :ŝŵ͕ ǁĞƌĞ ũƵƐƚ ĞŝŐŚƚ LJĞĂƌƐ ŽůĚ͘ dŚĞ ǁĞůů ǁĂƐ ůŽĐĂƚĞĚ Ăƚ ϭϰͲϳͲϳͲϭϯͲtϮ͕ ŽŶ ƚŚĞ ĨĂƌŵ ŽĨ ZŽďĞƌƚ ĂŶĚ ĚŝƚŚ ŽƌƐĐŚ͘ dŚŝƐ ϮϬϭϮ ƉŚŽƚŽ ǁĂƐ ƚĂŬĞŶ ŽŶůLJ Ă ĨĞǁ ŵŝůĞƐ ĨƌŽŵ ƚŚĂƚ ƐŝƚĞ͘ Photo by Brian Zinchuk

culminated in the honour of being named Southeast Saskatchewan Oilman of the Year in 2007, along with Jim Boettcher. When accepting the award, Ken’s speech recalled the earliest days of the field. Here are some excerpts, talking about the Weyburn field’s early days: “As stated, my love affair with the oilpatch started when I was eight years old with the drilling of the Weyburn Unit discovery well on a neighbour’s farm, the farm of Robert and Edith Dorsch. For my twin brother and I, it was the beginning of our careers in

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the oil service industry. “With the arrival of rig personnel and their families, our farmyard became a camp for these “oilpatch gypsies” who were happy to be able to plug into the farm power pole. As many as ten trailers were parked on our doorstep. We were the first episode of 'Trailer Park Boys.' “Dick and I learned the art of negotiation, selling eggs and milk. We babysat their children. We picked their beer bottles. Our piggy banks quickly filled with this newfound wealth. And these temporary neighbours were a great source of gossip and stories. “And we also learned an early valuable lesson about how quickly the oil business can go south in a hurry. We never know when someone in power will pull the plug. “I remember we asked our mother, Irene, how come the water hauler, whose wife was in the hospital, was spending the night in the driller’s trailer when the driller was at work? The next morning my mom unplugged the water hauler’s power and he was sent on his way. Dick and I experienced an immediate 20 per cent drop in cash flow. Eventually the rigs and trailers moved on. Our service industry was reduced to the discarded pipe, threads, and collars which Dick and I sold to the scrap dealer. Life was not as exciting and we left with memories and a lifetime addiction to oilpatch stories. And this, I suspect, was the reason we both chose careers in the oilpatch.” Cugnet told Pipeline News on Sept. 23, “The irony is they had drilled subsequent wells to north of it and west of it. The one to the north produced for a very short time. The one to the west was dry. This well was the most northwest well in that field that was producing. It was the very edge of the field. That’s how close they came to missing it. “Back in those times, the men sometimes had to take shares as wages, because they didn’t have money to pay them.” (See related story B30)

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PIPELINE NEWS October 2014

Canyon Technical Services disaster exercise

Paramedic Shawn Pryznyk checks on Dave Johnson, the ŝŶũƵƌĞĚ ƐŚŽƉ ĨŽƌĞŵĂŶ͘ Photos by Brian Zinchuk

Canyon Technical Services in Estevan did something different with its emergency exercises this year. Instead of just doing it on their own, they invited all the local emergency services to take part. The scenario was someone had made threats to Canyon. A few days later, a suspicious package arrives by courier and “blows up” when opened in the front office. Other devices are found on the facility and also “go off.” The plot was reminiscent of the oilfield bombings in northeast British Columbia several years ago. Estevan Fire Services, Estevan Police Service, RCMP, Sun Country EMS, City of Estevan, Estevan EMO, local media, SaskPower and SaskEnergy took part in addition to numerous Canyon Technical Services personnel. Workers were done up in makeup to look like realistic victims. Firefighters entered the building on their hands and Knees, calling out for responses from victims. An RCMP drone quadcopter was used to search the premises as well. Four “victims” were carted off the Estevan St. Joseph’s Hospital for “treatment.”

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PIPELINE NEWS October 2014

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PIPELINE NEWS October 2014

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PIPELINE NEWS

SECTION B October 2014

The 2014 Lloydminster Heavy Oil Show Ä‚ĆŠ ĆŒÄ‚Ä?ƚĞĚ ϲÍ•ĎŽĎŹĎŹ Ç€Ĺ?Ć?Ĺ?ĆšĹ˝ĆŒĆ? Ç ĹšĹ˝ Ć?Ä‚Ç Ä‚ ĆŒÄžͲ Ä?Ĺ˝ĆŒÄš ώϲϏ Ĺ?ŜĚŽŽĆŒ ĂŜĚ ŽƾƚĚŽŽĆŒ ĞdžŚĹ?Ä?Ĺ?ĆšĆ? Ä‚Ćš ƚŚĞ ĞdžŚĹ?Ä?Ĺ?Ć&#x; ŽŜ Ĺ?ĆŒŽƾŜÄšĆ?͘ WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ

6,200 at Lloyd oil show, Connolly a hit „ By Geoff Lee Lloydminster – The 2014 Lloydminster Heavy Oil Show attracted 6,200 visitors, 700 more than the previous show two years ago. The outcome put a smile on the face of show chair Paul Klaassen who had one reason top of mind for the strong turnout. “I think the oil company people let some of their people come to the show,� he said in keeping with his pre-show marketing message. The directory of regional bus companies on the show website also worked to draw oil and gas workers from outlying areas to this year’s show held Sept. 10-11. “We have one company send a busload of employees down from Bonnyille,� said Klaassen. “Good attendance came out of the Kindersley and Kerrobert areas. I heard that from the committee members.� Despite dozens of new hotel and motel rooms in Lloydminster since the previous show, there wasn’t a room to be had throughout the event.

“I heard of a guy staying in Edmonton running back and forth because he couldn’t get any hotel rooms closer,� said Klaassen. He said it didn’t help that the new 120 room Hampton Inn & Suites being built at the west end of Lloydminster was not able to open in time for the show. Despite the room shortage, this year’s show attracted a record 260 exhibitors with most of them promising to register for the next show in 2016. “Probably 95 per cent of the people in the booths said they would come back. We were up 24 from the last show,� said Klaassen. He also said most exhibitors reported the quality of attendees was better this year with more feedback and suggestions to come. “We’ve got a post show meeting next week to find out what went right and what went wrong and then we’ll do our report,� said Klaassen on Sept. 15. “The committee does a report up, so everything’s fresh in our minds, so everything will be set for 2016.� This year’s show took place in the fully reno-

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vated Lloydminster Exhibition Grounds which saw the return of the popular people moving carts in the parking lot that exhibitors liked. The highlight of the entire show from Klaassen’s perspective was the banquet speech by Ed Connolly, senior vice president of heavy oil and gas from Husky Energy. “It was the first time we were able to get Husky to be the guest speaker at the oil show,â€? said Klaassen. “I really enjoyed his comments about how he hammered home the innovations of Lloydminster for heavy oil in the world. “That and how long heavy oil is going to be here.â€? Approximately 600 people attended the banquet to hear a wealth of speakers including Alberta Energy Minister Diana McQueen in the lead up to Connolly’s memorable address. “Actually I really enjoyed Ed Connolly’s comments on heavy oil saying that Husky’s been here for 68 years and will be here for another 70,â€? said Klaassen of his banquet highlight. ɸ Page B2

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PIPELINE NEWS October 2014

'We really haven't even touched it' Éş Page B1 “Like he said, after 20 years if you’re in a gas field, it starts declining. “After 30 years, conventional oil starts declining, but heavy oil – unless it’s a SAGD – and one (Pikes Peak) was at 70 cent per cent recovery – we are still below 10 per cent oil recovery.â€? “We really haven’t even touched it.â€? Connolly noted there were about 18 billion barrels of oil on the Saskatchewan side of Lloydminster to sustain Husky’s production for 70 more years through new innovation and technology. “It’s just all the new technology. They need the technology to make it profitable for them to pull it out of the ground every year,â€? said Klaassen “Something keeps happening to make it more profitable.â€? Lloydminster MLA Tim McMillan joked at the banquet that Klaassen, who manages PWM Steel, will be recycling outdated technology displaced by new technology exhibited at the oil show “That’s an ongoing thing. We taking old technology and screw ups,â€? reported Klaassen with a laugh. (Editor’s note: With so much having taken place at the 2014 Lloydminster Heavy Oil Show, we couldn’t squeeze it all in one edition! In addition to what you see this month, Pipeline News will continue its coverage of the in the November issue with more stories and photos.)

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PIPELINE NEWS October 2014

B3

Innovation key to Husky’s next 70 years „ By Geoff Lee Lloydminster – Innovation has a way of turning copper into gold. Those were the words of Ed Connolly, senior vice president of heavy oil and gas for Husky Energy in his keynote speech at the 2014 Lloydminster Heavy Oil Show banquet in keeping with the show theme – Pipelining Technology Forward. Husky currently produces about 120,000 barrels per day of heavy oil and most of that comes from the Lloydminster region spanning Saskatchewan and Alberta. Connolly spoke about how Husky can sustain production over the next 70 years by continuing on the path of innovation that drives industry in Lloydminster. “I see Lloydminster really as the place in this planet where technology is developed for heavy oil,� Connolly told Pipeline News. “It manifests its way all across the world. They’ve got a history of doing this for 70 years and they’re just a very innovative society. “The whole community is engaged with the oil industry. They work hand in hand together to develop that. “They’ve gone through ups and down and every type of environment climate has been put to them and they’ve survived it. I see Lloydminster really as the leader in innovation for heavy oil.� Innovation has helped Husky to produce 50,000 barrels of oil a day today from cold heavy oil production with sand (CHOPS) developed in the 1990s, and over 13,000 bpd from horizontal well technology today. Connolly drilled Husky’s first horizontal well in the Lloydminster area in 2008. Over the last five years, Husky has also doubled

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their thermal production to 45,000 bpd with plans to double that again by the end of the decade. Connolly’s four point prescription for sustaining Husky’s production is based on a proven resource base of 18 billion barrels of oil on the Saskatchewan side of the border city alone, support from governments and the community and innovation and technology development. In his summary, Connolly told the audience of 600 at the Lloydminster Exhibition Grounds that

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all four pieces of his plan are already set in motion. “Number one, the resource side – you certainly have this,â€? he said. Earlier in his talk, he said Husky has produced about 900 million barrels in the last 70 years and most of the oil is still in the ground. “Government support – the Province of Alberta, the Province of Saskatchewan, the country of Canada – you certainly have that,â€? he said. ɸ Page B4

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PIPELINE NEWS October 2014

The lifeline of heavy oil is innovation Éş Page B3 Connolly made special note of Alberta’s $90 million research commitment from 1983 to 1992 that made SAGD feasible for sustaining oilsands operations that were too deep to mine. He said the fact the Alberta government generated $1.5 billion in royalties from SAGD in 2013 proves that investment has more than paid for itself. Similarly, the Lloydminster Husky Upgrader wouldn’t have been built without investment from the Saskatchewan government. “Today, we process 80,000 barrels of oil through the upgrader,â€? said Connolly. “That’s enough feedstock to send to the refinery to make

gasoline and diesel to power every single car and every single truck in Saskatchewan. That wouldn’t happen with government.� Connolly said finding community support for innovation in Lloydminster is a no brainer. “You couldn’t find a place in this planet to give more community support,� he said. “Innovation – you’ve been leaders for years. This is Lloydminster.� He said innovation and technology development hinges on developing the right tools that extend the five senses, including data collection and analysis, collaboration, and having the will to recover more oil. “We recognize the lifeline of heavy oil is innovation and new technology development,� said Connolly.

