Pipeline 20181107

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PIPELINE NEWS SASKATCHEWAN’S PETROLEUM MONTHLY Canada Post Publication No. 40069240

November 2018

www.pipelinenews.ca

Vol. 11/6

2018 Saskatchewan Oil & Gas Supply Chain Forum

TransCanada refurbishing pipe for Keystone XL A2 Moe says differentials could cost $500 million a year A3 20 years for Petroleum Technology Research Centre A11, A13 & A14

Andrea Korney͕ ƐĞŶŝŽƌ ŵĂŶĂŐĞƌ͕ ƐƵƉƉůŝĞƌ ĚŝǀĞƌƐŝƚLJ ĂŶĚ ƐƚĂŬĞŚŽůĚĞƌ ƌĞůĂƟŽŶƐ ǁŝƚŚ dƌĂŶƐ ĂŶĂĚĂ͕ ĐŽŶĨĞƌƐ ǁŝƚŚ ĂŶ ĂƩĞŶĚĞĞ ĚƵƌŝŶŐ ƚŚĞ ƐƉĞĞĚ ŶĞƚǁŽƌŬŝŶŐ ƉŽƌƟŽŶ ŽĨ ƚŚĞ ^ĂƐŬĂƚĐŚĞǁĂŶ Kŝů Θ 'ĂƐ ^ƵƉƉůLJ ŚĂŝŶ &ŽƌƵŵ͕ ŚŽƐƚĞĚ ďLJ ƚŚĞ ^ĂƐŬĂƚĐŚĞǁĂŶ /ŶĚƵƐƚƌŝĂů Θ DŝŶŝŶŐ ƐƐŽĐŝĂƟŽŶ /ŶĐ͘ ŝŶ ZĞŐŝŶĂ ŽŶ KĐƚ͘ ϰ͘ WŚŽƚŽ ďLJ ƌŝĂŶ ŝŶĐŚƵŬ

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PIPELINE NEWS November 2018

dƌĂŶƐ ĂŶĂĚĂ ŝƐ ŝŶƐƉĞĐƟŶŐ ŝƚƐ ƉŝƉĞ ŝŶ ĂŶƟĐŝƉĂƟŽŶ ŽĨ <ĞLJƐƚŽŶĞ y> ĐŽŶƐƚƌƵĐƟŽŶ ďĞŐŝŶŶŝŶŐ ƐĞĐŽŶĚ ŚĂůĨ ŽĨ ϮϬϭϵ PIPELINE STOCKPILED SEVERAL YEARS WILL BE GONE OVER IN DETAIL By Brian Zinchuk Regina – In July 2011, the stringing trucks were driving through Shaunavon, taking 36-inch pipe trucked from the coating plant in Camrose to a storage yard south of the Shaunavon. And there it sat, to the end of the first President Barrack Obama term. Then it sat throughout the entirety of the second Obama term, when he killed the project by denying a presidential permit. It continued to sit since the election of President Donald Trump, who, in the week following his inauguration in January 2017, invited TransCanada to reapply for a presidential permit, which he then granted. This revived the project, but construction has not yet started. The pipe sat even after that permit was granted, after Keystone XL legal odyssey continued. But finally, this past summer, the project started to gain some life to it. And it was then TransCanada started looking at its pipe stockpiles to see what it could use. At the Saskatchewan Oil and Gas Supply Chain Forum in Regina on Oct. 4, representatives

of TransCanada took part, explaining opportunities for businesses to become part of the company’s supply chain. Among those present was Doug Brunning, pipeline manager, Canada, for the Keystone XL project. He had previously worked on the now-cancelled Energy East project in a similar capacity. Earlier in the day, Andrea Korney, supplier diversity and stakeholder relations with TransCanada, told the conference that TransCanada had begun pipe refurbishment for the project. “We’re inspecting every piece of pipe,” Brunning told Pipeline News. “We have a whole test plan, 11 steps. We look at coating, we look at interior, we look for corrosion. We look at everything – cleanliness, all that other stuff. It either passes or it fails. If it fails, then it’s scrap. And there may be others where we may be able to remediate it.” “In other cases, if we find measurements of the coating thickness are too thin, we set them aside for a strip and recoat,” Brunning said. “At this point, all we’re doing is inspecting

