PIPELINE NEWS NORTH JUNE 2017 by Pipeline News North

Special Report: Pipeline Poker and the Trans Mountain Expansion /pg. 8 JUNE / JULY 2017

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JUNE 23, 2017

PIPELINE NEWS NORTH •

COMMUNITY

MATT PREPROST PHOTOS

Ashley Stenton and Danielle Brownlee till soil at the Abbeyfield Houses of Fort St. John on May 24.

Progress blooms with care Progress Energy is proving to be a perennial presence at the Abbeyfield Houses of Fort St. John. The company once again took part in the United Way’s Days of Caring at the senior’s home, planting fruit and vegetable seedlings, cleaning up the garden, manicuring the lawn, and hauling waste to the dump. It’s the fourth year the company has dropped in on Abbeyfield Houses, and its fifth year taking part in the Days of Caring campaign. “We love it here, first of all, and they really really appreciate it,” said field administrator Suzanne Armstrong. “They actually use the vegetables in their meals, so it’s nice to see that they’re benefiting from what we do, we’re not just coming out, throwing a bunch of plants in and then they just go to seed.” The company has been building on its work at Abbeyfield from year to year, having planted apple trees in the past, and accommodating any requests that come in. “We work with Ann, she tells us what they have, what they need, and what we can do to make it easier for them,” said Armstrong. “Because it’s a lot of work getting (the gardens) ready and I think

they can find the time to maintain it but they can’t necessarily find the time to get everything planted and organized. “We’re always looking for something to do because we have the manpower. People can give money but sometimes the money … isn’t what they need, they need the help. They’re just going to essentially use the money to hire people to do the jobs we can just do.” A Day of Caring is a United Way initiative that mobilizes local volunteers to complete meaningful,hands on projects to assist not‐for‐profit organizations in the community. “Thanks to Suzanne Armstrong and Julie Bourdon of Progress Energy who helped make this happen by organizing volunteers to help out on such a great day and getting so much done,” said Niki Hedges, community development co-ordinator for the United Way of Northern BC. “Combining social giving efforts and volunteering allows us to do so much more; to be more responsive, and to help benefit the community.” To learn how to get involved, contact the United Way at 250-263-9266.

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Brenda Kenny, former CEO of the Canadian Energy Pipeline Association, is one of the panellists on the federal government’s NEB Modernization Expert Panel.

Panel recommends breakup of NEB

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In its recent first-quarter financials, Enbridge Inc. revealed plans for a $1 billion expansion to its B.C. natural gas mainline, which runs from northeastern B.C. to Huntington-Sumas in Washington state. But is the plan in Canada’s best interests? And by how much would it increase Canada’s carbon emissions? Under a new two-part approval process recommended last week by a National Energy Board modernization panel, those would be among the first questions asked, even before such a project is referred for an environmental assessment. Only after a project got a conditional yes or no from the federal government would it enter a two-year environmental review. In other words, companies would no longer have to spend millions of dollars going through an environmental review process only to be refused at the end. They would get a conditional yes or no up front. The government would first decide if the proposed project met Canada’s national energy strategy. That would include addressing First Nations rights and title and climate change impacts. “Those studies have been done on major projects, but in today’s world they have been done at the very, very back end, as opposed to being done at the front end,” said Brenda Kenny, one of the NEB Modernization Expert Panel panellists. The panel, which was struck by Prime Minister Justin Trudeau’s government in response to concerns that the NEB had been overly politicized under the Stephen Harper regime, is recommending splitting the NEB into two separate entities. One would be a Canadian equivalent of the U.S. Energy Information Administration, which