He noted Husky just produced its one millionth barrel of incremental oil using cold solvents beginning in 2006. Husky is also piloting technology today at its Pikes Peak South thermal plant to capture carbon dioxide for enhanced oil recovery applications in the Lloyd block. “Husky also has a project underway called hot water vapor,� said Connolly. “This is a project where we take nitrogen out of the air. We heat it up saturate it with water and inject it into a reservoir and we produce oil. We will run that pilot for three years.� Connolly noted Husky is running a couple of ASP floods (alkaline surfactant polymer) to increase the efficiency of heavy oil

that’s produced. The company is also experimenting with a couple of microbial projects to enhance oil recovery along with chemical floods. Husky is also conducting firefloods in Alberta as part of its innovation push. “Those are some of the initiatives Husky has underway to look to our future,� said Connolly. He added that when he came to work for Husky in 2006 out of retirement, production was on the decline in Lloydminster, but thanks to innovations such as thermal oil production, he firmly believes production is sustainable for decades. “I now believe you have 70 years in front of you. The people in this room and this community they have the vision,� he told the audience. “They have the capacity to take on this challenge. Lloydmin-

Alberta Energy Minister Diana McQueen spoke to an audience of 600 at the 2014 Lloydminster Heavy Oil Show Ä?ĂŜƋƾĞƚ Ä‚Ćš ƚŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ džŚĹ?Ä?Ĺ?Ć&#x; ŽŜ 'ĆŒŽƾŜÄšĆ? ŽŜ ^ÄžĆ‰ĆšÍ˜ 9 on the importance of the heavy oil industry in the reĹ?Ĺ?ŽŜ ƚŽ ƚŚĞ Ć‰ĆŒĹ˝Ç€Ĺ?ĹśÄ?Äž ĂŜĚ ƚŚĞ Ĺ?ŜŜŽÇ€Ä‚Ć&#x; ŽŜ ƚŚĂƚ Ä?ŽžÄžĆ? ĨĆŒŽž ƚŚĞ Ä‚ĆŒÄžÄ‚Í˜ ^Ĺ?ĹśÄ?Äž ƚŚĞ Ĺ˝Ĺ?ĹŻ Ć?ĹšĹ˝Ç Í• DÄ?YƾĞĞŜ ŚĂĆ? Ä?ĞĞŜ ĆŒÄžĆ‰ĹŻÄ‚Ä?ĞĚ Ä?LJ &ĆŒÄ‚Ŝŏ KÄ?ÄžĆŒĹŻÄž Ä‚Ć? ĹśÄžĆŒĹ?LJ ĹľĹ?ĹśĹ?Ć?ĆšÄžĆŒÍ˜

ster’s been running this challenge for 70 years. I believe now that we’ve done 70 years, I see another 70 years in front of you.� Connolly’s message was picked up by Alberta Energy Minister

Diana McQueen who liked what she saw during an afternoon tour of show exhibits. (Since the oil show, McQueen has been replaced by Frank Oberle as Energy minister.) ɸ Page B5

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PIPELINE NEWS October 2014 Éş Page B4 “I was really impressed with the tour that we had. First of all, the size of the show; it’s a very good show. They were telling me there is a waiting list to get in there as well,â€? she told Pipeline News. “Some of the technology that’s there – I think that just speaks to the innovation in Alberta.â€? In her formal remarks, McQueen thanked Oilfield Technical Society (OTS) president Doug Gray for leading the tour with Lloydminster MLA Tim McMillan, show chairperson Paul Klaassen, VermilionLloydminster MLA Richard Starke and Lloydminster Mayor Rob Saunders. “The Lloydminster field has always been very important to us. It’s very progressive,â€? she told the crowd at the Lloydminster Exhibition Grounds. “I think that speaks volumes if you think about the number of people that are here this evening and the number of people that go through the trade show every other year. “It speaks volumes for what you are doing in this area and what you mean in this province.â€?

McQueen also passed on greetings from Alberta’s premier Jim Prentice and his support for the oil industry. “Job one for me as energy minister is certainly opening new markets and market access. Our new premierelect Jim Prentice spoke of that as well,� she said. McQueen noted new pipelines are needed to tidewater ports on the east coast, the west coast and the U.S. Gulf Coast as production from Lloydminster and other conventional oil and gas and oilsands plays in Alberta will continue to grow. “We are very fortunate. Our troubles we have here are troubles other people would like to have – shortages of labour, infrastructure issues. These are challenges and opportunities for us,� she said in her closing comments.� Lloydminster Mayor Rob Saunders was also on hand to welcome guests to the 2014 heavy oil and the city. “The city of Lloydminster in this region is very positively impacted by the heavy oil activity and the industry with the many jobs, our low unemployment, the economic wellness that’s derived our community

investments, and our volunteer resource base,� he said “I’d like to make special note that this year, in 2014, Lakeland College in Lloydminster is opening an Energy Centre that will be schooling power engineers to help fuel the thermal projects in the whole region and the heavy oil area.� Kara Johnston, dean of energy programming at Lakeland, told Pipeline News the opening of the Energy Centre has shifted from Nov. 14 to Nov. 18 to avoid a conflict of guest speakers. She said she was excited to be at the show as the only educational institute to exhibit. “We are excited to have an opportunity to showcase our programs and our facilities,� said Johnston. “We are going to be promoting our grand opening which is coming up Nov. 18 ... and what kind of equipment we’re going to have in our lab.� All 140 energy students were expected to tour the final day of the show held Sept. 10-11. “It’s a really great opportunity,� said Johnston. “It’s a phenomenal group of people to have all in one room with industry and govern-

ment.� Other guest speakers including Gray who introduced volunteer OTS executive members that organize the show to a hearty round of applause. Show chair Paul Klaassen tipped his hat to the organizing committee and local business sponsors. “Please join the 2014 heavy oil show – Pipelining Technology Forward,� he said in his wrap up comment. Mike McIntosh from the Lloydminster chapter of the Society of Petroleum Engineers invited everyone to attend a two day series of technical presentations held in conjunction with the oil show. Former Saskatchewan energy minister Tim McMillan, who was minister responsible for Rural Health and Remote Health until his resignation on Sept. 18, passed along his greetings on behalf of the province. Starke, who was not a speaker, was introduced in the audience by McQueen.

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SPE Canada rep lauds Lloyd oil speakers The presentations by Noralta Technologies, Tartan Canada, Blue Spark Energy and Plainsman Manufacturing drew a total of 67 people to the Prairie Room in the Lloydminster Exhibition Grounds. That’s down from approximately 300 people who took in the presentations during the 2012 show leaving McIntosh to speculate the cause. “Without doing pre-registration, you are never really sure of what the attendance is going to be,� he said. “Some sessions definitely – we would have liked to see the

dŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ Ć?ÄžÄ?Ć&#x;ŽŜ ŽĨ ƚŚĞ ^Ĺ˝Ä?Ĺ?ĞƚLJ ŽĨ WÄžĆšĆŒŽůÄžƾž ĹśĹ?Ĺ?ĹśÄžÄžĆŒĆ? Íž^W Íż ŚŽĆ?ƚĞĚ ĨŽƾĆŒ ƚĞÄ?ŚŜĹ?Ä?Ä‚ĹŻ Ć‰ĆŒÄžĆ?ĞŜƚĂĆ&#x;ŽŜĆ? ÄšĆľĆŒĹ?ĹśĹ? ƚŚĞ ĎŽĎŹĎ­Ď° >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ,ĞĂǀLJ KĹ?ĹŻ ^ĹšĹ˝Ç Í˜ ^W ĂŜĂĚĂ ĆŒÄžĆ‰ Ä‚ĆŒÄ?LJ ^ƉĂĚLJ ĨĆŒŽž ^Ä‚ŜŊĞů Ĺ˝ĆŒĆ‰Í˜ Ĺ?Ĺś Ä‚ĹŻĹ?Ä‚ĆŒÇ‡ Ç Ä‚Ć? Ĺ?ĹľĆ‰ĆŒÄžĆ?Ć?ĞĚ Ä?LJ ƚŚĞž Ä‚ĹŻĹŻ ĚĞĆ?ƉĹ?ƚĞ ĹŻĹ˝Ç Ĺ˝Ç€ÄžĆŒÄ‚ĹŻĹŻ ĂƚƚĞŜĚĂŜÄ?Ğ͘ ,Äž ŜŽĆšÄžÄš ƚŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ^W Ç Ĺ?ĹŻĹŻ ŚŽĆ?Ćš Ĺ?ĆšĆ? ÄŽĆŒĆ?Ćš Ç Ĺ˝ĆŒĹŹĆ?ŚŽƉ Ä‚Ćš Ä‚Ĺś Ĺ?ĹśĆšÄžĆŒĹśÄ‚Ć&#x;ŽŜÄ‚ĹŻ ůĞǀĞů ĨĆŒŽž :Ä‚ĹśÍ˜ ĎŽĎł ƚŽ ĎŽĎ´ Ĺ?Ĺś ĎŽĎŹĎ­ĎąÍ˜ WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ

“Every show that we do this, we learn a little more. We look at ways to improve. We’ve

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„ By Geoff Lee Lloydminster – They came, they saw, they conferred – and they enjoyed. That’s the way it was for attendees, presenters and organizers of technical sessions held in conjunction with the 2014 Lloydminster Heavy Oil Show Sept. 10-11. “We’re really excited about the way things went,� said event chair Mike McIntosh from the host Lloydminster section of the Society of Petroleum Engineers (SPE).

attendance better. “Those are some of the things we are looking at – what can we do to spread the word better that they are going on, and see if that affects attendance.� SPE Canada representative, Darcy Spady, who works for Sanjel Corp. in Calgary as a regional director of client solutions, sat through all of the talks and declared them a success. “Oh, they were great. I attended all four,� said Spady. “The beauty of this at the section level is that it doesn’t have to be all official at the international standards. “You can have a

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little more loose kind of conversation and a little more dialogue as to what’s happening locally. “That’s what I really like about SPE. It’s all volunteer-driven, so there are no agendas. Spady is one of 26 volunteer SPE International board members representing more than 125,000 members worldwide. “Sometimes. the sections which are quite autonomous have the ability to put all kinds of ideas in a very informal way then it gets caught by Canada and SPE International in an orderly fashion,â€? he said. ɸ Page B8

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PIPELINE NEWS October 2014

Technical sessions highlighted

Mike McIntosh, chair of the technical sessions held during the 2014 Lloydminster Heavy KĹ?ĹŻ ^ĹšĹ˝Ç Í• ĚĞůĹ?Ç€ÄžĆŒĆ? ĹšĹ?Ć? ĎŜĂů Ä?ŽžžÄžĹśĆšĆ? Ä‚Ćš ƚŚĞ WĆŒÄ‚Ĺ?ĆŒĹ?Äž ZŽŽž Ĺ?Ĺś ƚŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ džŚĹ?Ä?Ĺ?Ć&#x;ŽŜ 'ĆŒŽƾŜÄšĆ?͘ DÄ?/ŜƚŽĆ?Ĺš Ç Ĺ?ĹŻĹŻ Ä?ŚĂĹ?ĆŒ Ä‚Ĺś ^W ĂŜĂĚĂ Ç Ĺ˝ĆŒĹŹĆ?ŚŽƉ ŽŜ ƚŚĞ ĨƾĆšĆľĆŒÄž ŽĨ ŚĞĂǀLJ Ĺ˝Ĺ?ĹŻ Ĺ?Ĺś Lloydminster from Jan. 27 to 28 in 2015.