the pipe. After we’ve done the inspection and see how much pipe we have, we will see If we, in fact, need the strip-and-recoat pipe for the project.” Asked why the amount in the stockpiles wouldn’t match the amount needed, he explained, “Keystone XL doesn’t own this pipe. TransCanada owns it. The asset gets transferred. “TransCanada had 400 kilometres that was going to go to the U.S., that’s not going to the U.S. now. We can use that pipe, here in Regina, for Canada.” He wouldn’t say if that was related to recent steel and pipe tariffs imposed by the Donald Trump administration. The industrial north end of Regina has had large stockpiles of pipe, painted white, tucked into numerous yards for many years. They’ve been there long enough to appear at five different sites on Google Earth, dating back to 2011. Imagery from October of that year showed the stockpiles in transition, from the common green coating, to a protective white paint. “It’s still there,” he noted. “It’s TransCanada

dŚŝƐ ƉŝƉĞ ǁĂƐ ƐƚŽĐŬƉŝůĞĚ ƐŽƵƚŚ ŽĨ ^ŚĂƵŶĂǀŽŶ ŝŶ ϮϬϭϭ ĨŽƌ ƚŚĞ dƌĂŶƐ ĂŶĂĚĂ <ĞLJƐƚŽŶĞ y> ƉƌŽũĞĐƚ͘ EŽǁ ƚŚĂƚ ƚŚĞ ƉƌŽũĞĐƚ ŵŝŐŚƚ ĮŶĂůůLJ ƐƚĂƌƚ ĐŽŶƐƚƌƵĐƟŽŶ ƐŽŽŶ͕ ƚŚĞ ĐŽŵƉĂŶLJ ŝƐ ŝŶƐƉĞĐƟŶŐ ŝƚƐ ƉŝƉĞ ƐƚŽĐŬƉŝůĞƐ ƚŽ ĞŶƐƵƌĞ ƚŚĞ ůŽŶŐͲƚĞƌŵ ƐƚŽƌĂŐĞ ŚĂƐŶ͛ƚ ůĞĚ ƚŽ ĂŶLJ ŝƐƐƵĞƐ͘ File photo

dŚŝƐ ŵĂƉ ĨƌŽŵ 'ŽŽŐůĞ ĂƌƚŚ ƐŚŽǁƐ ĮǀĞ ƐƚŽĐŬƉŝůĞ ƐŝƚĞƐ ĨŽƌ ƉŝƉĞ ƚŚĂƚ ŚĂĚ ďĞĞŶ ĚĞƐƟŶĞĚ ĨŽƌ <ĞLJƐƚŽŶĞ y>͘ dŚĞ ƌĞĚ ĂƌƌŽǁƐ ŝŶĚŝĐĂƚĞ ƐƚŽĐŬƉŝůĞĚ ƉŝůĞ͕ ƉĂŝŶƚĞĚ ǁŚŝƚĞ͘ dŚĞ ŐƌĞĞŶ ƉŝŶ ŝŶĚŝĐĂƚĞƐ ƚŚĞ sZ ZĞŐŝŶĂ ƐƚĞĞů ŵŝůů͘ dŽ ƚŚĞ ůĞŌ ŽĨ ƚŚĞ ƐƚĞĞů ŵŝůů ŝƐ ĨƌĞƐŚ͕ ŐƌĞĞŶ ƉŝƉĞ͕ ƚŚĞ ƵƐƵĂů ĐŽůŽƵƌ ĂŌĞƌ ƉŝƉĞ ŚĂƐ ďĞĞŶ ĐŽĂƚĞĚ͘ 'ƌĂƉŚŝĐ ĐŽƵƌƚĞƐLJ 'ŽŽŐůĞ ĂƌƚŚ pipe that wasn’t used on other projects. It’s available for us to use.” The largest stockpile, on Sherwood Road, covers an area of several city blocks. “That pipe is for us to use. Some of the pipe, in the other stockpiles sites in Canada, was taken from those stockpile sites, to be used on other projects. So we can use the Regina stockpile to replenish. “Whether or not we strip and recoat, we’re not sure yet. And if we did, it would be next year. For

