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 News

A New Era for the Peace Region’s Energy Industry By Talena winters

History of Shell in the Peace Region hese agreements signal the end of an era for the Peace Region. Shell began the in situ operation in 1979 as a pilot project in partnership with the Alberta Oil Sands Technology and Research Authority and several other oil and gas companies.


Though the Bullhead formation was discovered in the early 1950s, the area wasn’t evaluated for commercial production until 1963, and it wasn’t until a successful test in 1974 that a decision was made to build a pilot project to evaluate the feasibility of a full-scale commercial operation. During Shell’s 38-year history in the Peace Region, they have done much to contribute to local communities, with countless donations to several organizations and projects. “This operation has a rich history and great people with lots of ties to the community. Our people have been able to grow their families and in some cases now have grandchildren in the region. They love the region and they volunteer. I’m really proud to be part of this community,” said Dino Colbourne, Carmon Creek’s Peace River Operations Manager.

fter nearly forty years as a major player, Royal Dutch Shell will soon be bowing out of the Peace Region’s energy sector, making way for Canadian Natural Resources Ltd. (CNRL) and Kineticor.


Shell’s Carmon Creek In Situ Project was shelved in October 2015 with the market downturn and lack of available infrastructure to move crude oil to global markets cited as reasons. Canadian Natural Resources Ltd. As part of a larger plan to reduce its interests in Canadian oil sands, Shell is divesting the in situ operation to a subsidiary of CNRL. While the final details are still subject to regulatory approvals, according to CNRL the company will acquire Shell’s 100% working interest in the Peace River/ Carmon Creek in situ operations, its 100% working interest in the Cliffdale heavy oil field, as well as majority interests in the Athabasca Oil Sands Project (AOSP) and other Shell projects throughout Alberta. Commenting on the acquisition, CNRL’s President Steve Laut stated: “This transaction is significant for Canadian Natural as it increases the reliability of underlying sustainable cash flows.” He goes on to say that the transactions are “positive for all stakeholders as it allows focus on the key operating strengths of both Shell and Canadian Natural.” Carmon Creek’s Peace River Operations Manager Dino Colbourne believes the transition to CNRL will be a positive one. “From my perspective, I think it’s a great thing that we have a Canadian company purchasing Canadian assets, and it’s their core business. It’s



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really exciting that we can work with our new owners to be part of their overall strategy,” said Colbourne. CNRL says as part of the agreement, they will welcome approximately 110 Shell employees at the Carmon Creek Project. Kineticor In a separate agreement, Shell sold the partially-completed 690 MW co-generation plant near Peace River in February to Kineticor Resource Corp., an Alberta-based independent power producer focused on gas-fired generation throughout Canada. OPTrust, a pension fund investment and management firm, is backing Kineticor financially as part of the agreement. According to Kineticor, the cogeneration operation will be repurposed as a standalone facility called the Three Creeks Power Plant, and there is an agreement in place between Kineticor and Shell for its future development. This is the second project Kineticor has acquired in the Peace Region within the last year, having announced plans last July for a 100 MW power plant project designed to utilize gas produced during heavy oil production. Regarding the recent acquisition, Andrew Plaunt, Kineticor’s Chief Executive Officer said: “The Alberta power market is going through significant changes over the next decade and this acquisition, coupled with the OPTrust capital commitment, significantly strengthens Kineticor’s ability to capitalize on the opportunities that will be presented in this changing marketplace.”

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Move Up Issue 14  

Move Up Magazine is Northwestern Alberta's business and lifestyle magazine highlighting the "Mighty Peace Region." Whether you're looking to...

Move Up Issue 14  

Move Up Magazine is Northwestern Alberta's business and lifestyle magazine highlighting the "Mighty Peace Region." Whether you're looking to...