Éş Page B7 The SPE Lloydminster section plans to resume its popular monthly technical lunch

presentations at the Prairie Room on Oct. 8 The first talk is titled Formation Damage Matters – Sometimes, by Michael Byrne, a

global technical head, formation damage for Senergy in Aberdeen Scotland. “I’ve attended one that a fellow from

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Sanjel presented,� said Spady who was not sure it was in 2012 or 2013. “Sanjel is my day job, so I came up for that. I was really impressed by the amount of people they had here. “The Lloydminster group has always had a tremendously strong luncheon crowd – second best in the country after Calgary.� The Lloydminster section won a SPE International President’s

Award for section excellence in 2012. SPE Canada is hosting an international workshop in Lloydminster titled Vision 20/20: A Workshop Exploring the Future of Heavy Oil from Jan. 27 to 28 in 2015. This is first time a workshop will be held in Lloydminster at the international level and will be chaired by McIntosh. The workshop will

provide an opportunity for operators, service companies, international specialists, educators, and government officials to exchange ideas on the latest technologies and operating practices. “This area has been known worldwide for innovation. Anytime groups can get together and exchange ideas and knowledge, I think it’s for the betterment of all of us,â€? said McIntosh. ɸ Page B9

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PIPELINE NEWS October 2014 ing achievements and lessons learned. At the Lloydminster workshop, there will no papers published and the media is not invited in order to “stimulate frank discussionâ€? according to the workshop website. “It’s not that it’s closed to anybody; it’s just only for paid attendees including the people speaking,â€? said Spady. The workshop will focus discussion in Lloydminster on the challenges the heavy oil industry may face by 2020 including infrastructure, facilities and transportation and how to develop technology to increase recovery rates. “The Lloydminster Leon Sampson, vice-president of projects and technical services at Tartan Canada Corp. Ĺ?Ĺś ÄšžŽŜĆšŽŜÍ• ĚĞůĹ?Ç€ÄžĆŒÄžÄš Ä‚ Ć‰ĆŒÄžĆ?ĞŜƚĂĆ&#x; ŽŜ ŽŜ ĹšĹ˝Ç ĆšĹ˝ ĚĞǀĞůŽƉ Ä‚ Ç Ĺ?ĹśÍ˛Ç Ĺ?Ĺś žĂĹ?ŜƚĞŜĂŜÄ?Äž Ć?ĆšĆŒÄ‚ĆšͲ ÄžĹ?LJ͘ dÄ‚ĆŒĆšÄ‚Ĺś Ć?ƉĞÄ?Ĺ?Ä‚ĹŻĹ?njĞĆ? Ĺ?Ĺś ƉůĂŜƚ ĂŜĚ ÄŽ ĞůĚ žĂĹ?ŜƚĞŜĂŜÄ?Äž ĂŜĚ ĆšĆľĆŒĹśÄ‚ĆŒŽƾŜÄšĆ?͘

Éş Page B8 SPE International puts on forums, workshops and conferences. “As a Canadian, I love the way this region seeds ideas on heavy oil. It’s seeded through the paper submission process at conferences and it’s seeded through workshop participation,â€? explained Spady. “The workshop is kind in the middle of the two where we have people come to it, not with new papers, but

with previously discussed papers. “It’s a small gathering – usually about 70 to 120 people and whole point is to get discussion in the room.� Spady noted SPE Canada does workshops better than anyone else in the world. “What we want to do this year is make sure we have more workshops in the outlying areas and less in Calgary,� he said “We have two in

Calgary and two in Banff this year. We’ve actually held two workshops in Halifax. We have one this fall in Vancouver and now there will be one in Lloyd. “People from all over the world attend these workshops. Getting them exposed to Lloyd and to Halifax is part of my mandate.� Workshop presentations are usually in the form of case studies, highlighting engineer-

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area is a world leading technology area,� said Spady. “I see it all the time when the guys from Kuwait come and they want to know our technology, and the guys from the southern U.S. come and want to know our technology and Venezuela. Spady expects attendee makeup will to be one third local people, a third from within the Western Canadian Sedimentary Basin and a third from overseas. “I hope we get some Kuwaitees and some Venezuelans. It’s just a gathering point for that technical dissemination which is what the SPE is all about,� said Spady.

“There’ s all kind of stuff right from this area that’s a breeding ground so the SPE wants to make sure we capture some of the local innovation.� Meanwhile, the Lloydminster SPE section is not likely to extend its run of technical symposiums that ended when technical presentations were first added to the heavy oil show in 2012. “We probably won’t be doing any of those. We’re going to stick to doing our technical luncheons,� said McIntosh. “If the oil show wants to work with us again in two years, we’ll be doing presentations as we’ve done this year.�

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HTC carbon capture pilot set to operate „ By Geoff Lee Regina – HTC CO2 Systems Corp. in Regina will be the first of three companies to operate a carbon capture pilot unit at Husky Energy’s Pikes Peak South thermal facility near Lashburn. Pilots are also being developed by CO2 Solutions and Inventys Thermal Technologies to test and evaluate technologies for potential commercial use of CO2 in enhanced oil recovery (EOR). All of the projects will capture approximately 35 tonnes of CO2 a day from a once-through steam generator at Pikes Peak used to produce heavy oil by steam-assisted gravity drainage or SAGD. The project design calls for captured CO2 to be piped it to an existing compression facility then injected it into partially depleted oil reservoirs to boost heavy oil production. HTC CO2, a subsidiary of Regina-based HTC Purenergy Solutions, expects have its proprietary LCDesign for building a low cost carbon capture unit operating by late fall. “We are hoping for late this year, probably December sometime,� said Purenergy senior vice president and director Jeff Allison in an interview from Regina. “We did all the process design and we’re doing the contracting of the unit and are subcontracting it to Enerflex. “We use a lot of oilfield technology – things are built on skids – using standard parts and components so that we can manage the costs.� Allison said if the pilot works well, Husky is likely to build a large capture unit in the Lloydminster area. “This is a fairly small one at 30 (tonnes) but they could probably put in one for 100 or 500

This is an aerial view of Husky’s Pikes Peak South thermal facility near Lashburn. The plant is the focus of pilot testing various carbon capture technologies to reduce emissions and use CO2 to enhance oil recovery. WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ĆŠ ĞĚ

(tonnes) or something like that in one of their big plants there,� he said. The HTC CO2 pilot aims to incorporate its post-combustion amine technology in a carbon capture unit to reduce emissions by about 30 tonnes a day. The HTC CO2 unit is designed to capture about 50 per cent of the flue gas emissions from a gas fired 50 million BTU once-through steam

generator (OTSG). Quebec based CO2 Solutions Inc., plans to use its alternative enzyme enabled carbon capture technology to build and operate a unit to capture about 15 tonnes a per day of CO2 at the SAGD facility. The enzyme-based solution will scrub CO2 from the emissions of the natural-gas-fired boiler at Pikes Peak South. ɸ Page B12

Mock Emergency Response Exercise September 16, 2014 Canyon Technical Services Ltd. would like to take this opportunity to thank everyone involved in the success of our Mock Emergency / Disaster Response Exercise. The enthusiasm displayed by all the participants to say the least overwhelming! The observations made and lessons learned by all those involved provided all of the participants a higher level of mutual respect and admiration for one another’s professions. In addition, Canyon would like to thank the following service professionals for their assistance in our exercise: 3 " & $ ") + 3 *+ - & '$" )-" 3 *+ - & ") )-" * 3 3 3 *+ - & ) ,)0 3 '$ & *+ "' + +"'& 3 "+0 ' *+ - & , $" ')#* %($'0 * 3 '' + )"& 2 1 "++$ *+ ' - &4 3 )" & "( $"& .* 3 ) &# & ) ) & "*# & % &+ 3 &*,) & % & % &+

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Thank you in particular to Helen Fornwald with the City of Estevan for her expertise. She made the planning of this daunting task smooth and easy for all the participants.

B12

PIPELINE NEWS October 2014

Husky hopes to capture 150 tonnes of CO2 Éş Page B11 The company is hoping its pilot will lead to commercial-scale projects that could scrub more than 150 tonnes a day of CO2 at the facility. CO2 Solutions has been actively working to develop and commercialize its technology touted as being able to lower the cost of carbon capture and sequestration (CCS) for stationary sources of carbon emissions. Inventys Thermal Technologies believes its post combustion VeloxoTherm process can provide an economical method to separate waste CO2from industrial flue gases. The waste CO2can then be used to produce oil in EOR applications. Husky began capturing CO2 at its Lloydminster ethanol plant in 2012 for EOR projects on new and existing reservoirs as part of an ongoing pilot program. The CO2 capture and liquefaction project in Lloyd converts approximately 250 tonnes a day of produced CO2 emissions into a liquid for use in EOR projects at Mervin, Lashburn and Tangleflags. The commercial potential for using captured CO2 from thermal facilities for EOR and depleted wells produced by cold heavy oil production with sand (CHOPS) is huge for Husky and the pilot companies. “Just with their experimentation of trucking in CO2, they’ve been able to take dead CHOPS wells and bring them back online,â€? said Allison. ,1'8675,$/ /$1' )25 6$/( &DOO IRU GHWDLOV ‡ RU

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“They’ve probably got 10,000 wells that could benefit from the technology and bring a lot of them back on their balance sheet.� The growth potential for capturing carbon for EOR is opened ended given Husky plans to double its thermal oil output in the region to over 80,000 barrels per day by 2019. Allison is confident the HTC CO2 LCDesign will prove to be a cost effective and energy efficient solution for Husky to take to a large commercial

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scale. “The amine capture process has been around for many years and it’s really well known,â€? he said. Allison notes the LCDesign incorporates CO2 technology that reduces energy usage, lowers environmental emissions and improves the quality of captured CO2. “It’s more commercial than some of the other ones (out there) which are a little bit ‘boutique-y,’â€? he said. ɸ Page B13

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PIPELINE NEWS October 2014

“Just with their experimentation of trucking in CO2, they’ve been able to take dead CHOPS wells and bring them back online. They’ve probably JRW ZHOOV WKDW FRXOG EHQHĂ€W from the technology and bring a lot of them back on their balance sheet.â€? - HTC Purenergy Solutions senior vice president and director Jeff Allison, referring to Husky’s CO2-EOR efforts Éş Page B12 “What we’ve done is sort of taken the basis process and looked at ways we can improve through our own processes to improve the design.â€? The project will also incorporate the HTC CO2 proprietary Solvent Reclaimer System. By analogy, reclaimers act as the kidneys of the CO2 capture units to filter the chemical solvents and restore their absorption efficiencies. Reclaimers are required to remove the degradation products and suspended solids from the solvents used in the CO2 capture process. The SRS System is intended to reduce solvent replacement requirements, lower energy costs, minimize plant maintenance and reduce waste disposal. “When you look at some of the big projects going on at Boundary Dam – it’s way out of line as far as cost per tonne,â€? said Allison. “It’s really about managing the energy costs – how much steam you have to use to strip the CO2 and how much to absorb it.â€? “We use a lot of

oilfield technology – things are built on skids – using standard parts and components so that we can manage the costs.� The HTC CO2 project is funded in equal parts by Husky, the Alberta government’s Climate Change and Emissions Management Corporation (CCEMC) and Saskatchewan’s Petroleum Research Incentive. HTC CO2 has offices in Sydney, Australia and Bettendorf, Iowa and is an industry leader in capture technology. “We’ve been involved in most of the larger projects around the world that have come up so it’s pretty common that what we are doing is the right thing,� said Allison, who noted other projects are in the works. “There’s some other ones sort of pending but

I can’t announce them yet until they give me authority. “We are primarily concentrating on the carbon capture for use in enhanced oil recovery purposes. “We spent a lot of lot years tracking big coal plants and big emitters like that,� he said. “I don’t think the world has really come to terms yet with reducing its emissions for environmental purposes, but there certainly is a need for CO2 as a commodity, especially when it can help you to increase your oil production.� Allison said Husky will be commissioning their pilot for several months but he expects Husky to release some results after six months of testing. “Seeing that it’s government-funded they do require that

they provide some of the results,� he said. CCEMC says the commercial application of carbon capture technology from the Husky pilots could reduce emissions in Alberta by 1 megatonne by 2021. CO2 Solutions announced its plans to build and operate a carbon capture pilot in collaboration with Husky in April 2014. The announcement projected an early 2015 startup of its capture unit with completion of testing in the third quarter of 2015. Subject to a positive review by Husky of the

6

results of the pilot test, the agreement provides for Husky to consider the use of CO2Solutions’ technology for commercial carbon capture projects. That projected will be funded in part by Canada’s ecoEnergy Innovation Initiative. CO2 Solution received $4.7 in ecoEnergy Innovation Initiative funds in January 2014 to support the development of its carbon capture technology in the Alberta oil sands including in-situ methods such as SAGD, and bitumen upgrading. “The pilot demon-

B13

stration of our technology is a significant milestone towards the commercial deployment of our technology for CO2capture and beneficial utilization applications such as enhanced oil recovery,� said Evan Price company president and CEO. “Husky is a recognized leader in the energy industry and will provide valuable expertise to this project.� Husky received about $2.95 million for its pilot demonstration project in July 2012 from CCEMC that pegs the total cost at $12.13 million.