you to do that program, you have to be finished all your inspection first, before the coating mill has to change their whole process.” It can’t be done on site, meaning the pipe to be recoated would have to be transported back to a plant, stripped, recoated, and sent back to the line again before usage. “This would be in a plant environment,” he said, when asked if recoating could happen in the field. Some of the pipe had

been used on other projects, he noted, as 36-inch is the most popular size. “We expect that after the inspection program, there will still be pipe left over that we will not need.” Asked when is the soonest construction might start in Saskatchewan, such as topsoil stripping, he replied, “Our plan is to start mid-next year. We’ll do all the mitigation measures that we need to with regards to migratory birds to be able to start.”

KŶ ^ĞƉƚ͘ Ϯϲ͕ ϮϬϭϯ͕ ƚŚĞ <ĞLJƐƚŽŶĞ y> ƉŝƉĞ ƐƚŽĐŬƉŝůĞ ƐŽƵƚŚ ŽĨ ^ŚĂƵŶĂǀŽŶ ǁĂƐ ĐĂƉƚƵƌĞĚ ďLJ 'ŽŽŐůĞ ĂƌƚŚ͘ 'ƌĂƉŚŝĐ ĐŽƵƌƚĞƐLJ 'ŽŽŐůĞ ĂƌƚŚ

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PIPELINE NEWS November 2018

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/Ĩ ƚŚĞ ĹšĹ?Ĺ?Ĺš Ĺ˝Ĺ?ĹŻ Ć‰ĆŒĹ?Ä?Äž ÄšĹ?ÄŤÄžĆŒÄžĹśĆ&#x;Ä‚ĹŻĆ? Ä?ŽŜĆ&#x;ŜƾĞ͕ Ĺ?Ćš Ä?ŽƾůÄš Ä?Ĺ˝Ć?Ćš ^Ä‚Ć?ĹŹÄ‚ĆšÄ?ĹšÄžÇ Ä‚Ĺś ΨϹϏϏ ĹľĹ?ĹŻĹŻĹ?ŽŜ Ä‚ Ç‡ÄžÄ‚ĆŒ By Brian Zinchuk Estevan – If sky-high heavy oil price differentials remain, it could cost the province of Saskatchewan $500 million a year. That’s according to Premier Scott Moe, speaking to reporters in Estevan after a Saskatchewan Party regional meeting on Oct. 13. The day before, Daily Oil Bulletin showed West Texas Intermediate selling for US$70.97, with a differential of US$50.50 for an implied value of $20.27 for Western Canadian Select (WC). Those numbers indicated a 71.1 per cent discount of WCS compared to WTI. Asked about this, he said, “Can you imagine the conversation in our nation if this was on agriculture or on the auto manufacturing industry or on an industry such as Bombardier operates in – as 70 per cent discount on the end product that they’re producing? Can you imagine the conversation that would be taking place in our nation of Canada? “Because it’s the energy sector, for some reason,

it doesn’t seem to be resonating at the federal levels to the degree it should be,� Moe said. “The fact of the matter is we have a disastrous oil differential that’s costing the economy and the province of Saskatchewan. The latest figure is $7.4 billion a year. It’s costing directly the Government of Saskatchewan about $500 million a year. If you put that in the perspective of the budget that we’re trying to balance here in the province, it much more than offsets the immediate financial challenges that we have.� “This is a challenge, not only for the community of Estevan, and Weyburn, and Lloydminster and Maidstone and down in the southwest, where I was yesterday, in the area of Shaunavon. This is a challenge, not only for the province of Saskatchewan, in the loss to our economy, and the loss to our government revenues. It’s a loss to all Canadians, when we’re losing this much revenue, simply because we’re not able to achieve the price that other people around

the world are able to achieve. We’re not able to achieve the price that Eastern Canadians are paying for their energy products. This is a tremendous challenge. I can’t imagine the outcry that would happen if it was in certain other industries across the nation. It’s something we’ll be bringing to every federal and provincial table we attend,� Moe said. “The indirect challenge we have with this whole differential is being created and exasperated by the lack of pipeline capacity that we have in Western Canada. We need the pipeline that we one, the TMX (Trans Mountain Expansion), that construction to start, and I’ve called for that numerous times.� Energy East needed Moe went on, “We need to re-engage on Energy East. We need to engage on every opportunity that we have to get our product to additional markets all around the world. This is something we have advocated on in the past and we need to continue into the future, because the indirect challenge that we have is