would be independent of a new regulatory body: the Canadian Energy Transmission Commission (CETC). Under the proposed changes, a plan for a new pipeline or power transmission line that crossed borders would take at least three years to get approved: one year to determine if it would be consistent with Canada’s energy and climate strategies and two years to pass a joint review panel of the Canadian Environmental Assessment Agency (CEAA) and the new CETC. “That’s not a bad thing to have an early signal whether your project is going to be approved or not because it is or isn’t in the national interest,” said Mark Pinney, manager of markets and transportation for the Canadian Association of Petroleum Producers (CAPP). “I’d rather know sooner rather than later, after a multi-year process, that the project wasn’t in the national interest.” But Pinney is concerned that the initial process would take 12 months. The current NEB approval process is supposed to take no more than 15 months. The panel’s recommended process would take 36 months. By the time the overhaul is complete, the most contentious pipelines—ones that would move bitumen from Alberta’s oilsands—could be a thing of the past. Most of the major pipeline projects proposed to move Alberta bitumen to the U.S. or the West Coast have already been either approved (Trans Mountain, Line 3) or rejected (Northern Gateway). Many energy experts say Alberta’s oilsands growth curve is headed for a plateau, with investment already shifting to light oil, which is cleaner, less capital intensive and easier to develop. CONTINUED ON PAGE 14

JUNE 23, 2017

PIPELINE NEWS NORTH •

OUTLOOK

Drilling up, rig count down in CAODC’s revised 2017 forecast The Canadian Association of Oilwell Drilling Contractors (CAODC) announced its revised 2017 Drilling Forecast on June 13:

coalition government in British Columbia has indicated it would “use every tool in (its) toolbox” to stop the Trans Mountain Expansion project, while the panel reviewing • Projected 2017 wells drilled: Energy East is proposing new and 6,842—an increase of 2,177 from redundant processes nine months original forecast after protests stopped the initial • Projected 2017 operating days: review proceedings. 71,839—an increase of 22,859 In the United States, outspoken from original forecast government support for the oil • Projected rig count in for Year and gas industry and US energy End 2017: 635—a decrease of 30 independence has resulted in rigs drilling activity in the Permian basin nearing a return to 2014 While the stabilization of WTI levels. Rig counts continue to grow pricing and a relatively cold winter because of more attractive day in western Canada have helped rates and lower costs, and CAODC increase utilization rates for members with US operations are CAODC members, market access deploying capital and assets south and US energy policy continue of the border to take advantage of to limit Canadian industry the more competitive marketplace. competitiveness. “Headwinds still prevail in our Although the federal government sector at home,” notes CAODC has approved Enbridge’s Line President Mark Scholz. “The 3 and Kinder Morgan’s TMX United States understands the world pipeline projects, further delays needs oil and gas, and embraces are expected. An NDP-Green its industry as an opportunity.

Feds approve 40-year export licence for Woodfibre LNG Woodfibre LNG Limited announced June 5 that the Government of Canada has approved a 40 year export licence for the Woodfibre LNG Project in Squamish. In a media release, Canada’s Minister of Natural Resources Jim Carr said, “We know there is tremendous demand for natural gas, especially in the fast-growing countries of Asia. The approval of Woodfibre LNG’s 40-year export licence provides certainty for investors while creating jobs for Canadians as the world moves toward a low-carbon future. This project also underscores the significance of working together with First Nations communities, as it will lead to environmental protection and economic benefits for the Province of British Columbia and the Squamish Region.” On April 6, 2017, the National Energy Board (NEB) announced that it had granted the 40 year export licence to the Woodfibre

LNG Project, subject to a Governor in Council approval. In its decision, the NEB found that the quantity of natural gas proposed to be exported by the Woodfibre LNG Project, for a term of 40 years, is surplus to Canadian needs, and can accommodate a plausible increase in demand as well as exports proposed by the Woodfibre LNG Project. The Project received a 25-year licence to export approximately 2.1 million tonnes of LNG per year in December 2013; however, amendments to the National Energy Board Act Part VI Regulations in 2015 increased the maximum term to 40 years. All of the commitments Woodfibre LNG Limited made in its environmental assessment certificate application, and the regulatory conditions, plans and permits required for construction and operation of the Woodfibre LNG Project will remain in effect for the life of the project.

In Canada, some provincial governments, and the federal government, choose to speak of Canadian oil and gas as an old and embarrassing legacy, to be phased out at the earliest convenience.” Although Canadian utilization rates have increased year over year, cumulative regulatory and tax burdens and a lack of market access are keeping costs high and day rates low. “Our sector will not truly recover until provincial and federal governments accept the fact that oil and gas are an important part of the world’s energy future,” notes Scholz. “We need leaders who are proud to recognize the value our industry, and the men and women who work in it, bring to the entire country. Sharing our responsible and ethical products with the world, and using our best-in-class expertise to shape the future of energy are easy wins for both the economy and the environment.”

