PNN SEPT 2021

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PIPELINE The Pipeline News North

NEWS NORTH

Serving the Oil and Gas Industry in Northern B.C. and Alberta VOL. 13 • ISSUE 09 • DIST: 17,500

September 2021

FREE

LNG roof raised in Kitimat In what has already been a year of key engineering and construction milestones at the LNG Canada export facility in Kitimat, this could be the capper (so far): An enormous circular roof made of steel and weighing 1,540 tonnes was carefully raised into position earlier this month, and now sits securely atop the site’s LNG storage tank, making a dramatic new addition to the landscape. The distance from the tank’s reinforced concrete floor to the top of its domed ceiling is 56 metres, or about 180 feet, making the entire structure taller than Rogers Place arena in Edmonton, and just six meters shorter than B.C. Place stadium in Vancouver. Such comparisons are apt, because from a distance, the LNG tank could almost be mistaken for a modern sports arena. One of the world’s largest LNG tanks with 225,000 cubic meters of usable interior space, it will store liquified natural gas produced at the LNG Canada facility. The LNG will be piped from the tank into special ocean carriers for export to countries that require low-carbon energy. Planning and building such a large piece of infrastructure is no easy feat, says Naman Maheshwari, the LNG tank project lead. “This is a very complex project, with multiple work scopes and contractors,” he notes. Raising the roof required enormous precision, attention to safety and technical capability. So how does one raise a roof equivalent in weight to eight Boeing 747s? Slowly, says Maheshwari. The roof was lifted from ground level using light air pressure from fans, at just 22 millibars, or about .32 pounds per square inch (psi). This is a very low pressure, less

than one-one hundredth of a regular car tire, but sufficient because the roof covers a lot of area: its diameter is 92 metres. The lift took almost three hours, starting early in the morning after “final-final checks,” says Maheshwari. A group of inspectors went inside the tank while it pressurized. The roof was initially raised just a couple of meters to ensure pressure seals inside the tank were working properly, and that the roof was elevating in a balanced position. With all systems working flawlessly, the main operation commenced. Once the roof was fully raised, more than two dozen welders secured it to its final position. Later that day, the air pressure inside the tank was released. For everyone involved, the lift was extremely satisfying. But it represents only part of the tank work required. “The tank is now roughly 40% finished,” says Maheshwari. “The critical path now moves from civil works to mechanical, and provides the opportunity to open more work fronts inside the tank.” Eventually, the roof will be encased in concrete, matching the tanks walls, and an inner tank made of 9% nickel alloy steel will be installed. “The successful LNG tank roof raise represents another accomplishment for the LNG Canada project, and demonstrates once again the high degree of professionalism, skill and care that go into our facility,” says LNG Canada CEO Peter Zebedee. “In June, we saw the arrival of our first main cryogenic heat exchanger and pre-cooler units, and we’ll start receiving the first of our modules this fall. We’re making great progress, and we’re doing it safely. It’s an exciting time for the LNG Canada project as we continue to go vertical. I’m tremendously proud of the entire project team.”

LNG CANADA

Naman Maheshwari, LNG Canada’s LNG tank project lead.

LNG CANADA

The roof of the LNG tank being raised.

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2 The Pipeline News North, SEPTEMBER 16, 2021

New premium for B.C. gas By Nelson Bennett

Whether it’s fish or forestry products, environmentally conscientious buyers will often look for sustainability certifications, like the Forest Stewardship Council label for wood products or the Marine Stewardship Council for seafood. More and more, utilities are also now demanding higher standards for “responsibly sourced” natural gas using relatively new validation and certification tools and brands. And according to these certifiers – as well as a study published in Nature’s Scientific Reports - natural gas produced in B.C. should be able to command a low-emissions premium, simply because it comes from B.C. Pacific Canbriam Energy, an Alberta producer that operates exclusively in the B.C. Montney formation, recently received certification from Equitable Origin, which provides ESG (environmental, social and corporate governance) certification for energy companies. It is the second Canadian natural gas producer to receive Equitable Origin’s EO100 certification. The other is Seven Generations – another major player in the B.C. Montney – which merged with ARC Resources Ltd. earlier this year in an $8 billion “strategic Montney combination.” The certification was part of what is being billed as the “first-ever” responsibly-sourced gas supply agreement in Canada, under which the Quebec natural gas utility, Energir, will source natural gas from Pacific Canbriam. Pacific Canbriam will also be the natural