Premier ^Ä?ŽƊ DŽĞ was in Estevan Oct. 13, where he talked to local media about the Ĺ?žƉĂÄ?Ćš ŽĨ Ĺ˝Ĺ?ĹŻ Ć‰ĆŒĹ?Ä?Äž ÄšĹ?ÄŤÄžĆŒÄžĹśĆ&#x;Ä‚ĹŻĆ?Í• Ä‚žŽŜĹ? Ĺ˝ĆšĹšÄžĆŒ ƚŚĹ?ĹśĹ?Ć?͘ DŽĞ͕ ĹŻÄžĹŒÍ• ƚĂŏĞĆ? ƋƾĞĆ?Ć&#x;ŽŜĆ? ĨĆŒŽž Ć?ƚĞǀĂŜ DÄžĆŒÄ?ĆľĆŒÇ‡ ĞĚĹ?ĆšĹ˝ĆŒ Ä‚Ç€Ĺ?Äš tĹ?ĹŻĹŻÄ?ÄžĆŒĹ?͘ /Ĺś ƚŚĞ Ä?ÄžĹśĆšĆŒÄž Ĺ?Ć? Ć?ƚĞǀĂŜ D> ĂŜĚ ,Ĺ?Ĺ?ĹšÇ Ä‚Ç‡Ć? DĹ?ĹśĹ?Ć?ĆšÄžĆŒ >Ĺ˝ĆŒĹ? Ä‚ĆŒĆŒÍ˜ WŚŽƚŽ Ä?LJ ĆŒĹ?Ä‚Ĺś Ĺ?ĹśÄ?Ĺšƾŏ much of this product does end up on our rails. And we need that added capacity if we’re going to continue to increase our agricultural production, our potash production, as well as our lumber production. “That’s an annualized number over the course of the year, $500 million in royalties and taxes directly to the government of Saskatchewan, which I think speaks to the enormity of

the challenge.� “The TMX pipeline or the Energy East pipeline does not correct that itself 100 per cent, but it starts to narrow that differential that has gotten so wide as we’ve some production come on in Western Canada.� Sustainability “We must not forget this: our production in Western Canada is among the most sustainable in the

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PIPELINE NEWS November 2018

PIPELINE NEWS

EDITORIAL

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Hurray for B.C.! Boo for B.C.! And hurray for Keystone XL! As the editorial cartoon shows, British Columbia just nailed a $40 billion liquified natural gas (LNG) project. And Alberta is left looking on. The LNG Canada announcement is going to be a tremendous boon to B.C., creating a new industry. It will spur billions of dollars of natural gas development in northeast B.C., some of which will end up using the electricity from the Site C hydro dam currently under construction. Thousands of jobs will be created in construction, and thousands more in the industry to supply the completed LNG terminal. There’s going to be a pipeline, built by TransCanada, called the Coastal GasLink, going to Kitimat. There, British Columbia natural gas will be liquified and loaded on LNG carriers, i.e., ships, for Asia. Good for them. Too bad we never got around to building that other pipeline that was supposed to go to Kitimat. What was it? Oh yeah, the Northern Gateway. It was supposed to run to the coast, to Kitimat, where its contents would be loaded onto tankers, i.e. ships, for Asia. But wait! Didn’t our august prime minister tell us on Nov. 29, 2016, “The Great Bear Rainforest is no place for a pipeline and the Douglas Channel is no place for oil tanker traffic.” Indeed, so much so, the Natural Resources Canada website now says of Northern Gateway, “The Government of Canada has directed the National Energy Board (NEB) to dismiss the Northern Gateway Pipelines project application. The Government has determined that the project is not in the public interest because it would result in crude oil tankers transiting through the sensitive ecosystem of the Douglas Channel, which is part of the Great Bear Rainforest.” So how does the Coastal GasLink get to Kitimat, and then its LNG carriers out to sea, except through this Great Bear Rainforest, the place whose name magically appeared out of the coastal fog a few years ago? Ironically, the B.C. government’s website for the Great Bear Rainforest shows that Kitimat is not in the defined area, but rather the coast beyond Kitimat is. So maybe that’s why they can build a natural gas pipeline to Kitimat, but not a bitumen pipeline. Maybe it’s because the Coastal GasLink is all within the borders of British Columbia, and therefore it doesn’t need National Energy Board (i.e. federal) approval, whereas Northern Gateway did. But Northern Gateway did get NEB approval back in 2013, with 209 conditions. Then some court malarkey took place. Around this time, Prime Minister Justin Trudeau banned tanker traffic in Northern British Columbia waters. That’s oil tankers, not LNG tankers. We can’t ban those, you know. Perhaps the process for building Coastal GasLink will