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OUTLOOK

Tight oil grows in the Montney while Cardium, Bakken take hit The increasingly busy Montney play that straddles the northern Alberta-B.C. border is the only area in Canada where tight oil production is increasing, according to data released last week by the National Energy Board (NEB). The Montney has been compared to the booming Permian Basin play in Texas due to its stacked resource potential, prolific wells, relatively low

costs and ongoing improvement potential through technology development. “The Montney Formation was the only formation that had its production grow since 2014, from 60,000 bbls/d to 95,000 bbls/d. This was largely due to increased production of condensate, which is considered a form of oil,” the NEB reports. “Montney condensate is obtained from tight gas wells and

sells for a higher price than crude oil in western Canada because it is in high demand as a diluent that allows bitumen to be shipped by pipeline.” Overall, thanks to low oil prices since mid-2014, Canadian tight oil production decreased from a peak of about 425,000 bbls/d to about 345,000 bbls/d at the end of 2016, the NEB said. “The main reductions came from the Cardium Formation

of Alberta, which fell from 85,000 bbls/d to 50,000 bbls/d, and the Bakken Formation of Saskatchewan and Manitoba, which decreased from about 60,000 bbls/d to 40,000 bbls/d.” The drop in production is a direct result of fewer wells being drilled, as in tight oil new wells must continually be added to balance out high decline rates. —JWN Energy

Ottawa to provide $2 billion over five years for low carbon economy fund The Canadian federal government will establish a Low Carbon Economy Fund, which will provide $2 billion over the next five years to reduce greenhouse gases and generate clean growth, Catherine McKenna, environment and climate change minister, announced June 15. The fund is an important part of the Pan-Canadian Framework on Clean Growth and Climate Change, which reaffirmed the importance of collaboration between the federal government and the provinces and territories in addressing climate change, said the government. The fund will help provinces and territories build on the leadership they have shown to date and deliver on their commitment to reduce climate changing emissions. The fund consists of two parts: the $1.4 billion Low Carbon Economy

Leadership fund and the $600 million Low Carbon Economy Challenge. Under the leadership fund, money will be available to support the leadership commitments territories that provinces and territories outlined in the framework, enabling those that have adopted it to build on the leadership they have shown to date. Over the summer of 2017, the government of Canada will engage provinces and territories on their proposed projects. After project approval, bilateral funding agreements will be put in place so that projects can begin in the fall and winter. The remaining $600 million for the Low Carbon Economy Challenge will be available for the implementation of the framework and for projects submitted by municipalities, indigenous governments and

organizations, businesses and both not-for-profit and for-profit organizations in addition to those from the provinces and territories. Projects that best reduce GHG emissions and generate clean growth will be considered for funding, said the government. Further details will be available when it formally launches the challenge in the fall of 2017. The Low Carbon Economy Leadership Fund and the Low Carbon Economy Challenge will reduce emissions through targeted projects such as: Rebates for installing high performance equipment and incentives to retrofit homes and commercial buildings; Projects improving energy efficiency for industries, supporting changes in their processes and helping them switch to lower carbon

fuels; and, Programs for reforestation, enhanced forest management, and utilizing dead wood after forest fires or insect infestations. “Canada has great expertise and a proven history of innovation in our natural resource and energy sectors,” Jim Carr, natural resources minister, said in a statement. “This investment will help to build on this capacity, to create and capture new opportunities in the low-carbon economy across a broad range of industry sectors.” “We understand that a clean environment and a strong economy go hand in hand,” said McKenna. The fund, she said, is seeking “the best and most innovative ideas to reduce emissions for the good of current and future generations.” —Daily Oil Bulletin