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PIPELINE NEWS October 2014

Shell’s Quest CCS modules in place Edmonton – Shell Canada has installed the 69th and final module for the Quest carbon capture and storage project at its Scotford Upgrader north of Edmonton. The milestone was celebrated by an announcement on Aug. 27 that the facilities construction was 70 per cent complete with the project employing a peak workforce of 900. Today, crews are continuing to work on connecting the wires, pipe and control systems on the modules. The units were built of-site by KBR Inc. at Shell’s Edmonton Module Facility that helped Shell cut costs. The off-site work to date has involved providing pipe spool fabrication and module assembly for pipe, process, equipment and building modules. The KBR contract also involves the manufacture of a number of unique and new vertical modules and support for off-site testing and commissioning services

The modules will be used to capture more than one million tonnes of carbon dioxide a year from upgrading bitumen from the Athabasca oilsands into synthetic crude oil at Scotford. The capture unit was designed using Fluor’s 3rd Gen Modular ExecutionSM innovative proprietary technology. Shell credits the technology for significantly reducing the plot size of the unit and improving safety by relocating 90 per cent of the field hours to a module yard. Captured CO2 will be transported on a 60 kilometre underground pipeline north of the upgrader and injected and permanently stored two kilometres under ground. Construction of the connecting pipeline to three previously drilled injection wells is largely completed and on track for mechanical completion this fall. The captured CO2 will represent up to 35

Shell Canada has set the final module at its Quest oilsands carbon capture and storage project north of Edmonton. The project will start to inject CO2 from Shell’s oilsands operations two kilometres underground for permanent storage in 2015. Photo submitted

percent of the direct emissions from the upgrader which is the equivalent of taking 175,000 North American cars off the road The project will start to inject CO2 from Shell’s oilsands operations in 2015 with everything on schedule and budget. Quest CCS is being built by Shell on behalf of its Athabasca oilsands partners Chevron and

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year. “The Albertan and Canadian governments have been strong supporters of CCS; their leadership is an example for future projects worldwide.” During the 2014 fiscal year, Alberta is investing $144 million in the Quest and Alberta Carbon Line Trunk CCS projects. The province is committing $1.3 billion to the two projects over 15 years. “The Alberta government is committed to carbon capture projects. With them we are showing the world we take the responsible development of our resources seriously and we’re becoming a world leader in CCS technology,” said Diana McQueen Alberta Energy Minister in a spring 2014 budget statement. The Alberta Carbon Trunk project led by Enhance Energy Inc. will pipe CO2 captured from the North West Sturgeon Refinery and Agrium Fertilizer Plant at Redwater Alberta and

inject it into depleted oil reservoirs south of Edmonton for enhanced oil recovery. Both projects will store a total of 2.76 million tonnes of carbon dioxide per year. In addition to the environmental benefits of the Quest project for Alberta is the added value of developing the technology expertise. Once operational Quest will join a handful of commercial-scale CCS projects in operation worldwide and in the advanced development stage. Shell CCS projects include shares in an operational facility in Norway that tests capture technology, a gasfired power plant in the UK under design and a natural gas liquefaction project in Australia being constructed by Quest partner Chevron. A Shell subsidiary based in Quebec, Cansolv, provided the capture technology to the $1.3+ billion Boundary Dam CCS project near Estevan Saskatchewan.

PIPELINE NEWS October 2014

B15

/RFDWLRQ Ă H[LELOLW\ VHOO 5HLQKDUW EL] SDUN „ By Geoff Lee Lloydminster – Highway 16 frontage is one of the main selling points for companies looking to set up shop in the new Reinhart Business Park being developed and managed by the Reinhart Group of companies. The first 10 buildings are ready for occupancy with more companies waiting to build at the high profile subdivision. Nine of the new buildings are for Aecom Technology Corp.’s (formerly URS Flint) operations in Lloydminster with the 10th to house a relocating Cat Rental Store. Co-op is also constructing a bulk fuel station at the corner of Highway 16 and Range Road 14. There will be about 15 buildings on the highway side of the business park in the coming months. “They love the fact we are on Highway 16 and on Range Road 14 as well,â€?

said Jason Reinhart president of Reinhart Group. “Range Road 14 actually has a wide load area and turning radius for trucks and it has extra high power lines. ɸ Page B16

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PIPELINE NEWS October 2014

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From raw land to À QLVKHG EXLOGLQJV ɺ Page B15 “It’s on the ring road around Lloydminster so they can get around a lot quicker than going through Lloydminster. “They really enjoy the location and the access to the property.” Reinhart Group’s flexible building options are also generating strong interest from oil and gas companies looking to grow their footprint. “Build, purchase or lease is our motto because we take raw land, and we engineer it; we do the dirt work, and we work with the client to design the buildings,” said Reinhart. “In many cases, we lease the buildings and do maintenance on them as well.” Customers have the choice of lot sizes from one to 40 acres and buildings from 3,000 sq. ft. to 100,000 sq. ft. from the Reinhart land and building portfolio. “Basically we can custom design and build it for their needs,” said Reinhart. Only nine acres of Hwy 16 frontage are left in Phase 3, but buyers can acquire what they need from that parcel to suit their needs. “If someone wants to purchase two acres or five acres, we are happy to subdivide that for them,” said Reinhart. “Flexibility is the key to what we offer over anybody else. The right property can actually save a company money. “Your overhead is down because if you have a great facility for repairing and servicing vehicles that’s set up properly, it’s more efficient.” Reinhart said there are many ways of having the right property and the right design for future expansion. “A lot of guys don’t realize how busy Lloydminster is, and they build their buildings too small,” he said. “One of the key things that separates us from other people is we want to grow with our tenants and clients. “Many times a client will come into one of our subdivisions and the building is too small in two years. We’ll build them an addition or we’ll build them a new building that’s bigger. “Some clients like the fact that, if they are leasing from us and they want to buy land and buildings from us in the future, we can actually change the lease into a purchase for a future building.” The Reinhart Group is a distributor of metal buildings from Star Building Systems that can be designed to fit future expansion with column free interior spaces if desired. “It’s been a great product and we feel lucky to have the quality of Star with us,” said Reinhart. “When comparing a metal building to wood, a lot of times the price isn’t much different depending on the size. “The big difference is you have flexibility in the future. You can put cranes in it or you can modify it as needed. “The long term value is usually higher and, also in many cases, you get a discount on insurance because the flammability factor is less on a metal building.” The metal buildings going up at Reinhart Business Park will be used by businesses for repair shops, truck storage, warehousing and retail functions. Reinhart Group will also relocate its own office from the Reinhart Industrial Park to the business park in the coming months. During a site tour of the business park on Sept. 5, companies with new buildings on site were tooling and installing components in preparation for move in. ɸ Page B17

PIPELINE NEWS October 2014 Éş Page B16 Reinhart Business Park is a full service, paved subdivision with water, sewer and electricity installed with fiber optics as an available communication option. The bulk of construction was done in-house by Reinhart Developments Inc. “We have experienced survey people and heavy equipment operations. We are using GPS equipment that is saving time and getting a better quality product,â€? said Reinhart. Future expansion will take place on a parcel of land on the north side of the CN Rail tracks as the demand for industrial and ratchets up. “There is a huge demand in the Lloydminster area. The heavy oil is some of the greatest in North America and there is a demand for it,â€? said Reinhart. “Husky is the big player here, and they are ramping up like we’ve never seen to really make things happen. “I think the demand is there. We always wondered when it’s going to end. We’ve been talking about that since the early 80s and it doesn’t seem to end. “The demand seems to grow exponentially. We get calls, it seems, daily for new projects and buildings. We probably have some 20 projects on the go as we speak.â€? Some of those projects have come from business connections made while accompanying his wife Janelle on her singing tours throughout the world. Janelle is a renowned top 40 Catholic Christian music singer who has sung for the late Pope John Paul II and Queen Elizabeth when they visited Canada. “Touring has been a great opportunity. It’s amazing the amount of people you meet, and that

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:Ä‚Ć?ŽŜ ZÄžĹ?ĹśĹšÄ‚ĆŒĆš Ć?ĆšĆŒƾžĆ? Ä‚ ĆšƾŜÄž ŽŜ ĹšĹ?Ć? Ĺ?ĆľĹ?ĆšÄ‚ĆŒ Ä‚Ćš ĹšĹ?Ć? Žĸ Ä?Ğ͘ ,Äž Ć?ĂLJĆ? ĆšŽƾĆŒĹ?ĹśĹ? Ç Ĺ?ƚŚ ĹšĹ?Ć? Ç Ĺ?ĨÄž :ĂŜĞůůĞ͕ Ä‚ ĆŒÄžĹśĹ˝Ç ĹśÄžÄš ĂƚŚŽůĹ?Ä? ĹšĆŒĹ?Ć?Ć&#x; Ä‚Ĺś žƾĆ?Ĺ?Ä? Ć?Ĺ?ĹśĹ?ÄžĆŒ Ç Ĺ?ƚŚ ĹšĹ?Ć? Ĺ?ĆľĹ?ĆšÄ‚ĆŒ Ĺ?Ĺś ĆšĹ˝Ç ĹšÄ‚Ć? ŚĞůƉĞĚ ĹšĹ?Ĺľ ƚŽ ůĂŜĚ Ä‚ ĨÄžÇ ĹŻÄ‚ĹśÄš ĚĞǀĞůŽƉžĞŜƚ ĚĞĂůĆ? Ĺ?Ĺś tÄžĆ?ĆšÄžĆŒĹś Ä‚ĹśÄ‚ÄšÄ‚Í˜ tŚŽ ĹŹĹśĹ˝Ç Ć?Í• Ć?ŽžÄž žƾĆ?Ĺ?Ä? Ĺ˝ĆŒ ĞǀĞŜ ÄšĆŒÄ‚Ĺ? ĆŒÄ‚Ä?Ĺ?ĹśĹ? Ä?ŽƾůÄš Ä?Äž Ĺ?ĹśÄ?ůƾĚĞĚ Ä‚Ćš Ä‚Ĺś ŽƉĞŜ ĹšŽƾĆ?Äž ŽĨ ƚŚĞ ĹśÄžÇ ZÄžĹ?ĹśĹšÄ‚ĆŒĆš ĆľĆ?Ĺ?ŜĞĆ?Ć? WÄ‚ĆŒĹŹ ŜĞdžƚ Ć?Ć‰ĆŒĹ?ĹśĹ?͘ dĹšÄžĆŒÄž Ä‚ĆŒÄž Ä‚ ůŽƚ ŽĨ Ĺ?ĚĞĂĆ? Ä?ÄžĹ?ĹśĹ? ƚŽĆ?Ć?ĞĚ Ä‚Ä?ŽƾĆšÍ˜

does turn into land and building deals,� said Reinhart. “There’s a huge network that turned into quite a few land deals up in the Fort McMurray area just from touring.� Reinhart Developments has a growing industrial and commercial park at Anzac serving the oil

and gas industry in Fort McMurray. Who knows? Janelle could even perform at a planned grand opening next spring with lots of creative ideas from Reinhart on the table. “We’re throwing around a whole bunch of ideas like having drag races on the new pavement. We’ll see happens on that topic,� he said.