be different. Instead of doing bores across roads and rivers, they’ll have a Star Trek Transporter on each side of the barrier. Why they wouldn’t use this to cover the entire distance to Kitimat, we’re not sure, but there must be a good reason. Otherwise, they’re probably going to use the same excavators, sidebooms, dozers, graders and welding rigs for Coastal GasLink as they would have for Northern Gateway. Not just the same type, but the exact same equipment, right down to the serial numbers, run by the very same operators, doing the same thing they always do – build pipelines. And they’ll do it with the same exacting high standards, too. The pipe will probably, hopefully, come from the same steel mill in Regina. The route isn’t the same. Coastal GasLink takes a somewhat more southernly route. Maybe that’s the ticket. We all know that it’s best for pipeline and powerlines to, wherever possible, take common corridors. So maybe Northern Gateway had the wrong route. Well, that should be easy to solve. Now that we know where a pipeline, a gas pipeline, can be built, it shouldn’t be too hard to build a bitumen and a condensate pipeline 20 metres over. Coastal GasLink can blaze the trail, quite literally. But it will never happen under Trudeau. All these lamentations over Northern gateway, and the tens of millions of dollars Western Canada is loosing, daily, on price differentials as a result, can lead one to become miserable. But there is a bit of hope in some late-breaking news. As much as we hate the idea of selling our oil to only one customer, that customer may soon need more of our heavy oil, right away. Sister publication Daily Oil Bulletin reported on Oct. 22 that Mexico’s newly elected president, Andres Manuel Lopez Obrador (AMLO), announced he plans to end exports of all Mexican crude oil after he assumes power this December. That will put a halt to exports of 681,000 bpd of heavy crude to U.S. refineries, principally along the Gulf Coast. In the meantime, TransCanada is gearing up to finally start construction of the Keystone XL pipeline after an over-decadelong odyssey. (It took Homer less time to get home to Ithaca after the Trojan War than it has taken to get this pipeline construction started.) And where does that pipeline lead to? The Gulf Coast refineries that will soon be deprived of Mexican Mayan crude, and with enough capacity to replace all of it, and then some. If AMLO does indeed carry out with this plan, the heavy oil discount should diminish in short order. And Keystone XL might finally be the right pipeline at the right place at the right time. Maybe then we can stop squawking about differentials.


PIPELINE NEWS November 2018

OPINION

Wheat for $2.61 a bushel, Chevy Impalas for $12,511 Among the several reasons I did not take after my father and grandfathers before him as a farmer was this little thing called $2 wheat. When I came of age in the 1990s, wheat that went for $2 to $3 a bushel was a very real thing, and a very real way for people to go bankrupt. Many did. In recent years, farming in Saskatchewan has actually been profitable for the most part, with the exception of the current never-ending harvest. That’s in part because the price of wheat hasn’t been in the dumpster. In early-October I took the heavy oil price differential narrative and turned it on its head. I put it in the perspective of applying the discounts heavy oil was getting to other commodities. West of the Battlefords is heavy oil country. Slowly over the years, the oilpatch has crept towards the Battlefords, a few miles at a time. So I pulled up the grain prices from the Cargill terminal at North Battleford, and applied the discounts heavy oil was getting on that day, Oct. 9, to wheat, canola and soybeans.