JUNE 23, 2017

PIPELINE NEWS NORTH •

OUTLOOK

Growth in oil sands projects drives need for more pipelines to 2030 Canada will need more pipelines built through to 2030 to transport an additional 1.3 million barrels per day of oil sands production to markets across North America and around the world, the Canadian Association of Petroleum Producers (CAPP) announced today in its 2017 Crude Oil Forecast, Markets and Transportation report. Overall Canadian oil production will grow to 5.1 million b/d in 2030, up from 3.85 million b/d in 2016. This 1.3-million-b/d growth will be driven by a 53-per-cent increase in forecasted oil sands production of up to 3.7 million b/d in 2030 from 2.4 million b/d in 2016. Conventional oil production is expected to remain flat, producing 884,000 b/d on average throughout the outlook. New offshore production from the Hebron project in Newfoundland and Labrador, expected at the end

of 2017, will contribute to a rise in eastern Canadian output to 307,000 b/d by 2024, but thereafter, due to natural declines, forecasted production will drop to 186,000 b/d by 2030. The projected growth will exceed the existing pipeline transportation capacity, highlighting the urgent need for pipelines heading east, west, and south. Today, the pipeline network can transport 4 million b/d of oil and oil products but by 2030 it will need to move more than 5.5 million b/d. Increased pipeline capacity to reach more Canadians and new, growing markets around the world will ensure Canada remains globally competitive. “The urgent need for new pipelines to increase our competitiveness continues to be one of the biggest challenges facing our industry. Without access to emerging new markets we’re putting our economy

at risk,” CAPP President and CEO Tim McMillan said. Capital spending in the oil sands is expected to decline for the third consecutive year to $15 billion in 2017 from $34 billion in 2014. Drilling by conventional crude oil producers is forecast to increase 70 per cent compared to 2016 levels, but will still be 40 per cent lower than in 2014. At present, Canada’s oil industry faces a number of challenges tempering long-term growth prospects, including uncertainty related to provincial and federal climate change policies in Canada, potential protectionist policies in the U.S., and diverging regulatory efficiencies between Canada and the U.S. Among its biggest challenges continues to be pipeline constraints. In the past year pipelines such as the Trans Mountain Expansion Project, Enbridge Line 3, and Keystone XL

have been approved and, when built, will provide much-needed pipeline capacity to access North American and Asian markets. However, Energy East – a portal connecting Canada to Europe and beyond – is still needed to further connect Canada’s growing supplies to diverse markets. “Canadian oil producers continue to face a number of challenges such as industry competitiveness, regulatory uncertainty, and low commodity prices, in addition to lack of access to new markets. The success of Canada’s energy future relies on the ability to overcome these challenges,” said McMillan. Earlier this month CAPP released the Global Energy Pulse, its first-ever international research into world views on oil, natural gas, Canada and the world’s energy future. Among the key findings, Canada ranked No. 1 as the preferred supplier for oil and natural gas to global markets.

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Shell Canada contributed $2,000 to the North Peace Justice Society on June 19 to help fund the ongoing maintenance of the society’s community gardens. The society is celebrating 20 years in Fort St. John. Offenders who go through the society’s programming must work several hours of community service, either at a non-profit agency or the gardens. “It’s the first tep toward healing and reintegrating the offender back into the community as a productive member,” executive director Susan Phillips says. Above: Susan Phillips accepts the funding from Mindy Henyu, External Relations Advisor Greater Groundbirch for Shell Canada.

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JUNE 23, 2017

PIPELINES

PIPELINE POKER

How the Trans Mountain expansion project could play out in B.C. There has been plenty of rhetoric about the future of Kinder Morgan’s Trans Mountain oil pipeline expansion. The new B.C. NDP-Green alliance is vowing to block the project. Alberta Premier Rachel Notley declares it will be built. And Prime Minister Justin Trudeau says federal approval for the project won’t change, even if a new provincial government pushes for rejection. The expansion would twin an existing pipeline from the Edmonton area to a terminal in the Vancouver area, allowing more Alberta oil to be shipped by tanker to overseas buyers. So what power, if any, would a new B.C. government have? “The province actually has considerable power,” said David Anderson, former Liberal MP and leader of the B.C. Liberal Party from 1972 to 1975. The federal government holds legal jurisdiction over large export pipelines. But there are still ways the province can intervene — or at least slow its progress. “It’ll be a bit like a card game. One card will play, then another will come. It won’t all be determined at once,” Anderson said. Here are three potential moves: WITHHOLD PERMITS Kinder Morgan needs dozens of provincial permits to build the pipeline — Anderson estimated 40 to 50 — in areas such as river crossings and road access. The province can delay or deny those. “Water and land are provincial issues and crossing a river requires a permit. They would be required to issue the permit, because they are