gas supplier for the Woodfibre LNG plant in Squamish. The certification considers all ESG metrics, and one of them is greenhouse gas emissions intensity. Natural gas produced in B.C. tends to have a much lower emissions intensity than natural gas produced elsewhere in North America. Part of that is just pure chemistry. Natural gas in the Montney formation simply has a lower carbon content than gas from the Horne River basin, for example. “The gas that’s coming in from the Montney is just incredibly low in CO2 content,” said Rebecca Scott, a spokesperson for Pacific Canbriam. “By its very nature, it’s a low carbon content.” Thanks to an electrification drive in B.C., some of the natural gas processing – which traditionally used natural gas itself to power processing plants -- runs on clean hydro electricity. More importanty, however, methane emissions from both the Montney and Peace regions are “extremely low,” according to researchers at St. Francis Xavier University. “Emission intensities varied widely for natural gas production, where older, lowproducing developments such as Medicine Hat, Alberta showed high emission intensities, and newer developments in Montney, British Columbia showed emission intensities that are amongst the lowest in North America,” says a study, published in Nature’s Scientific Reports. One source of methane emissions in natural gas extraction is from “blowback” from well

completions. In B.C., this has been largely eliminated, by regulation and best practices, with “green completions” or flaring. “Our measurements showed average sitelevel emission rates in Peace River decreased nearly three-fold from (from 2016 to 2018)… which suggests that these new regulations are resulting in significant mitigation success in this area,” the St. Francis Xavier University study found. Operators in B.C., like Pacific Canbriam, also have reduced road emissions by using pipelines to transport both water and natural gas, which takes a lot of trucks off the road. But the gas that Pacific Canbriam produces moves to Eastern Canada along the Canada Mainline mainline, which also moves a lot of natural gas from other producers in Alberta and Saskatchewan. How will Energir know that the gas it receives is actually from Pacific Canbriam, and not some producer in Alberta? Under the agreement signed with Energir, a service provided by a company called Xpansiv uses real-time data to identify the physical gas from Pacific Canbriam to produce a digital certificate that verifies that the gas Energir receives matches the gas shipped from its EO100-certified suppliers. “That means that, even if we can’t actually follow the molecule from Pacific Canbriam to Quebec, we will inject the exact quantity of natural gas Energir buys from us and Energir will distribute the same amount through their system,” Scott explained. — Business in Vancouver

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The Fort St. John Petroleum Association is actively seeking new members. The purposes of the society Fort St John Petroleum Association are: • To create a nonprofit fraternal organization for educational, benevolent and social purposes. • To create a medium through which the society members may express themselves in Social activities, Educational pursuits and Athletic endeavors. • To contribute to the community in supporting worthwhile projects as decided upon from time to time by the society. • To provide entertainment that is enjoyable, instructive and beneficial to its members and families. • To encourage a spirit of good fellowship among the society members.

Contact us: Unless otherwise specified all regular meetings are held upstairs at the Fort St. John Curling Rink at 6:00 pm on the second Thursday of the month. Fort St. John Curling Rink 9504 96 St, Fort St John, BC Mailing Address:

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Macro signs TMX contract Macro Enterprises Inc. announced Sept. 7 that its wholly-owned subsidiary Macro Projects Inc. has entered into a pipeline construction subcontract with the Kiewit Bonatti TMEP Partnership for ongoing works related to Trans Mountain expansion. Macro says the contract, effective Aug. 31, allows it to continue with certain construction activities on Spread 5B of the expansion along the Coquihalla-Hope corridor in B.C. for the next 12 months. The prime construction contract was awarded to the Kiewit Bonatti

TMEP Partnership. Macro says the initial estimated value for the contemplated scope of work is approximately $180 million, and said it is now anticipating revenues to reach $350 million for the year ended December 31. Macro says it will also be increasing its capital expenditure program to an estimated $20 million, up from the previously guided $8 to $10 million in the second quarter in the second quarter for fiscal 2021.

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The Pipeline News North , SEPTEMBER 16, 2021

PNN MISSION STATEMENT Pipeline News North provides current, interesting, and relevant news and information about the oil and gas industry in Northeast B.C. and Northwest Alberta. Have an interesting story to share or a news lead? Email us at editor@ahnfsj.ca.