On that day, Western Canadian Select (WCS) was trading at US$28.84 per barrel, $45.50 less than the US$74.34 per barrel West Texas Intermediate (WTI) had been demanding. The discount amounted to 61.2 per cent. A few days later, when I was speaking to Premier Scott Moe in Estevan, the discount had risen to 71.1 per cent, or US$50.50. But let’s work with the 61.2 per cent value for argument’s sake. If those same discounts were applied to various agricultural commodities at Cargill, North Battleford, red spring wheat would fetch $96.11 per tonne instead of $247.75, when compared to the WCS/WTI discount. The Brent discount, applied to the same wheat, would result in a price of $84.90 per tonne. I’m still old school, so I think in bushels. That means wheat was getting $6.74 per bushel, but if the 61.2 per cent discount applied, is would be getting $2.61 per bushel. With the Brent discount applied, wheat would be $2.31 per bushel. In other words, $2

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By Brian Zinchuk

wheat, all over again. No farmer wants to ever go back to that again, and no oilman should want to see oil trading for next to nothing again, either. When oil prices were depressed worldwide, it was somewhat understandable that WCS was getting beaten down. But as oil prices have rebounded, being the last kid picked for the team, so to speak, is a little hard to take. For Saskatchewan, if this discount was applied on an annual basis, Premier Moe told me on Oct. 13 it would cost us $500 million in taxes and royalties to the province, and $7.4 billion to the economy. He’s had to revise that number several times in the last six weeks. It used to be $200 million. Then $300 million. Now it’s $500 million. That is an enormous amount of money we are leaving on the table. Let’s apply this discount to something a little more important to Ontario than

the price of wheat, like the price of Chevy Impalas. Why, you might ask? Because President Donald Trump did the very same thing a few weeks ago, when he spoke “off the record” to Bloomberg News about NAFTA negotiations. They soon became on the record. He said, “Off the record, Canada’s working their ass off. And every time we have a problem with a point, I just put up a picture of a Chevrolet Impala.” Macleans noted that “This full-size sedan has been one of Chevrolet’s most iconic and best-selling models and a staple of the Canadian automotive manufacturing sector for the last half-century.” They added the car, assembled in Oshawa, Ont., retails for $32,245 and up. Trump had threatened to apply a 25 per cent tariff to Canadian-made cars, and it had us trembling. Here, we’re taking a 61.2 per cent differential on our oil.

If wheat was at $2.61 a bushell once again, farmers would be going broke. That’s the equivalent of what’s happening to Canadian heavy oil. Photo by Brian Zinchuk So what does an Impala go for, with a 61.2 per cent discount? A measly $12,511 each. In other words, the same price I paid 20 years ago for a brand new 1998 Geo Metro. GM wouldn’t be making cars in Canada with a 25 per cent tariff, yet that much of a cut would be wonderful compared to how we’re getting beaten on heavy oil. The original plans for both the Northern Gateway and Energy East pipelines would have had them in ser-

vice, today. If they had been built, on time, these headlines would not exist today. But they do. And we are all much, much poorer as a result. And it’s money once lost, is lost forever. Thank you, Prime Minister Trudeau. You got marijuana through by now, but not those pipelines. I wonder which would have paid the bills? Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@ sasktel.net.

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PIPELINE NEWS November 2018

Meili proposes ‘Renew Saskatchewan’ plan to support ĐůĞĂŶ ĞŶĞƌŐLJ ƚƌĂŶƐŝƟŽŶ͕ ŝŶĐůƵĚŝŶŐ ƌĞŶĞǁĂďůĞ ƉŽǁĞƌ Saskatoon – The provincial New Democratic Party announced its strategy for a “clean energy transition” on Oct. 13, one that aims for a widely distributed system of very small power generation. In his keynote address to NDP convention delegates in Saskatoon, NDP Leader Ryan Meili presented his “Renew Saskatchewan plan” It was touted as removing the barriers that are keeping Saskatchewan families, farms, and businesses from reducing energy usage and shifting to lower-cost, renewable options. “Climate change demands the best of us, but Saskatchewan has fallen behind. This plan is designed to jump-start the clean energy transition we know we need, meeting the urgency of climate change with the opportunity of low-cost clean energy.” Similar to past Saskatchewan government innovations like the Rural Electrification Program or the Family Farm Improvement Program, the Renew Saskatchewan plan outlined by Meili would provide assessments and financing for

