​10 major Canadian oil and gas projects proceeding in 2018

Image: Joey Podlubny/JWN

Here's a selection of major project work underway to produce, transport or add value to Canadian oil and gas in the New Year.

1. Trans Mountain Pipeline Expansion

Kinder Morgan Canada will spend the first part of 2018 working on permitting to enable full levels of construction spending on the $7.4-billion Trans Mountain Pipeline Expansion project.

The 890,000 bbl/d expansion of Trans Mountain service from Alberta to Burnaby was previously expected to begin construction in September 2017 but has encountered challenges receiving required permits.

This includes approvals from the City of Burnaby, which the NEB ruled recently are not required in order for the company to begin construction work at its export terminals after Kinder Morgan filed a notice of motion and constitutional question.

Kinder Morgan has warned of a potential delay to project completion of nine months (to September 2020) due primarily to the time required to file for, process and obtain necessary permits and regulatory approvals.

Potential mitigation measures require obtaining greater clarity early in 2018 with respect to key permits, approvals and judicial reviews and continued planning with contractors to assess options to start or accelerate work in certain areas, the company said.

2. Inter Pipeline Heartland Petrochemical Complex

Inter Pipeline has given the go-ahead for construction of a $3.5-billion petrochemical facility that will convert approximately 22,000 bbls/d of propane into 525,000 tonnes per year of polymer grade propylene.

The Heartland Petrochemical Complex, an integrated propane dehydrogenation (PDH) and polypropylene (PP) plant will receive $200 million in royalty credits awarded through Alberta’s Petrochemical Diversification Program.

Inter Pipeline says it has completed early civil work at the site in preparation for facility construction activities in early 2018. The complex is expected to be operational in late 2021.

3. Kirby North Phase 1

In November 2016 Canadian Natural Resources became the first company to restart development of an oilsands growth project that was put on hold during the current downturn.

Construction is currently underway on the 40,000 bbl/d Kirby North SAGD project, an expansion to the 40,000 bbl/d Kirby South facility, which started operating in late 2013.

Kirby North will be targeted to deliver first steam-in in 2019 with first oil targeted in 2020.

At the time of restart, Canadian Natural said that approximately $700 million of project capital had been invested to-date, with the remaining project costs targeted to be approximately $650 million, more than $100 million less than originally expected.

4. Cenovus Energy Christina Lake Phase G

Construction is currently underway on a project to expand production capacity at Cenovus Energy’s Christina Lake in situ oilsands project from 210,000 to 260,000 bbls/d. Construction on Christina Lake Phase G was restarted in December 2016 after being suspended in late 2014 due to the oil price collapse. The company expects the capital cost of the project to be 50 percent less than the last expansion of Christina Lake, Phase F, with a go-forward estimate of between $650 million and $700 million.

First oil is expected in the second half of 2019.

5. Imperial Oil Kearl debottleneck

Imperial Oil says that in 2018 work will be underway on a $550-million debottleneck project at its Kearl oilsands mine.

The $550-million project is expected to increase design capacity of the facility from 220,000 to 240,000 bbls/d. This will be accomplished by adding supplemental crushing capacity to create an offset for when the project has equipment downtime, the company says.

6. AltaGas Ridley Export Terminal

AltaGas announced in early 2017 that it would proceed with construction of the Ridley Export Terminal, a project to export propane off Canada’s West Coast.

The terminal will be designed to export 1.2 million tonnes of propane per year (roughly 40,000 bbls per day) by the first quarter of 2019.The estimated cost of the project is approximately $450 million to $500 million.

The project is supported by an agreement with Japanese LPG shipper Astomos Energy Corporation for the purchase of at least 50 per cent of the available propane annually.

7. Pembina North Central Liquids Hub

Pembina Pipeline has sanctioned construction of the North Central Liquids Hub, a $320 million facility to support Montney operations for the Encana/Mitsubishi Cutbank Ridge Partnership.

The facility, located near Dawson Creek, BC, is expected to be placed into service in late 2018. It will provide separation and stabilization of increased condensate volumes from the Cutback Ridge Partnership to support the recently in-service Sunrise and Saturn gas plants.

Pembina says the North Central Liquids Hub can also be further expanded to serve the future requirements of the companies as well as other potential third-party producers. Additionally, the North Centrals Liquids Hub will be connected into Pembina's pipeline systems.

8. Chevron commercializing the Duvernay

Chevron announced in November that it would move ahead with commercial development on its Duvernay shale acreage, six years after commencing exploration activities in the play.

The company says the Duvernay — an early-stage liquids rich natural gas resource in west-central Alberta — is “considered one of the most promising shale opportunities on the continent.”

The program will utilize long-term infrastructure development and service agreements with Pembina Pipeline Corporation and Keyera Corporation, with service expected to be available during the second half of 2019, Chevron says.

Pembina announced that it will construct and operate $290 million of Duvernay infrastructure under an agreement with Chevron.

9. Pembina Prince Rupert Terminal

Pembina Pipeline Corporation announced in November it would proceed with construction of the Prince Rupert Terminal, a liquefied petroleum gas (LPG) export facility.

The project is expected to have a permitted capacity of approximately 25,000 bbls/d of LPG and is expected to be in service mid-2020, subject to Pembina receiving necessary regulatory and environmental approvals.

The terminal’s expected capital cost is $250 million to $270 million. LPG supply will primarily be sourced from Pembina's Redwater fractionation complex in central Alberta.

10. Tidewater Midstream Montney liquids plant

Tidewater Midstream announced in November that it would proceed with a new gas plant near Grande Prairie, Alta. with processing capacity that is tailored for the region’s liquids-rich Montney natural gas production.

The project has an estimated capital cost of approximately $210 million.

Located in the Pipestone area, the 100 MMcf/d sour gas plant will have acid gas injection and 20,000 bbls/d of NGL processing capability, as well as an extensive gathering pipeline network, the company says.

Operations are targeted to start up in mid-2019.

(Does not include all Canadian oil and gas projects underway in 2018)

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