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PIPELINE NEWS October 2014

PIPELINE NEWS October 2014 ĆŒÄ‚ĹśÄšĆš dĆŒÄ‚Ä?ĆšĹ˝ĆŒ >ĆšÄšÍ˜ Ć?Ä‚ĹŻÄžĆ? rep Sam Sklar from the Lloydminster dealership ÄžŜŊŽÇ‡ÄžÄš ĚĞžŽŜĆ?ĆšĆŒÄ‚Ć&#x; ĹśĹ? the controls of this John ÄžÄžĆŒÄž ĎŽĎ­ĎŹ' ĞdžÄ?Ä‚Ç€Ä‚ĆšĹ˝ĆŒÍ˜

B19

Under the sun at the Lloyd oil show „ Story and photos by Geoff Lee Lloydminster – The 2014 Lloydminster Heavy Oil Show held Sept. 10-11 attracted approximately 6,200 visitors and a record 260 exhibitors with a must-see variety of indoor and outdoor industry displays on hand at the Lloydminster Exhibition Grounds. Perfect weather on the final day of the show brought droves of peoples to view the outdoor equipment on display, putting those exhibitors in a happy mood. Nobody went home hungry with barbecue and refreshment booths galore.

Call this a double take as two guys with cellphones snapped simultaneous photos of ƚŚĞ KƉĆ&#x; žƾĆ? WĆŒĹ?žĞ žŽÇ€Ĺ?Äž ĆšĆŒĆľÄ?ĹŹ Ä‚Ćš ƚŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ &Ĺ?ĆŒĆ?Ćš dĆŒĆľÄ?ĹŹ ÄžĹśĆšĆŒÄž ŽƾƚĚŽŽĆŒ ÄšĹ?Ć?Ć‰ĹŻÄ‚Ç‡Í˜

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PIPELINE NEWS October 2014

Optimize with a Zedi

ĞĚĹ?Í›Ć? Ä?ůŽƾÄšͲÄ?Ä‚Ć?ĞĚ ĂƉƉůĹ?Ä?Ä‚Ć&#x;ŽŜĆ? ĚĞůĹ?Ç€ÄžĆŒ Ć‰ĆŒĹ˝ÄšĆľÄ?ÄžĆŒĆ? ƚŚĞ Ĺ?ŜĨŽĆŒĹľÄ‚Ć&#x;ŽŜ ƚŚĞLJ ŜĞĞĚ͕ Ç ĹšÄžĹś ƚŚĞLJ ŜĞĞĚ Ĺ?ĆšÍ˜ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ

Edmonton – Zedi Inc. thrives on helping oil and gas producers to optimize their production operations through technology solutions supported by consultation and services. Their business model of outsourcing automation, data management and field and professional services to energy clients has boosted revenue from $29 million in 2007 to over $115 million

today.� Internal organic growth of the Calgarybased company is aided by the adoption of Salesforce’s customer relations management software used by staff to boost sales and connect with clients. Zedi has been using Sales Cloud software for business development since 2006 and recently purchased Service Cloud to help sales staff enhance cus-

tomer experiences. “Wireless technology is a key enabler both to our market facing offers as well as to enterprise enablement for our staff,� said James Freeman, chief technology officer for Zedi. “We are a service company enabled by technology and we target the production operations aspects of the upstream oil and gas market.�

Zedi provides bundled solutions for producer challenges such as lack of a skilled workforce, lost time due to safety risks, not having enough pumping equipment and not meeting production targets. On labour shortages Freeman said, “On a global perspective and in Western Canada we are facing a labour shortage and a pending retirement crunch.

“Producers face the challenge of managing their operations with fewer experienced staff. That screams out for automation and a technology solution.� Zedi’s performance bundles involve a package of automated technology controls, data solutions and service expertise to production operation clients in the oil and gas industry to cut staffing needs. “Another problem that a producer needs to solve is keeping the lights on in the factory so to speak,� said Freeman. “One of the key metrics you use to measure the health of a producer is downtime. “Having an automated field, you can get a lot of information about what’s happening in real time in your operation. If production has gone down you can more rapidly respond to that and get production back up. “Reducing downtime equals getting cash flow going.� He said safety is another value proposition for automation and technology solu-

tions provided by Zedi. Zedi basically outsources technologybased solutions to companies willing to pay for their services so they can focus on their own core competencies. Simply put, most companies don’t have the resources to procure and license the technology that Zedi can provide and support. “We’ll give you more of a managed service that is a payas-you-grow style kind of investment,â€? said Freeman. “We turn big capital and some residual operating into a variable cost operating style of investment for producers.â€? Zedi’s proprietary cloud-based software enables paying customers to access their own well related data in real time by logging onto a Zedi access website with a browser and password. In this new era of customer intimacy, Zedi is relying on Service Cloud software from Salesforce to engage their customers on a much closer level. ɸ Page B21

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Zedi provides oil and gas producers with automated soĹŻĆľĆ&#x;ŽŜĆ? ƚŚĂƚ Ä‚ĹŻĹŻĹ˝Ç ĆšĹšÄžĹ?ĆŒ Ä?ĆľĆ?ĆšŽžÄžĆŒĆ? ƚŽ ĆŒÄžÄ‚Ä?Ćš ƚŽ Ć?Ĺ?ƚƾĂĆ&#x;ŽŜĆ? Ĺ?Ĺś ĆŒÄžÄ‚ĹŻ Ć&#x;ĹľÄžÍ˜ ĞĚĹ?Í›Ć? ^Ĺ?ĹŻÇ€ÄžĆŒĹŠÄ‚Ä?ĹŹ ĹšÇ‡ÄšĆŒÄ‚ƾůĹ?Ä? ĆŒĹ˝Äš ƉƾžĆ‰Ć? Ä‚ĆŒÄž Ć?ĹšĹ˝Ç Ĺś Ĺ?Ĺś ĆšÄ‚ĹśÄšÄžĹľÍ˜ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ

Éş Page B20 “We are new into the relationship on Service Cloud, but it supports the strategy around customer intimacy. We’ve got lots of operational history around Sales Cloud,â€? said Freeman. Salesforce1 and Market Cloud are two other offerings from Salesforce that Zedi could look at next as customer relations management tools. “We are a service provider enabled by technology. One of our key competitive strategies is to make sure that service sets us apart from our competitors,â€? said Freeman. “That underscores the importance of the Service Cloud solution from Salesforce as really the key way to deliver that differentiation in the market.â€? “We think Salesforce is the right tool set. We think we can build a competitive and a sustainable differentiation based on that.â€? Salesforce is a $37 billion U.S. based company that sells cloud or Internet-based customer man-

agement software on a software-as-a-service model. The company was named the most innovative company in the world by Forbes in August for the fourth year in a row. Freeman tips his tap to Sales Cloud and its funnel management functions for business development growth and expects Service Cloud will build on that achievement. “Sales Cloud is available on tablets and in a more mobile way for our business development team,� said Freeman. “Salesforce definitely has a claim to being one of the best in class experiences for providing customer relations management.� Freeman also attributes revenue growth to what he calls Zedi’s DNA business model with D for devices, N for network and A for applications. “We have devices that go out in the field and collect data. “We have a network that ties back to applications in the chain. Network is machine-to-machine

D&D OILFIELD RENTALS

and the A is for cloud based applications that collect the data and serve it up in meaningful ways to our customers,� explained Freeman. “We surround all that with a variety of people based services – some targeting the head office which is targeting the field operations.� Zedi has a total staff of 480 employees with offices in Calgary and Edmonton and access to another 150 contractors in their field services division. Zedi’s growth in Canada and expansion in the U.S. is also being fueled by acquisitions including technology acquisitions that expand their product offerings. “That’s been a major growth engine as well,� said Freeman who is bullish of the outlook for the company that has over 60 years of continuous operations in North America. “Our legacy and our history has been primarily gas in Western Canada. We’re a company that continues to service and grow the Canadian market.� “Through additions to our product lines and through geographic diversification and through market diversification by looking at more liquids than oil – those are the leaders we are pulling right now to grow and to go forward.� The U.S. and Latin America will also be a key focus for growth for Zedi as well as investments in oil and gas. The greater use of Service Cloud will help Zedi to invest in customer intimacy to attract new clients and retain existing ones. “Customer intimacy is part of the answer to the question where do we see you sales going from here?� said Freeman. “That’s very much a key philosophy and strategy that we’re investing in.�

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B22

PIPELINE NEWS October 2014

Oil show warms to Suretuf’s pitch Lloydminster – It was a warm and sunny final day at the 2014 Lloydminster Heavy Oil Show on Sept. 11, prompting a wave of visitors to chat with outdoor exhibitors including Suretuf Containments Ltd. Several people with young children in tow asked business development manager Greg Gessner if the lined Suretuf containment systems on display could be used for backyard pools. “You shouldn’t. You might be a little hard on them – you probably could for a short term,� he said with a laugh at the idea. Fortunately for Gessner, most of the questions he fielded were business related such what kind of containments systems they make for the oil and gas industry. “We produce galvanized secondary containment walls to protect the environment against potential leaks from tanks, chemical barrels – any kind of container that holds a potentially hazardous chemical or hazardous substance to the environment,� he told Pipeline News. “We have three different heights – 25, 36 and 44-inches to accommodate any lease size and different size well sites.� The containment systems are lined with a geo textile membrane to contain any leaked fluids or substanc-

es until they can be cleaned up. That’s what inspired the pool idea in some people’s minds, but Gessner was loving all of the traffic and banter at his booth thanks to an overnight turn in the weather. “The oil show has been good. We could have used a little more sunshine and warm weather, but day two here, the sun is out. It’s pretty much twice as hot as it was yesterday,� he said. “There’s a lot more people outside today and there’s a lot of activity so it’s going very well.� Gessner is proud to tell everyone he meets that Suretuf is locallyowned by his brother Clayton and has its own manufacturing facilities that it operates in Alberta. The shop is located on Range Road 13 about 12 kilometres south of Highway 16 West in Lloydminster. “We’ve been in business now for about 17 years. Right now, we have about 15 employees,� said Gessner. “We are not a dealer or a distributor of our products. We own the patents and we bring in all the raw materials and do all the manufacturing right here. “We have robotic welders, brake presses, plasma tables which allows us to be very efficient and meet our volumes with that amount of staff.�

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One of the main selling points of Suretuf containment systems is a patented drop pin Ä?ŽŜŜÄžÄ?Ć&#x; ŽŜ Ä?ÄžĆšÇ ÄžÄžĹś Ç Ä‚ĹŻĹŻ ƉĂŜĞůĆ? ĂŜĚ Ć?ĹŻĹ?ĚĞ Ĺ?Ĺś ĹŻÄžĹ?Ć? ÍžĆŒÄžÄšÍż ĨŽĆŒ Ć‹ĆľĹ?Ä?ĹŹ Ĺ?ĹśĆ?ƚĂůůĂĆ&#x; ŽŜ Ç Ĺ?ƚŚ ŜŽ Ć?ƉĞÄ?Ĺ?Ä‚ĹŻ ĆšŽŽůĆ? ĆŒÄžĆ‹ĆľĹ?ĆŒÄžÄšÍ˜ 'ĆŒÄžĹ? 'ÄžĆ?Ć?ĹśÄžĆŒÍ• ƚŚĞ Ä?ĆľĆ?Ĺ?ŜĞĆ?Ć? ĚĞǀĞůŽƉžĞŜƚ žĂŜĂĹ?ÄžĆŒ ĆŒÄžĆ?ĆšĆ? ĹšĹ?Ć? Ä‚ĆŒĹľ ŽŜ ƚŚĞ ĆŒĹ?ÄšĹ?Äž Ä?ĂƉ ƚŚĂƚ Ć?ÄžÄ?ĆľĆŒÄžĆ? ƚŚĞ Ĺ?ĞŽ žĞžÄ?ĆŒÄ‚ĹśÄž ƚŽ ƚŚĞ Ç Ä‚ĹŻĹŻ ƉĂŜĞůĆ?͘ ĞŚĹ?ŜĚ ĹšĹ?Ĺľ Ä‚ĆŒÄž Ä?ĆŒĹ˝Ć?Ć?Ĺ˝Ç€ÄžĆŒ Ć?ƚĞƉĆ? ƚŚĂƚ Ä?ŽžÄž Ç Ĺ?ƚŚ ƚŚĞ Ć?LJĆ?ĆšÄžĹľÍ˜

Gessner described the Lloydminster area as being “very strong for us as well as through our dealers and distributors into northern Alberta, parts of southern Alberta and especially southeastern Saskatchewan and southwestern Manitoba.� Gessner said what sets Suretuf apart from the competition is their patented drop pin connection on their panels and their slide in legs for quick setup without any nuts or bolts. The slide-in leg design allows the entire containment system to float with ground heaving while maintaining the integrity of the walls. “It also makes it real easy for people to extend or add onto our containment packages, real easy to take down on test wells, or if companies put up test tanks for three to six months and then they want to flow line,� said Gessner. “Our systems come down real easy; they move easily; they are modified easily – it saves a lot of labour in the field.� A completed system comes with crossover stairs and a de-sanding or stinger door. Suretuf even has a patent pending on a new access door that eliminates the need for crossover steps and or

sting doors for improved safety for fluid haulers and operators. The company will also install and set up containment systems or just supply them if clients have a preferred construction crew that does most of their work. The containment systems are also recyclable when the well stops producing. “They usually go back to the bone yard and they wait for the next job or the next well site,� said Gessner about the product. “Being galvanized, they have the longevity against Mother Nature and they can be used for years and years.� Gessner says business is driven by well drilling activity that they keep close tabs on for potential sales growth areas. “We watch for it and see how many rigs are in which areas, how active they are – wet conditions and things like that,� he said. Suretuf also partners with some of their dealers and distributors in different parts of Western Canada that are tank manufactures or vault manufactures for tanks to generate sales. “We also partner up with oilfield supply companies in certain areas and it works very well,� said Gessner.