NDP Leader Ryan Meili clean energy installations or retrofits for homes, farms, businesses, industry, municipalities and reserves. After an initial assessment to determine the lowest-cost and highest-return option for a given property or organization, some of all of the cost of the installation would be covered by the fund, and would be paid back over time from the customer’s power or energy bills based on the value of the power generated or fossil fuel energy saved by the installation. “Investment in renewable energy or retrofits of inefficient buildings pay for themselves in the money saved on heat or power,” Meili said. “People want to make the shift to clean energy, but the up-front cost

stops them, even though it would save a lot of money over the long term. This plan would remove the barriers that currently prevent people taking action on climate change.” Investments from the fund are not tied to any particular technology. The specific work would be based on individual consultation to find the best fit for the property or organization, but would consider solar, wind, geothermal, biomass, hydroelectricity, electric vehicles, energy efficient retrofits and new buildings. Qualification for the program would be based on an assessment to determine projected savings and payback time. Excess power produced by renewables would be fed back into the grid (net metering) with power produced over the end users consumption to be purchased by SaskPower. The cost of the technology and installation would be repaid through an assessment on the property’s power or energy bill that would not exceed the amount saved through usage reductions or net metering. It would use a revolv-

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ing fund model: as the fund replenished by payback, the next generation of projects would be funded. In his speech, Meili said, “Renew Saskatchewan will create thousands of local jobs in manufacturing, installation, retrofitting and maintenance. It will drop your power bills right away, and in a few years get them down to almost nothing. It will create revenue opportunities for farmers, homeowners, small towns and reserves through a new approach to net metering that will allow producers

to sell extra electricity back to the grid. It will increase Saskatchewan’s supply of clean electrical power and significantly reduce our use of energy and our carbon emissions. “And, and this is perhaps the most exciting part, as the loans are repaid the money can be re-used, a revolving fund, for the next phase and the phase after that,” Meili said. Premier Scott Moe, in an interview in Estevan later the same day, reacted by saying, “It’s really an idea as opposed to a policy. It’s a

feed-in tariff, with respect to trying to finance that over the longer term. “The fact of the matter is there’s already incentives with respect to smallscale producers that was enhanced by an announcement the other day by Minister (Dustin) Duncan the other day. The idea they’ve come forward with is really nothing more than a climate Ponzi scheme, to be honest. Now we have a federal carbon tax shell game and a provincial opposition Ponzi scheme released here today.”

Saskatchewan's sustainable oil Ż 3DJH $ market. “Saskatchewan most certainly can be part of not only producing a competitively priced product, a quality product, but a very, very sustainable product. This is message that we brought when we visited China most recently, the U.S. three times, and we’ll be bringing to India shortly. Saskatchewan has a great story to tell, not only from the product we generate

here, whether its energy, agriculture and potash, but also from a sustainability perspective and a global climate change perspective,” he said. Asked what the impact will be on upcoming budget discussions, he said, “You’re going to see a balanced budget in the province of Saskatchewan this next spring. That’s been our commitment. It was a three-year plan to balance, and we remain on track to

achieve that plan to balance. If we were able to close the oil differential, and, I think, if we were able to approve all the pipelines that we have, I don’t know if that would close the oil differential by the time we deliver our budget next spring. But it would greatly enhance the finances of the Saskatchewan government and the Saskatchewan economy for years into the future. So we will release a balanced budget next spring.”


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PIPELINE NEWS November 2018

Secure completes Kerrobert light pipeline system Kerrobert, Calgary – Growing oil production Viking area around Kindersley had led to a new pipeline for Secure Energy Services Inc. On Oct. 9 Secure Energy Services Inc. announced the light oil feeder pipeline system and receipt terminal in the KindersleyKerrobert region of Saskatchewan was completed on time and on budget and began commercial operations on Oct. 1. Secure commenced construction of the Kerrobert Light Pipeline System in September of 2017 as part of the corporation’s growth strategy to continually expand its midstream infrastructure by adding long-term contracted transportation and commercial related services in support of value creation for customers. “The commissioning of the Kerrobert Light Pipeline System is an incredible milestone for Secure,” said Rene Amirault, chairman of the board, president and chief executive officer. “We’re pleased to see the