the agency with the greatest knowledge of it,” Anderson said. The company would not reveal how many provincial permits it still needs. Asked how many had been obtained since the election, it said: “The permitting process is underway and ongoing.” ENVIRONMENTAL ASSESSMENT An NDP minority government with Green support could put new demands on Kinder Morgan to pass a provincial environmental assessment. “(It) could say, we want to do our own due diligence, as the province of B.C., to do a set of hearings under the environmental-protection laws and regulations of the province,” said Michael Prince, Lansdowne professor of social policy at the University of Victoria. When the federal government streamlined its environmental-approval process in 2012, it allowed provinces to sign “equivalency” agreements to avoid duplications. But there’s nothing stopping the province from conducting its own review, Prince said. Additionally, when the B.C. Liberal government issued its environmental certificate to Trans Mountain, it added 37 conditions to the National Energy Board’s approval of the project. They include requiring the company to buy carbon offsets for the greenhouse-gas emissions created during construction, as well as conducting research on the behaviour of heavy oil in fresh and saltwater conditions. The province might find that those conditions

haven’t been met. ENGAGE IN LAWSUITS The pipeline project and the bodies that approved it are already facing more than a dozen lawsuits. The province could launch its own constitutional challenge on behalf of indigenous people under section 35 of the Constitution, which covers aboriginal treaty rights. Or it could join an existing suit as an intervenor. Intervenors have varying degrees of power—some submit briefs, while others speak in court. “The government of B.C. would be a fairly significant intervenor,” Prince said. Beyond whatever ruling might come from it, the strategy could bog the company down so much financially that the project isn’t worth pursuing. Among the petitions already filed is one from three First Nations—the Coldwater, TsleilWaututh and Squamish—who are arguing there has been insufficient meaningful consultation. The City of Vancouver is taking the ministries of environment and natural gas development to court to quash the province’s environmentalassessment certificate. Evironmental organizations Raincoast Conservation Foundation and Living Oceans Society filed for judicial review of the federal approval, claiming the increased tanker traffic will be the “death knell” for the southern resident killer whales, which are protected under Canada’s Species at Risk Act.

JUNE 23, 2017

PIPELINE NEWS NORTH •

PIPELINES

through the required hoops for the project to begin. “Trans Mountain has followed every process and met every test put before us. Over many years, our project has been reviewed, analyzed, discussed and considered thoroughly,” Ian Anderson, president of Kinder Morgan Canada, said in a statement. With approval from the National Energy Board, federal government and environmental

certificate in hand from the province, it is moving forward. “With financing in place and a final investment decision, we are starting to award significant contracts and are moving ahead with the benefit agreements we have in place with aboriginal and local communities,” he said. Construction is set to begin in September. —Times Colonist

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HOWEVER ... Whatever move the province makes, it won’t be the last word. On June 6, the federal government once again threw its weight behind the project. The House of Commons passed a motion by Conservative MP Mark Strahl in a 252-51 vote, affirming that the project has social licence to proceed, is critical to the economy, is environmentally sound and should proceed as planned. Prime Minister Justin Trudeau said, after the B.C. NDP and Green leaders teamed up to fight the pipeline, that the federal government made the decision to approve it “based on facts and evidence on what is in the best interests of Canadians and indeed, all of Canada.” Anderson said the stage is set for a federal assertion of its jurisdiction, possibly through a cabinet motion or motion in the House of Commons—though he called it a “nuclear option” that would be politically risky. “(Trudeau) prepared the ground for such a declaration, which would indeed give him the opportunity of overriding provincial power,” he said. “It’s going to have every other province saying: ‘Well we don’t care much about a pipeline, because we’re from P.E.I., but we do care about the federal government marching in.” Ultimately, it might be up to the courts to decide who has the last word. “There’s still a larger question: Constitutionally, does the province have the ultimate veto on this?” Prince said. “There will be the court of public opinion and the court of law.” KINDER MORGAN Kinder Morgan says it has already jumped

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JUNE 23, 2017

OILMEN’S

Ezequiel Miranda goes up and down out of a bunker on the 18th hole at the Oilmen’s golf tournament June 10.