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PIPELINE NEWS October 2014

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Tier 1 Energy branching to Lloyd

Rob Sutherland is senior vice president of sales and marĹŹÄžĆ&#x; ĹśĹ? ĨŽĆŒ dĹ?ÄžĆŒ Ď­ ĹśÄžĆŒĹ?LJ ^ŽůƾĆ&#x; ŽŜĆ?Í• Ä‚Ĺś ÄšžŽŜĆšŽŜ Ä?Ä‚Ć?ĞĚ Ä?ŽžĆ‰ĹŻÄžĆ&#x; ŽŜĆ? ĂŜĚ Ä?Ä‚Ć?ĞĚ ĹšŽůÄž Ç Ĺ?ĆŒÄžĹŻĹ?ŜĞ Ä?ŽžĆ‰Ä‚ĹśÇ‡Í˜ ,Äž Ä?ĂžĞ ƚŽ ƚŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ,ĞĂǀLJ KĹ?ĹŻ ^ĹšĹ˝Ç ĆšĹ˝ ůĞƚ ÄžÇ€ÄžĆŒÇ‡ŽŜÄž ĹŹĹśĹ˝Ç ĆšĹšÄžÇ‡ Ä‚ĆŒÄž ŽƉĞŜĹ?ĹśĹ? Ä‚ Ä?ĆŒÄ‚ĹśÄ?Ĺš Ĺ?Ĺś >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ƚŚĹ?Ć? ĨÄ‚ĹŻĹŻ ƚŽ Ć?ÄžĆŒÇ€Äž ƚŚĞ ŚĞĂǀLJ Ĺ˝Ĺ?ĹŻ ĹľÄ‚ĆŒĹŹÄžĆšÍ˜ WŚŽƚŽ Ä?LJ 'ÄžŽč >ĞĞ

Lloydminster – The 2014 Lloydminster Heavy Oil Show was an opportunity not to be missed for Tier

1 Energy Solutions, an Edmonton-based cased hole wireline and completions services company set to open a

branch in Lloydminster. “Tier 1 is a new company. We started up Nov. 15, 2013 so we’d like to get our name out,� said Rob Sutherland, senior vice president of sales at the company booth inside the Lloydminster Exhibition Grounds. “We want to reach out to customers here and we think this a good opportunity to get a broad base of the market in Lloydminster. “That’s what we are trying to accomplish – let everyone know that we are here and show them what services we have.� Tier 1 Energy is a privately-owned solutions-focused company providing cased hole perforating and logging and completions services such as completion liner hangers, through tubing and conventional completions. From “cradle-tograve� is how Sutherland describes their array of services on the completions side of their business that includes casing inspections and cement evaluations. Tier 1 Energy has its sales office in Cal-

gary with field offices in Grande Prairie, Leduc and Red Deer with Lloydminster next in line for market expansion. “We are just lining up our office in Lloydminster. We should be here in early Q4 in 2014,� said Sutherland. “We feel there is a need for a logging market in Lloydminster and that’s one of our specialties, and the conventional completions market is a core specialty of ours as well. “That’s why we are moving into Lloydminster.� Tier 1 Energy will hit the ground running in Lloydminster with its new thermal liner hanger for steam assisted gravity drainage (SAGD) applications in

the region. “We are actually putting it in wells at the middle of this month,� said Sutherland on Sept. 11, the final day of the two-day oil show. “Our casing inspection tools, cement evaluation tools – those are all designed for the heavy oil market here in the Lloydminster area.� Sutherland is buoyed by the news that Husky Energy plans to double its thermal production to over 80,000 barrels a day by 2020. “Husky is a huge player in Lloydminster and I think, one of our targets. It’s exciting to know that the heavy oil area is a growth market for a number of customers. So that’s exciting for us,� he said. Asked what sets

Tier 1 Energy apart from the competition, Sutherland said, “I think the first thing is, we bring technology and we bring solutions to the market, so we have a vast array of experience within our company. “We have people with 30 plus years of experience in the oil and gas industry, and we think we can use our technology to bring solutions to our customers. So we think that sets us apart.� Tier 1 Energy is headed Kevin O’Dwyer who previously worked for Schlumberger as their Canada division manager for E&P Wireline Services. The company held its official grand opening on June 25.

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PIPELINE NEWS October 2014

$OEHUWD FDUERQ WUXQN V\QFHG ZLWK UHĂ€ QHU\ This picture shows some of the Alberta Carbon Trunk Line pipe in a storage yard near Balzac, Alberta: the tranĆ?Ĺ?Ć&#x; ŽŜ ƉĹ?ÄžÄ?ÄžĆ? Ä?ÄžĆšÇ ÄžÄžĹś ǀĂůǀĞĆ? ĂŜĚ ƚŚĞ žĂĹ?ŜůĹ?ĹśÄžÍ˜ dŚĞ ĎŽĎ°ĎŹ kilometre ACTL pipeline will be built by Enhance Energy ĨŽĆŒ ƚŚĞ Ć‰ĆľĆŒĆ‰Ĺ˝Ć?Äž ŽĨ ĆšĆŒÄ‚ĹśĆ?Ć‰Ĺ˝ĆŒĆ&#x; ĹśĹ? Ä?Ä‚Ć‰ĆšĆľĆŒÄžÄš KĎŽ from the EĹ˝ĆŒĆšĹš tÄžĆ?Ćš ZÄžÄšÇ Ä‚ĆšÄžĆŒ WÄ‚ĆŒĆšĹśÄžĆŒĆ?ĹšĹ?Ɖ ĨÄ‚Ä?Ĺ?ĹŻĹ?Ć&#x; ÄžĆ? ĂŜĚ Ĺ?ĆŒĹ?ƾžÍ›Ć? ĨÄžĆŒĆ&#x; ĹŻĹ?ÇŒÄžĆŒ ƉůĂŜƚ ĨŽĆŒ Ĺ?ŜŊÄžÄ?Ć&#x; ŽŜ Ĺ?ŜƚŽ ĆŒÄžĆ?ÄžĆŒÇ€Ĺ˝Ĺ?ĆŒĆ? ĹśÄžÄ‚ĆŒ ĹŻĹ?ǀĞ ůͲ Ä?ÄžĆŒĆšÄ‚ ĨŽĆŒ ĞŜŚĂŜÄ?ĞĚ Ĺ˝Ĺ?ĹŻ ĆŒÄžÄ?Ĺ˝Ç€ÄžĆŒÇ‡Í˜ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ĆŠ ĞĚ

Edmonton – The North West Redwater Partnership is ramping up construction at the Sturgeon Refinery near Redwater Alberta that will sell its carbon dioxide to Enhance Energy Inc. for enhanced oil recovery. Infrastructure work at the world’s first bitumen refinery is in full swing towards a commercial operation startup in September 2017. NWR reported more than 650 workers were at the site in mid-July for infrastructure work. Contracts are in place for the engineering, procurement and construction of all major process units. Foundation work will continue throughout

the second half of 2014 in preparation for module arrival at site commencing late 2014 and early 2015. NWR is a partnership between North West

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Upgrading Inc. and Canadian Natural Upgrading Ltd. a wholly-owned subsidiary of Canadian Natural Resources building the refinery. The refinery will combine proven processes of gasification technology with an integrated carbon capture and storage (CCS) system. The refinery will convert 50,000 barrels of bitumen directly to fuels and other high value, low sulphur products. The estimated cost of the refinery has jumped from $5.7 billion in November 2012 when the first phase was sanctioned to $8.5 billion in December 2013, the latest estimate. NWR cites the higher estimate to “a combination of cost inflation and the inability to fully capture certain cost savings initiatives.â€? The refinery is a key component of the Alberta Carbon Trunk Line (ACTL) project being built in sync with the Sturgeon Refinery. The ACTL is touted as being the world’s largest CCS project. ACTL encompasses the purification of CO2 by the NWR partnership and the capture of CO2 at both the Redwater Agrium fertilizer plant and NWR sites, and the transportation and storage of CO2 by Enhance. The ACTL project consists of a 240-kilometre pipeline, employing a proven technology to gather, compress and store up to 14.6 million tonnes of CO2 per year at full capacity. Over time, lateral legs extending south, west and east will allow for multiple entry points that will gather CO2 from the entire central Alberta catchment area. The CCS project is the equivalent to removing 2.6 million cars off the road annually, or about a third of all registered vehicles in the province. ɸ Page B25

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PIPELINE NEWS October 2014 Éş Page B24 The total capital and operating costs of the ACTL project over a 10 year period are estimated to be $1.2 billion. Alberta is providing $495 million in project funding with $63 million from the federal government. Injecting stored CO2 into reservoirs could recover up to one billion barrels of oil and generate more than $15 billion in royalties for Alberta over the life of the project. Enhance has already targeted the Clive field for its fist planned injection of stored CO2 that could recover of up to 15 per cent of the original oil in place. Enhance purchased the Clive assets from Santonia Energy last September, a deal that company president Susan Cole called a milestone in her summer newsletter. “As we continue to work on the Clive field, we are planning to be out talking to all landowners in the area soon and I look forward to seeing some of you at our upcoming open house which we are in the midst of planning,â€? said Cole. News that NWR is aiming for a commercial startup in September 2017 has sent Enhance’s plans to build its pipeline and storage facilities into overdrive. “As construction ramps up at that site, we continue to plan our next steps to align with their timing,â€? said Cole. “We still plan to be up and running in advance of the Sturgeon Refinery, however; we can now finalize our plans and work on our construction details. “In the coming months, we will be continuing work on engineering details, bidding out and finalizing construction contracts and procuring equipment.â€? Enhance received the aerial coolers for the CO2

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capture facility adjacent to the Agrium fertilizer complex in May. Corey Kusch, surface land manager at Enhance reports they are in the process of receiving more ordered materials and equipment including 12-inch pipe for the northern segment of the project. The northern section is also the location of the longest planned horizontal directional drill. Kusch notes the pipeline route with attempt to

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follow section boundary lines to minimize impacts on landowners. “With this design, Enhance acknowledges that many fence lines will be upgraded, and in some cases re-aligned to meet the legal survey requirements,� said Kusch. “As the project moves closer to construction, all affected parties will be contacted by an Enhance field representative to have these discussions.�

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PIPELINE NEWS October 2014

Baker Hughes opens Lloyd super centre By Geoff Lee Lloydminster – Baker Hughes has become a one roof business in Lloydminster for its pressure pumping and upstream chemical operations at its new enterprise facility in the Hill Industrial Park. The company held a grand opening on Sept. 18 to celebrate what it calls its new super centre that will also house artificial lift operations in the coming weeks. “One of our strategies as a service company is to get as many of our services under one roof as possible so we get more collaboration and more networking amongst our people,” said Tom Whalen, president of Baker Hughes Canada. “That way we can, in turn, provide that level of collaboration with our customers and be able to offer them more value. “It’s about engaging and sharing information more than anything.” The super centre sits on a 13.3 acre site with a total building footprint of about 33,000 sq. ft. including an attached main office and vehicle maintenance complex. The shop area for maintaining vehicles features four bays and an enclosed manual wash bay that uses recycled water. The site also includes outdoor space for parking truck, a warehouse for bulk chemicals and cement, a chemical plant, a cement plant and a plug shed with plenty of room for future expansion. “We have other services that will be eventually at this site as well,” said Whalen. “Artificial lift is based in Lloydminster as well, so that product line will eventually end up over here.” Whalen said his plans to create a Lloydminster

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super centre were hatched in e2010. That’s when the U.S. based corporation acquired and merged with BJ Services, a pressure pumping business and Tanroc, a privately held artificial lift company in Lloydminster. “We acquired Tanroc just prior the BJ acquisition, so I saw it as a great opportunity to leverage what we’d just done and started making plans to take an enterprise approach and get everyone under one roof and upgrade our facilities,” explained Whalen.