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GIANCOLA

From left: Jason Atkins, Shawn Ward, Blair Wandler and Cam Allen tee off to start the long-awaited 58th Annual Oilmen’s Golf Tournament at Lakepoint, September 2, 2021. This year’s event was a one-day scramble instead of the traditional three-day format.

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The Pipeline News North

Sale of northern BC LNG assets By Nelson Bennett

Two new micro-LNG plants under development in Terrace and Prince Rupert and a fleet of containers for shipping liquefied natural gas domestically or overseas are up for sale, following the death of Jianrong Chen, the founder of the company that owns the assets. Top Speed Energy Canada Holding Ltd. is one of a handful of startups in B.C. that have been getting in on the small-scale LNG business in B.C. using ISO containers. Unlike large LNG carriers, ISO containers can hold smaller amounts of liquefied natural gas for shipping via container ship or by truck. Top Speed has been planning the construction of two small LNG plants to serve both domestic markets and for exports to Asia. The company has a fleet of 76 ISO containers, according to Sayer Energy Advisors, which is handling the sale of the company’s assets in B.C. It also has two mini LNG plants “under development,” according to Sayer Energy Advisors. The proposed Skeena LNG plant in Terrace would produce 150,000 tonnes of LNG

annually. A smaller plant in Prince Rupert, Totem LNG, would produce 75,000 tonnes per year. Sayer says the plants are “scheduled to come into service in the fourth quarter of 2023 (Skeena) and the fourth quarter of 2024 (Totem) respectively.” According to the BC Oil and Gas Commission, neither the Skeena LNG nor Totem LNG projects are permitted yet, although a permit application is in play for the Skeena LNG project. Top Speed also has secured an offtake agreement from the Pacific Northern Gas pipeline for 30 million cubic feet per day of natural gas. “In early 2021, the founder of Top Speed passed away unexpectedly,” Sayer Energy Advisors says in its listing. “While the business case for Top Speed remains strong, the majority shareholder felt it best to divest Top Speed of all works, permits and commercial arrangements developed for the Skeena LNG and Totem LNG projects. Top Speed will also be divesting its fleet of 76 ISO containers in the Vancouver area.” — Business in Vancouver

6

,

Apprenticeships in the patch back to school to train for a new position in the oil and natural gas industry. The good news is, despite the gloomy market forecast, there are still plenty of attractive training and employment opportunities – even in hardhit Alberta – that offer a solid future in the oilpatch. One such opportunity is the apprenticeship program. According to Alberta’s Apprenticeship and Industry Training (AIT): “An apprenticeship is a post-secondary education program that combines work experience, on-the-job and technical training.” The best part about the apprenticeship program is that people can earn money while they learn on the job.

SAIT Polytechnic is recognized for its oilpatch apprenticeship training programs, which include rig technician and equipment operators. At NAIT, the apprenticeship program is so popular, application line-ups are restricted to start only at 5:30 am on registration day. In Canada, September means back to school. Usually we think of that just for kids, but in this enduring low-oil-price environment, some oilpatch workers may also be going

The apprenticeship program is wellentrenched in the oilpatch. In fact, several oil and natural gas industry apprentices were among those awarded Top Apprentice Award in 2014 by the AIT program, including employees of Precision Well Servicing (a PSAC member company), Suncor Energy and Stoneham Drilling. An oilpatch apprenticeship offers solid longterm employment opportunities, both for new entrants and for those looking to retrain for a new career. A quick online search earlier this month yielded a number of current openings involving

apprenticeships with petroleum services companies, including a company “…seeking first- to third-year apprentice steamfitterspipefitters… [whose] applicants must currently be registered with Apprenticeship & Industry Training in Alberta.” Another company is looking for a “…Journeyperson Heavy Equipment Technician or [someone] enrolled in an accredited apprenticeship program.” Other current openings called for apprenticeship electricians and mechanics. Further, those who have already completed their apprenticeship have a solid base to get and keep a good job. For example, Calfrac Well Services (also a PSAC member) is looking for a coiled tubing operator with “applicable industry training including Crane Operator Apprenticeship.” Plus, with comprehensive in-house training and advancement programs, skilled trades workers have the chance to move from entrylevel, front-line jobs up to senior supervisor positions and beyond. Apprenticeships exemplify the collaborative partnership among industry, government and training institutions. The apprenticeship program gives employees a start on a solid career, provides industry with the trained workers its needs and ensures the Canadian oilpatch remains able to compete in any economic environment.