Kevin McNee makes it five straight at Oilmen’s Golf Tournament DILLON GIANCOLA sports@ahnfsj.ca

Kevin McNee is the Oilmen’s golf champion once more, even if he considers it a fluke. McNee won the championship flight at the 55th Annual Oilmen’s Golf Tournament at Lakepoint Golf and Country Club on June 10. But he almost didn’t claim the top prize this year. “I didn’t feel too comfortable to-

day. I was two strokes down the whole day,” McNee said of his championship round against long-time friend Chris Ford. McNee scored a par on the 15th hole to get within one stroke, and won the 17th to tie the match. However, he missed a putt on the 18th for the win, and the match had to go to playoffs. “When I hit it I thought it was in and the match was over, but that’s golf and that was it,” he said.

Ford and McNee used to work at the golf course together as kids growing up. “It’s pretty rare when you play against your competitor but you’re actually cheering for them to win. That’s how it was today, and I’m pretty sure it was mutual,” McNee said. In the end though, McNee was able to capitalize on a good chip on the second playoff hole, while Ford was unable to get up and down from

the sand efficiently. “I come here really only for fun. I’ve just been really lucky, and played good at the right time and made the right shots. I’ve been really fortunate,” McNee said. The tournament had 60 more people than last year, with 224 players in total. An extra flight was added to the tournament this year. “The weather is good, and everyone’s been having fun,” said Ryan Galay, general manager of Lakepoint.

JUNE 23, 2017

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INVESTMENTS TransCanada plans $2 billion on expansion TransCanada Corp. plans to invest $2 billion expanding its natural gas pipeline network in B.C. and Alberta over the next four years. TransCanada announced June 14 that it will expand its NOVA Gas Transmission Line, a network of pipelines that gather natural gas in the fields of northwest Alberta and Northeast B.C. The expansion is needed to meet increasing production and demand for additional pipeline capacity in the Montney formation straddling the B.C.-Alberta border, and Alberta’s Duvernay and Deep Basin formations. “Our strategy is to maintain and optimize NGTL’s competitive position and to focus on growing our established network to connect growing volumes ofWestern Canadian Sedimentary Basin natural gas to key market areas,” Karl Johannson, TransCanada’s executive vicepresident of natural gas pipelines, said in a press release. Johansson said the $2 billion commitment is part of a total investment commitment of $5.1 billion for the NGTL system—a

25,000-kilometre long interconnected network of natural gas pipelines in Alberta and B.C. that ties into TransCanada’s larger 91,500-kilometre network of gas pipelines stitched across North America. There is a growing demand from producers for additional capacity to serve the U.S. market. The Montney in particular has emerged as a highly competitive, low-cost region that is allowing Canadian producers compete with American gas producers. TransCanada also recently completed an open season in which producers committed to move more gas through its Pacific Northwest system into California and Nevada. The expansion will include an additional 273 kilometres of pipeline, 150 megawatts worth of power for compressors and a range of other new infrastructure. It is still subject to approvals by the National Energy Board. The company plans to begin the expansion in early 2019, with completion slated for the second quarter of 2021. —Business in Vancouver

Vopak, AltaGas jointly invest in propane terminal Royal Vopak and AltaGas Ltd. announced in May that they have entered into a joint venture and will invest together in the development of the Ridley Island Propane Export Terminal (RIPET). RIPET is expected to be the first propane export facility off the west coast of Canada. The project is to be designed to ship 1.2 million tonnes of propane per annum, with approximately 96,000 cubic meters of storage capacity. The facility is expected to be commissioned in Q1 2019. Vopak will take a 30 per cent interest in RIPET. Vopak’s investment is underpinned by long-term customer contracts and is fully aligned with Vopak’s long-term strategy where storage and handling of gas has been earmarked as one of the strategic focus areas. Canada has a structural surplus in gas and natural gas liquids for which Asia is an important market to export these energy products. “We are excited to form this joint venture with Vopak and have them as a partner in RIPET,” said David Harris, President and CEO of AltaGas. “Vopak is a very strategic global tank storage company and brings sig-