“Some of our facilities we leased and other ones we owned and had owned for a long time. Quite frankly, they were just getting a bit tired.” Whalen said wherever possible, Baker Hughes is putting its regional operations under one roof as an overarching strategy. “It’s more about how we become more efficient. If you start looking at enterprise functions – there are a lot of back office functions that aren’t specific to any one product line,” he said. ɸ Page B27

PIPELINE NEWS October 2014 Éş Page B26 “Any time you can get those co-located it drives efficiency which in turn, allows us to be more cost effective in everything we do with our clients. “It’s about cost containment and minimizing how much we have to pass on to our customers.â€? Efficiency under one roof was also theme of Whalen’s keynote talk to employees, customers, and the general public during the grand opening with greetings from Lloydminster Mayor Rob Saunders. The event included a barbecue, tours and a ribbon cutting with plenty of opportunity to ask company officials such as Rod Stearn, vice president of pressure pumping ,Canada about growth in Lloydminster. “It’s fantastic. We have a long history in Lloydminster. Our cementing business and our chemical business have been here for years,â€? said Stearn. “Lloydminster is a significant market for

lift when it comes to the artificial lift business in Canada. It’s a big part of what we do and it’s a cornerstone of our business in Canada.� Baker Hughes manned a large indoor exhibit at the recent 2014 Lloydminster Heavy Oil Show with business cards at the ready for customers to contact Craig Hedstrom, the district manager for pressure pumping in Lloydminster. Hedstrom manages 40 pressure pumping employees from the super centre that he spoke to the media about during the grand opening. “It’s a fantastic new facility. It should meet all of our customers’ needs under one roof,� he said. “We run seven pumping units and seven bulk delivery units out of this space.� Hedstrom has more than 20 year of experience with Baker Hughes that brought him and his family from Drumheller in May when the Lloydminster super centre opened for business.

Mike Miske is the central east district manager for upstream chemicals who spoke about the benefits of the new facility for staff and customers. “It’s a beautiful facility that makes it easy for our customers to come and do meetings and presentations,� he said. “We have more capability to serve our customers. It’s a better working environment for the staff and all in all, it’s great to see in the community.� The super centre includes space for bulk storage of liquid chemicals and a chemical plant on site as a cost effective service for customers in need of ready to go production chemicals. “We deal with anything from demulsifiers to defoamers to scavengers to any kind of production chemicals required by customers,� said Miske who has a bullish outlook on growth from the new super centre. “I think we can provide the future needs for

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customers. As they’re growing, we want to grow with them,� he said. “We want to be able to minimize our costs and try to show customers we can create value for them.� (Editor’s note: Construction of a similar super centre was under way near Estevan until this past spring, when work was abruptly halted. The property is now listed for sale.)

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PIPELINE NEWS October 2014

VF Imagewear garbs oil industry Lloydminster – It was apples or oranges for those who came to the VF Imagewear Canada Inc. booth at the 2014 Lloydminster Heavy Oil Show to check out the protective work garments on display. The Edmonton manufacturer kept it simple with a display of its two leading vocational brands pitched by Jack Murch, territory sales manager. “Basically we sell two types of products. One is the flame resistant clothing for the oil and gas and electrical industry. That’s our Bulwark FR brand. The other is the Red Kap industrial line,� said Murch. Both brands are made in Edmonton by VF Imagewear that is part of VP Corporation touted as the world’s largest apparel company based in Tennessee Edmonton is the Canadian head office for VF Imagewear that also has a distribution centre in Ontario. The Bulwark FR and Red Kap apparel by VF Imagewear add to a well-known group of VF Corporation brands including Lee, Wrangler, The North Face, Nautica, JanSport — and many others. “So the Bulwark brand gives us a real surety of service with the company that we work with,� said Murch. “The fabric is all milled in the United States and the clothing is cut and sewn in our facilities in Mexico.� Some of the Bulwark clothing is made with flame resistant Nomex fibre by DuPont, but as Murch explained, “There’s various fabrics in the industry depending on the different function of what the folks in the field need.� The Red Kap line for general industrial usage such as working in an automotive shop is not flame

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resistant. Optional Red Kap high visibility clothing with reflective piping is ideal for many occupations such as road construction, utility, police, emergency medical services. The oil show held at the Lloydminster Exhibition Ground Sept. 10-11 gave VF Imagewear the opportunity to “meet new folks and try and try get some folks into safety gear� as Murch put it. When it comes to choosing work apparel, Murch says protection comes first, but you don’t

have to sacrifice comfort and style either with the leading Bulwark FR brand worn in the oil and gas industry. “I think the first and foremost thing is that they protect you from a specific hazard and that’s what we have to be concerned with more,� he explained. “They are a comfortable piece of clothing and dependent on what you are trying to achieve for the function of work, we can get you into different brands and styles of clothing.�

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Crimtech sells itself at Lloyd oil show Lloydminster – It was mission accomplished for Crimtech Services Ltd. based in Red Deer that sought awareness from their booth at the 2014 Lloydminster Heavy Oil Show. Michael Faubert, the company’s Calgary sales rep shook dozens of hands while briefing everyone he met on who Crimtech is and what services they provide to the oil and gas industry. “We are fabricators of production equipment so skidded packages, modular assemblies. We do a lot of structural work – pipe spooling and vessel work,� said Faubert in a nutshell company profile. Over the past 21 years, Crimtech has evolved into a multi-disciplinary provider of engineering, drafting, and production equipment for the oil, gas, pipeline and petrochemical industries. “We used to do a lot of wellsite work, but around 2006 that’s when we sort of made the turn in the road and went more into oilsands’ SAGD and into the pipeline work,� said Faubert. “So we’re big with Enbridge and TransCanada pipelines.� Crimtech is a privately-owned family business that manufactures all of its products from its facilities in Red Deer for companies all over Western Canada. “We’ve done some stuff for Enbridge and shipped some package out to Quebec,� said Faubert who added they have sold some products overseas, but mainly through equipment procurement contracts. More and more of their products are fabricated for the heavy oil industry which brought them to the oil show to network. Their goal at the Lloydminster show held Sept. 10-11 was “just to get the presence out there of Crimtech to apprise people of who we are and what are fabrication capabilities are,� as Faubert put it. “We are here of course, because we deal heavily with Husky and a few other people.� Faubert handed out dozens of business cards in the quest for spreading awareness of Crimtech’s products and services from his post inside the Lloydminster Exhibition Grounds. Crimtech is quickly becoming well known for

its ability to build modules at its Red Deer facilities as it takes on major oil and gas fabrication projects. The company was chosen to build specialized modules for Shell Canada’s Quest carbon capture and storage (CCS) project near Edmonton. “We’ve done 13 packages for the Shell Quest project. I think we’ve still got three or four that are being completed now of the original 13 ordered,� said Faubert. The order for Shell includes the fabrication of four pigging skids, six line break valve (LBV) skids and three wellsite metering skid packages. Quest will capture and store up to 1.2 million tons of CO2 per year from the Shell Scotford Upgrader facilities Captured CO2 will be transported by pipeline to three injection wells located north of Scotford and stored permanently approximately two kilometres underground. The contract for Shell is part of a steady growth curve for Crimtech that added new electrical, paint and sandblasting facilities to its Red Deer footprint in November 2005. “Right now, we’re running at about 90-95 employees,� said Faubert noting hiring has hit a peak of between 140 to 160 in past projects.

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“We’ve got a lot of longevity. People have been around since day one.� Asked about the potential for new business from being at the Lloydminster oil show, Faubert said, “We’ve had an interesting turnout – there are two or three things that will come out this. “This is our first year at the show, so we are looking forward to being here again (in 2016) and next year in Bonnyville. The 2015 Bonnyville & District Oil Show takes place June 17-18 at the Bonnyville Centennial Centre.

Michael Faubert, a Calgary-based sales rep from Crimtech Services Ltd. in Red Deer was on a mission at the 2014 Lloydminster Heavy Oil. WŚŽƚŽ Ä?LJ 'ÄžŽč >ĞĞ

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reveals early days of :H\EXUQ À HOG „ By Brian Zinchuk Weyburn, Calgary – In August, 1983, Nadine Mackenzie interviewed longtime oil engineer and executive Don Redman (1918-2013) for the Petroleum Industry Oral History Project. Part of these extensive interviews, found at the Glenbow Museum webpage, www.glenbow.org/ collections/search/, touched on his experience with Central Del Rio and the discovery and initial years of operation of the Weyburn oilfield, which is now celebrating 60 years of operation. This is the transcript from the portion of that interview touching on the Weyburn field: Nadine Mackenzie: This company was also involved in the Weyburn discovery, can you tell me about it? Don Redman: The Weyburn oilfield, in Saskatchewan, about 10 or 12 miles southeast of Weyburn was discovered by Central Del Rio in 1954, just shortly after the finishing of the Toad River operation in British Columbia. This also was a very interesting operation for a company the size of Central Del Rio. Central Del Rio had obtained a very large drilling reservation from the Saskatchewan government, that extended from Weyburn down to the United

States border. This reservation was obtained by Neil McQueen, from information he had obtained as a geologist a good many years earlier when he worked for Imperial Oil in the general vicinity. The

Don Redman Photo courtesy Legacy.com

early Imperial wells had found some oil staining in their wells and on the basis of this information and some recent discoveries in North Dakota, this land was picked up. Being such a large reservation and the company being fairly small, so that they could not handle the required exploration expenditures, the land was farmed out to Mobil Oil, who drilled one well down in the Ratcliff area, adjacent to the United States border. That turned out to be an oil discovery in the then-called Ratcliff zone. The well was fairly deep and the oil was not of much volume. So that additional seismic work was required across the rest of the land, to see if there were any other drillable prospects. Also at this time Mobil Oil discovered

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the Pembina oilfield, which turned out to be a very major oilfield and required all of the expenditures and manpower of the Mobil Oil organization. Central Del Rio however, wished exploration continue in the Weyburn area and we were successful in making an arrangement with Mobil Oil where we split all of the acreage in half, in the reservation, on a quarter section basis. Mobil Oil controlled 100 per cent their quarters and Central Del Rio controlled 100 per cent their quarters. This allowed Central Del Rio to take over operations on their share of the land and commence drilling in Weyburn while Mobil Oil was so highly committed in the Pembina area. It turned out that three or four years later, Mobil Oil was able to obtain budgets for drilling in the Weyburn area, after Central Del Rio had discovered the Weyburn oilfield and came in and drilled their wells at that time. Central Del Rio again drilled a well in the Weyburn oilfield that turned out to be a small producer in a tight reservoir that made both oil and water, very similar to the discovery well drilled by California Standard in the Manitoba area. ɸ Page B31