SEPT


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8

, SEPTEMBER 16, 2021 The Pipeline News North

Canada’s oil and gas milestones 2016 First liquefied natural gas export facility is sanctioned: Woodfibre LNG, based in Squamish, BC

Canadian oil and gas service sector

2015 Canada’s sees a 47% drop in drilling rig activity from 2014 levels making it the hardest hit region (on a percentage basis) by the rapid decline in oil price.

1980 National Energy Program (NEP) introduced by Liberal government

1930 Federal government transfers ownership of natural resources to the provinces

1978 First horizontal well drilled in Canada at Cold Lake, Alberta

1927 Alberta Oil Operators’ Association formed, which evolved into today’s Canadian Association of Petroleum Producers (CAPP)

2014 Canadian natural gas exports the lowest since 1994; furthering the case for market diversification and liquefied natural gas export facilities. 2013 Working Energy Commitment is established to open up the lines of communication between the oil and gas service sector companies and the public. 2012 More than 175,000 oil and gas wells have been hydraulically fractured in Alberta and BC with no evidence of drinking water contamination 2010 Community Partners program launched to foster courteous, in-the-field behaviour 2009 First liquefied natural gas receiving terminal in Canada (Saint John, NB) begins operation 2002 First coalbed methane project in Canada 2000 First large-scale CO2 injection project for enhanced oil recovery at Weyburn, SK 1997 First coiled tubing rig in Canada 1991 First horizontal well with multistage hydraulic fracturing in Texas (since 2008, approximately 5,000 horizontal wells have been drilled in Alberta using multistage hydraulic fracturing) 1981 Petroleum Services Association of Canada (PSAC) is formed to represent the service, supply and manufacturing sectors of the

1980s 3D, then 4D, seismic introduced

1972 30-year moratorium on west coast drilling imposed by federal and BC governments 1967 Oil sands production begins 1958 Longest pipeline in the world (3,500 km) transports natural gas from Alberta to Toronto. 1953 First significant oil reservoir discovered in Saskatchewan, near Midale 1951 Oil discovered in Manitoba 1950s Hydraulic fracturing first used in Canada (introduced by Halliburton in Oklahoma in 1949) 1950 Interprovincial pipeline carries oil from Alberta to the Great Lakes region (1,800 km), linking Alberta oil pricing to international factors 1949 Canadian Association of Oilwell Drilling Contractors (CAODC) formed 1948 First natural gas discovery in BC, near Pouce Coupe 1947 After 133 dry holes, light oil is discovered by Leduc #1 well in Alberta 1943 First offshore well drilled near Prince Edward Island

1938 Energy Resources Conservation Board set up (now Alberta Energy Regulator) to reduce gas flaring activities

1924 First hydrogen sulfide (H2S) extraction plant makes sour gas “sweet” 1920 Norman Wells, NWT, oil field discovered 1914 Dingman #1 well in Turner Valley launches Alberta’s oil and gas industry 1908 Natural gas service begins in Calgary, Alberta 1902 First Alberta oil exploration well is drilled in Waterton Lakes area 1883 Well drilled for water near Medicine Hat, Alberta discovers natural gas 1866 Natural gas discovered in Ontario 1862 World’s first oil pipeline carries oil from Petrolia to Sarnia, Ontario 1859 Natural gas discovered in New Brunswick 1858 First Canadian oil well is drilled at Oil Springs (Petrolia), Ontario 1853 Canada’s first gas transmission pipeline is built in Trois-Rivières, Quebec

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10 The Pipeline News North, SEPTEMBER 16, 2021

Things to know about Canada’s energy industry before you vote Canada’s energy future is a key issue in the 2021 federal election because it affects every single person who lives here. As Canada and the world recover from the global pandemic and tackle climate change, the conversation is becoming more urgent. As Canada’s energy mix evolves to include more renewables and emerging fuels, the energy industry is evolving too. Companies are developing and adopting new technologies to reduce greenhouse gas emissions and contribute to a lower-carbon

energy future. And the industry will continue to play a critical role in supporting our country’s economy. This is an important conversation that will play out throughout the election campaign. As you discuss the various platforms and viewpoints with family, friends and candidates, here are some helpful points to share and consider. — aboutpipelines.com