nificant experience in terminals worldwide. We look forward to working with them on RIPET as well as considering future opportunities to further build out our joint venture.” “We are very much looking forward to working together with AltaGas in this new partnership”, said Eelco Hoekstra Chairman of the Executive Board and CEO of Royal Vopak. “Storage and handling of gas is an important strategic focus area for Vopak. We are confident that we have found a strong partner in AltaGas that is a well-respected Canadian company with experience in developing energy projects.” The RIPET site is near Prince Rupert, British Columbia, on a section of land leased by Ridley Terminals Inc. from the Prince Rupert Port Authority. The site has a locational advantage given very short shipping distances to markets in Asia, notably a 10-day shipping time compared to 25-days from the U.S. Gulf Coast. Propane from British Columbia and Alberta will be transported to the facility using 50-60 rail cars a day through the existing CN rail network.

Keyera sanctions Wapiti gathering & processing complex south of GP Keyera Corp. announced May 31 the sanctioning of the first phase of its natural gas gathering and processing complex in the Wapiti area south of Grand Prairie. The sanctioned portion of the Project is supported by agreements with its primary customer, which include an area dedication and take-or-pay commitments under a long-term gas handling agreement. The first phase of the Project includes a 150 million cubic feet per day sour gas processing plant with acid gas injection capabilities and 25,000 barrels per day of condensate processing facilities, as well as a gathering pipeline system and field compressor stations. Based on the proposed construction schedule, operations are targeted to start up in mid-2019. Phase one is estimated at $470 million as it includes the build-out of certain infrastructure sufficient to support both phases. As a result of this decision, Keyera now expects to invest growth capital of between $800 million and $900 million in 2017. Keyera is actively negotiating with several other producers in

the area to nominate additional volumes and permit sanctioning of the second phase of the Project. Phase two would add an additional 150 million cubic feet per day of sour gas processing capacity and extend the gathering system at an incremental cost of approximately $155 million. The total cost of the two-phased Project is expected to be approximately $625 million. Additional third parties may require incremental gathering systems to be built. “Keyera is very pleased to have reached an agreement with its primary customer to begin constructing phase one of this Project in the liquids-rich Montney,” said Bradley Lock, Keyera’s Senior Vice President of Gathering and Processing. “This Project, along with our Wapiti pipeline and Simonette gas plant, increases our presence in one of the most exciting developments in the Western Canada Sedimentary Basin. We look forward to working with area producers and stakeholders to develop this infrastructure in an environmentally and financially responsible manner.”

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JUNE 23, 2017

IN BRIEF Sanjel celebrates one-year anniversary

CONTINUED FROM PAGE 4 In Canada, the chief regions for light oil exploration and extraction are the Montney and Duvernay formations in B.C. and Alberta. “It certainly has come to a point where future developments on the scale that we’ve witnessed over the recent past is questionable,” Chris Bloomer, president and CEO of the Canadian Energy Pipeline Association, said at a recent conference of energy regulators and utilities in Vancouver. “In B.C. and Alberta, in the Montney and Duvernay formations, we have gigantic resources that are just being developed. They are competitive today – they’re going to be a force in the future. They’re not bitumen. They’re gas, NGL [natural gas liquids] and light oil. They are going to need new infrastructure. It’s going to be huge. “So the question really is, ‘Are the debates of today going to lead to better policy in the future to allow us to realize the value of those resources in a time frame that’s meaningful?’” Bloomer was among the speakers on a panel on pipelines at the Canadian Association of Members of Public Utility Tribunals annual conference held in Vancouver earlier this month. Eugene Kung, a lawyer with West Coast Environmental Law, who also spoke at the conference, said a two-phase approval process might help prevent legal challenges like those sparked by the NEB process that approved the Trans Mountain expansion. In the coming months, the federal government will be receiving feedback from the public on the panel’s recommendations. The public comment period ends July 14. —Business in Vancouver