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PIPELINE NEWS October 2014 Éş Page B30 Again, we drilled several of these wells, drilled them this time with rotary rigs, acidized and fracked the well, spent considerable time on trying to complete the wells with minimum water production and were unsuccessful. But (we) kept noticing that the wells appeared to be making more oil than you would expect from a tight, thin reservoir like we were getting in the wells. About the 2nd year of operations, when other companies had come into the area, the Saskatchewan Co-op drilled a well several miles to the south of the Central Leduc discovery wells. The well again, turned out to be downdip in a thick prolific reservoir and produced high volumes of water free oil, again, very similar to the California Standard, Virden operations. This field turned out to be a very large oilfield and eventually extended nearly 12 miles south of the discovery wells and extended nearly 20 miles to the east, to where it nearly touched or did join the Midale oilfield, which had been discovered several years earlier and was operated by Shell Oil. The field turned out to be so large that it became a very good candidate for secondary recovery by water flood. The field was unitized and the Weyburn water flood was put in and at that time, probably was the largest water flood in North America. Central Del Rio were very pleased that they were the successful oil company to be chosen as the operator of the

unit and of the water flood, competing against both Mobil Oil and Shell Oil for this operatorship. Mackenzie: And what did you do with this oil? Redman: The Weyburn oil turned out to be very similar to the Midale oil. It was medium gravity, high sulphur oil that, at that time, at the time of discovery, could not be marketed in Canada, except in small volumes because there were very few refineries that could handle oil with sulphur in it. Husky Oil could handle it a little bit down east in their refinery on the Great Lakes. We sold a little bit of the oil to the Co-op refinery in Regina, which they had to dilute with sweet oil in order to eliminate the sulphur, until finally they could not handle any more of it at all. The only other refinery that could handle it was the old Canadian Oils refinery down in Ontario, which was later bought out by Shell Oil. We finally, with the combination of the Midale oil and the Weyburn oil, the volumes built up great enough that we were able to get a pipeline into the area connecting with the Inter Provincial Pipeline in Cromer, Manitoba and then could ship this oil by pipeline, down into the Minneapolis-St. Paul area, to an American refinery that could handle this type of oil. At a later date, when it was realized that the volume of the WeyburnMidale type oil was becoming quite substantial, several other refineries in the Ontario area put in sulphur treating facilities and we were able to sell

B31

dŚĞ tĞLJÄ?ĆľĆŒĹś ÄŽ ĞůĚ͕ Ç ĹšĹ˝Ć?Äž ĹŻĹ?ĨÄž ŚĂĆ? Ä?ĞĞŜ ĞdžƚĞŜĚĞĚ Ć?ĆľÄ?Ć?ƚĂŜĆ&#x; ĂůůLJ Ä?LJ ƚŚĞ ĆľĆ?Ä‚Ĺ?Äž ŽĨ Ä‚ Ä?Ä‚ĆŒÄ?ŽŜ ÄšĹ?ŽdžĹ?ĚĞ ĹľĹ?Ć?Ä?Ĺ?Ä?ĹŻÄž Ň ŽŽÄšÍ• Ĺ?Žƚ Ĺ?ĆšĆ? Ć?ĆšÄ‚ĆŒĆš ϲϏ Ç‡ÄžÄ‚ĆŒĆ? Ä‚Ĺ?Ĺ˝Í˜ dĹšĹ?Ć? Ĺ?Ć? Ä‚Ĺś Ä‚ÄžĆŒĹ?Ä‚ĹŻ Ć?ŚŽƚ ŽĨ ƚŚĞ žĂĹ?Ĺś ƉůĂŜƚ͕ ŜŽĆŒĆšĹš ŽĨ 'ŽŽÄšÇ Ä‚ĆšÄžĆŒÍ˜ Photo courtesy Cenovus

all the oil we could produce. Which was the principle reason then, of installing the water flood and increasing the producing rate from the field. The field I believe, finally reached a rate of 13,000 barrels of oil a day, after the water flood went into effect. Central Del Rio was very involved with this operations of course, for a good many years afterwards. Wound up with a very large staff down in the Weyburn area. Mackenzie: Were there any other discoveries? Redman: Found a few other discoveries in the area but nothing of the significance of this oilfield, which became one of the major oil fields in Canada. One interesting point is that, with our larger staff in Weyburn, we

had a need for a fairly large office and were able to obtain the old sandstone railway station of the CPR Sioux (Soo) Line, in Weyburn, which was no longer used after the passenger trains stopped running on the Sioux Line track. We were able to convert this station into a very suitable, very good office. But it was a little disconcerting every time a freight train went by at high speed, because the office building shook and if they happened to be on a long distance call to the Calgary office, the roar of the freight train going by was so great that all discussions were suspended for the time it took for the train to get by. And some of those freight trains were pretty long trains. ɸ Page B32

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&HQWUDO 'HO 5LR RIĂ€ FH LQ :H\EXUQ UDWWOHG ZKHQ WKH WUDLQV URDUHG E\ Éş Page B31 Central Del Rio finally was merged with the oil company owned by Canadian Pacific Railway, which was called Canadian Pacific Oil and Gas Company. And the name of the company was changed to Pan Canadian, which now is one of the larger

exploration and producing companies, both in oil and natural gas. After approximately a year with PanCanadian, which was spent mostly with the merging of the field operating personnel of Canadian Pacific Oil and Gas and Central Del Rio Oils, I left the company to again, look for a small compa-

ny. And was successful in going to work for Sol Petro Ltd. in 1971. Mackenzie: What were the most exciting experiences in the oil patch for you? Redman: I think the most exciting experiences in the oil patch are when your company makes a major discovery of oil or gas, which of course, is the objective of the company and leads to the development of the company into a major producer of oil and gas.

I was involved in three major discoveries, California Standard discovered the Atchison oilfield, approximately 10 miles west of Edmonton, which was California Standard’s first major discovery after nearly 20 years of exploration in Alberta. I believe as we have mentioned, was the start of discoveries by California Standard all over Alberta and Manitoba. Another exciting time was when we realized that Central

Del Rio had discovered a major oilfield in southeast Saskatchewan, namely the Weyburn oilfield after several years of exploration and development of the field. The early wells in the Weyburn field, being on the northern extremity of the main oilfield in what we call the pinch out area were teaser type oil wells that seemed to perform better than they should for the amount of pay in the well, which indicated that there could be

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considerable oil in the area. But it took nearly two years before actually, a well was drilled down in the centre of the main oilfield by a competitor. At that time Central Del Rio realized that they owned land all through the major part of the oilfield. This is pretty exciting when you all of a sudden realize that you are a large owner of a very large oilfield. Sol Petro had a similar experience, when they found out that the Wapiti gas field, in the Grande Prairie area, turned out to be a multi-zone gas area, extending over thousands and thousands of sections of land. Again, the same situation applied. Sol Petro found out that they had a very large working interest in probably the largest gas field on the North American continent. All of these discoveries of major fields like this, which is the whole objective of drilling wildcat wells is a pretty exciting experience when you finally realize that you’ve made a major discovery.

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Hy-Lok expands to Lloyd Oct.1

DÄ‚ĆŠ ^Ç‡ĆŒĹśÇ‡ĹŹÍ• Ä‚ ƚĞÄ?ŚŜĹ?Ä?Ä‚ĹŻ Ć?Ä‚ĹŻÄžĆ? ĆŒÄžĆ‰ ĨŽĆŒ ,LJͲ>Žŏ Ĺ?Ć?ĆšĆŒĹ?Ä?ĆľĆ&#x; ŽŜ /ĹśÄ?͘ Ä?ŚĂƚĆ? Ç Ĺ?ƚŚ Ä‚ Ä?ĆľĆ?ĆšŽžÄžĆŒ ÄšĆľĆŒĹ?ĹśĹ? ƚŚĞ ĎŽĎŹĎ­Ď° >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ,ĞĂǀLJ KĹ?ĹŻ ^ĹšĹ˝Ç Í˜ dŚĞ ÄšžŽŜĆšŽŜͲÄ?Ä‚Ć?ĞĚ ĂŜĂĚĹ?Ä‚Ĺś ÄšĹ?Ć?ĆšĆŒĹ?Ä?ĆľĆšĹ˝ĆŒ ŽĨ ƉĹ?ƉĞĆ?Í• ǀĂůǀĞĆ? ĂŜĚ ÄŽ ĆŤ ĹśĹ?Ć? Ĺ?Ć? ŽƉĞŜĹ?ĹśĹ? Ä‚ Ä?ĆŒÄ‚ĹśÄ?Ĺš Žĸ Ä?Äž Ĺ?Ĺś >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ŽŜ KÄ?ĆšÍ˜Ď­Í˜ WŚŽƚŽ Ä?LJ 'ÄžŽč >ĞĞ

Lloydminster – Get ready to add Hy-Lok Distribution Inc. to the growing directory of oilfield supply companies conducting business in the heavy oil market of Lloydminster. The Edmonton-based Canadian distributor of tube fittings, pipe fittings, valves, tubing, gauges and instrumentation products for a variety of fluid control requirements expects to open a Lloydminster branch on Oct. 1. That was the news delivered by Matt Syrnyk, a

technical sales rep manning Hy-Lok’s booth at the 2014Lloydminster Heavy Oil Show held Sept. 10-11. The decision he said was a no-brainer given the scope of heavy oil operations in the region. “We are going to be opening up Oct. 1. Obviously, there’s a lot of oil and gas companies, so the business is here –it’s a very strong market,� said Syrnyk. Syrnyk said what makes Hy-Lok standout from the competition is

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pricing, availability and service. “Our products are manufactured in Korea,� he added and are in high demand by many industrial sectors including power generation, pulp and paper and semi conductor manufacturing. Hy-Lok’s head corporate office is based in Busan South Korea with international product distribution in many countries. Hy-Lok Canada also has locations in Calgary and Clairmont in Alberta,

and Fort St. John, British Columbia and Cambridge Ontario The company has become a fixture at Lloydminster heavy oil shows over the years showcasing a variety of valves and fittings used in the heavy oil industry including facilities. Syrnyk said this year’s show goal was “to generate a few more contacts, more business and obviously to get our product out there and let people know that we are out here.�

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For more information and to order online go to

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Experienced Foreman

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This is a full time position with responsibilities to manage the day to day operation of the municipality. Experience with the operation of grader, mower, tandem truck and backhoe is a necessity and must be willing to operate all this equipment as road repair and road building is required. Must be mechanically inclined. Applicant must be well organized, motivated and be able to delegate duties. This individual shall have a solid understanding of working within a budget, job costing, handle multiple tasks and understanding of oil and gas development. Applicants must hold a valid 3A driver’s license. Class 1A would be an asset. A driver’s abstract will be required. The R.M. offers competitive wages, group insurance beneďŹ ts and pension plan. Please submit written applications stating experience, expected salary and references to: R.M. of Enniskillen No. 3 Box 179, Oxbow, SK, S0C 2B0 "(' . - #% )& * *$+ % ' + The deadline for receiving applications will be October 14th, 2014 @ 4:00 P.M.; however this position will remain open until it is ďŹ lled. Only those candidates selected for the interview process will be contacted.

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Benefits offered Holiday pay Very competitive wages Local work Call Keenan at Prairiedog Oilfield Services (306) 421-2036

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Email resumes to: Estevanrigjobs@iroccorp.com Or call: 306.634.8235 www.eaglerigjobs.com

8327

STARTING @

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$25,995

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2014 DODGE GRAND CARAVANS

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STARTING @

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/ 0 7 1 BW

2014 RAM 2500 8057

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/ 7 7 1 BW

STARTING @

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B35

2014 DODGE JOURNEY 8195

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/ 1 3 1 BW

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PIPELINE NEWS October 2014

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Lloydminster AB | Provost AB | Drayton Valley AB | Medicine Hat AB | Kindersley SK

A Schlumberger Company

Pipeline News

SECTION C October 2014

Pipeline News was 2 sections this month. Stay tuned for next month focus:

Vac trucks, hydrovacs and Steamers

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