GLENBOW ARCHIVES

View of Dingman #1 and Dingman #2, Turner Valley, Alberta, summer, 1914


The Pipeline News North, SEPTEMBER 16, 2021

11

TMX at full capacity this year; 9,400 at work on expansion Trans Mountain Corp.’s latest financial statements show net income for the three-month period ended June 30, 2021 increased by $33.3 million to $63.1 million, as compared to $29.8 million in the same period of the prior year. The company said the increase is mainly due to a $44.1 million increase in equity allowance for funds used during construction (AFUDC), due to spending on its expansion project. Net income for the six-month period ended June 30, 2021 increased by $59.4 million to $114.4 million, as compared to $55.0 million in the same period of the prior year. The increase is mainly due to the $81.3 million increase in equity AFUDC, due to spending on the expansion. Trans Mountain said the pipeline operated at full capacity with an average daily throughput for the quarter for the mainline of approximately 336,000 barrels per day, with 36,000 barrels per day to Westridge Marine Terminal and 215,000 barrels per day to Washington State on the Puget pipeline. The

pipeline operated at full capacity for all of 2020 and throughout the first six months of 2021. “In the first half of 2021, the company’s financial and operational performance built on a strong 2020, with continued and steady demand for access to the markets the Trans Mountain Pipeline serves” said President and CEO Ian Anderson. “As economic conditions in Canada and around the world begin to recover post- COVID-19, we are wellpositioned to continue to operate safely at full capacity.” “Expansion project construction reached approximately 30% completion as of the end of the quarter, and inclusive of preconstruction activities we exceeded 50% overall project progress. Significant progress has been reached at our facilities and terminal locations, which are between 35 and 45% complete. Many key activities, including the Burnaby Mountain Tunnel boring, are underway and progressing,” said Anderson. “The progress on the pipeline work faced

Trans Mountain said it anticipates mechanical completion of the project by the end of 2022, with commercial operations commencing soon thereafter.

some challenges with environmental conditions including extreme heat and wildfire hazards, however we were pleased to hit a key milestone of 200 kilometres of new pipe in the ground in July. We look forward to a busy summer and fall of pipelining along the entire route.” Trans Mountain said that as of June 30, 2021, 13,640 people have been hired for the expansion Project, of which 1,470 or more than 10% were Indigenous, with approximately 9,400 people actively working on the project in hundreds of communities across B.C and Alberta. Since the project’s inception, $8.4 billion in capital spending has been incurred to the end of the second quarter in 2021, including a total of $1.3 billion and $2.3 billion for the three and six months ended June 30, 2021, respectively. Spending todate on the Expansion Project also includes pre-construction costs of permitting, regulatory processes, legal matters, materials such as pipe, valves, buildings, and motors, and financing costs.

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VOL. 12

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nounces CAODC an of its e the releas g forecast in 2021 drill release of its 2021

ces the announ CAODC . Forecast increase Drilling 3,771 – an ls drilled: 2021 wel Projected 0 (3,296*) 202 – an of 475 from s: 33,938 rating day *) 2021 ope 0 (29,664 Projected from 202 4 4,27 of (505 increase e by 27 decreas to d t expecte ling rigs) Rig flee dril rigs to 478 ease of drilling 50, an incr d = 18,5 expecte Total jobs r year ove r 2,349 yea + actual t levels *forecas 0 activity along start, 202 end of Q1 ID-19 promising After a halt at the COV a crashing nomy due to the s in came to oric low global eco stry faced hist in drilling s with the indu low The oric ic. e hist tractors pandem ling con which drov DC dril oil pricing, with CAO ve rigs in June. activity, 17 acti it only record, averaging st year on nturn in the wor ed dow not only bers prolong 2020 was DC mem n of the cing extensio stry. CAO was an her redu gas indu y oil and in by furt ’s tedl aga ada den yet m Can rece ed the stor ing by on unp . However, weather and gett ice activityt numbers headcount and well serv rig flee ling the year. registered low dril ciation’s stable throughout the Asso ly tive rela d inside! remaine ed on the Continu

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• Distributed to the community in general through these fine publications, Alaska Highway News, Dawson Creek Mirror. • 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 ST. JOHN, Goodlow, Groundbirch, HUDSON HOPE, Moberley Lake, Pink Mountain, Pouce Coupe, Progress, Rolla, Rose Prairie, Taylor, Tomslake, and Wonowon.


12 The Pipeline News North, SEPTEMBER 16, 2021

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