Sanjel Energy Services Inc. is celebrating its first year in operation with significant achievements, such as completing more than 4,500 service jobs for western Canadian oil and gas companies. “We are extremely proud of reaching our first-year anniversary and the successes we have had so far,” said Shane Hooker, president and CEO of Sanjel, which is focused on providing primary and remedial cementing solutions as well as acidizing services throughout Canada. “Despite commencing operations in a challenging environment, Sanjel Energy Services has successfully and safely completed all of its service jobs, while remaining profitable. I would like to thank our employees

and clients for their contribution and support. Our company is poised for great opportunities ahead.” Sanjel said it is continuously striving to improve well integrity by advancing its technologies and processes. To achieve these goals, the company has been collaborating with world-leading academics to reduce the risk and impact of cement failures by examining how and why cements can fail downhole. In the last year alone, Sanjel has cemented over 200 wells in the heart of the Montney. The company said it is also positioning itself as an industry partner in the remediation and abandonment services.

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• Distributed to the community in general through these ﬁne publications, Alaska Highway News, Dawson Creek Daily and Fort Nelson News. • Distribution by mail and direct drop-off to Oil & Gas companies,and related businesses and organizations, in the following communities: BRITISH COLUMBIA – Arras, Baldonnel, Cecil Lake, Charlie Lake, CHETWYND, Clayhurst, DAWSON CREEK, Farmington, FORT NELSON, FORT ST. JOHN, Goodlow, Groundbirch, HUDSON HOPE, Moberley Lake, Pink Mountain, Pouce Coupe, Progress, Rolla, Rose Prairie, Sunset Prairie, Taylor, Tomslake, TUMBLER RIDGE, and Wonowon. ALBERTA – Baytree, Bear Canyon, BEAVERLODGE, Berwyn, Bezanson, Bonanza, CLAIRMONT, Eaglesham, FAIRVIEW, Falher, Girouxville, GRANDE PRAIRIE, Grimshaw, Grovedale, HIGH PRAIRIE, Hines Creek, Hythe, LaGlace, MANNING, McLennan, PEACE RIVER, Rycroft, SEXSMITH, Silver Valley, Spirit River, VALLEYVIEW, Wembley, and Worsley, Zama City.

JUNE 23, 2017

PIPELINE NEWS NORTH •

IN BRIEF

Canada Energy Partners updates appeal process for water disposal The Oil & Gas Appeal Tribunal of British Columbia has revised the timeline for Canada Energy Partners Inc.’s appeal of the order issued by the British Columbia Oil & Gas Commission suspending all disposal activities at the Company’s water disposal well in Northeast B.C. All submissions related to the appeal must now be delivered by July 20th, after which the Tribunal will deliberate and render a decision. This delayed schedule was issued in response to the request of BC Hydro, the owner of the Peace Canyon Dam. The dam is located 3.3 kilometres away from the Company’s water disposal well, which is a focal point of the appeal. The Company also received a letter from the OGC which

stated, “I write to advise that the Commission is considering taking action under Section 26(1)(c) of the Oil and Gas Activity Act to cancel the above noted well permit.” The Company has until June 26th, 2017 to rebut the OGC’s consideration and will be doing so. The OGC also concluded and released the results of its Technical Review of the Company’s water disposal well and the potential of induced seismicity related thereto. The OGC engaged an outside consultant to evaluate the risk of damage to the dam from induced seismic event related to the Company’s water disposal operations, which concluded in part, “A pulse type motion, as is expected from a low to moderate induced seismic event, is considered to have a reduced

probability of causing failure or damage to the PCD … We have not identified any compelling reason for induced seismicity to result in significant damage to, or an outright failure, of the PCD. “Based on the recorded history of fracking and injection well induced seismic events in northeast BC, and provided that reinjection conditions remain similar to the practice to date, the probability of significant damage or a failure occurring is within expected norms for life safety, based on the British Columbia Building Code and our present understanding of the stability of the PCD structure.” The Company believes that this study supports the preservation of its disposal well permit and the reinstatement of its water disposal rights.

The Company will provide further updates of significant benchmarks to the appeal process as they emerge.

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