successful execution of a project of this magnitude from the planning phase to final completion and are excited for the continued growth and development of the corporation’s midstream business. It is another example of how we strive to help our customers.” The company said the Kerrobert Light Pipeline System provides a capital efficient transportation solution for Secure’s customers operating in the region and has operational flexibility to accommodate production growth. The project was completed on time and on budget due to the dedication of Secure employees and contractors involved throughout all phases of the project, and the strong cooperation of various project stakeholders, including the local community, regulators and government agencies. Secure said the Kerrobert Light Pipeline System was designed and constructed using the highest level of environmental standards and is an exemplary model of Se-

cure’s commitment to safe and sustainable operations. Allen Gransch, executive vice president, corporate development, explained to Pipeline News on Oct. 11, “With all the drilling and production coming out of the Viking, there was definitely a need for additional pipe capacity.” “This line is a 10-inch line. Its capacity is up to 80,000 barrels per day.” He noted they have two “anchor tenants” in the area. The pipeline connects their Kindersley Full Service Terminal to Enbridge’s Kerrobert terminal, joining the Enbridge mainline at that point. The Kindersley facility takes emulsion and treats it to meet pipeline specification, getting clean oil sent to the mainline and disposing of produced water down a disposal well. The facility had primarily received its emulsion by truck, but it now also has some pipe running into it, in addition to ongoing trucking. The Kindersley facility

Secure Energy has competed its new Kerrobert terminal, allowing Kindersley-area oil to be transported by its new pipeline to the Enbridge mainline. Photo courtesy Secure Energy had been pipe-connected to Kerrobert with a different company’s pipeline. Gransch said the majority of the oil handled with this project is light oil. “It’s primarily Viking,” he added. He noted there was a need for additional capacity in the area, as production volumes have continued to grow, even during the downturn. “They were still getting fairly good returns, and so, what you saw in Saskatch-

ewan and Alberta was producers looking at where was their best returns in these plays, and they continued to drill,” he said. “It’s a great project for Saskatchewan, for sure,” Gransch added. Two phases The project was done in two phases, the first being the pipeline. The gathering pipeline system is an eightinch diameter line stretching approximately 10 kilome-

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A9

DĂLJĂŜ ĆŒĹ˝Ä‚ÄšĆ?Í• Ĺ?ĹśĆšÄžĆŒĆ?ƚĂƚĞ ĹšĹ?Ĺ?ĹšÇ Ä‚Ç‡Ć?Í• ƚŚĞ /ĹśĆšÄžĆŒĹśÄžĆš ĂŜĚ ƉĹ?ƉĞůĹ?ŜĞĆ? Ä‚ĆŒÄ? ĹśÄžĆšÇ Ĺ˝ĆŒĹŹĆ? ƚŚĂƚ Ä?ŽŜŜÄžÄ?Ćš ƉĞŽƉůĞ By Brian Zinchuk Regina – “Networks connect people.â€? So said Ryan Champney, director of facilities and terminals with Enbridge, used examples from history of how various networks have built civilizations. From Mayan roadways 2,000 years before Christ, to Roman aqueducts, then the U.S. Highways Act that led to the Interstate Highway System have all been key. The internet got its start in 1965. In 2007 Google Streetview was launched. In 2010, it was Instragram. Pipelines are another one of those networks. Chamney was speak-

ing at the 4th Annual Association Oil Supply Chain Forum in Regina, hosted by Saskatchewan Industrial & Mining Suppliers Association. “Who is Enbridge? We exist to help fuel people’s quality of life. We’re a transport company. We’re an energy company, in other regards. We bring that energy to people’s homes, whether its heating your home, providing fuel for your vehicle, or a method of transportation, or some form of electricity, we’re involved in one way, shape or form,� he said. In 1948, oil was found in Leduc, Alberta, and Regina had a refinery, so the

original line was proposed. It quickly morphed into a line that ran to Superior, Wisconsin. There are now six pipes in the mainline system. Going back to his historical example, Champney noted, “If you look at Enbridge, we are a massive network of pipelines. We can transfer energy products across North America. We cover most of the provinces in Canada and a good number of the states. “If you look at the pipeline map of all of North America, you can’t even see North America. It’s all full of pipes. Line 3 was built in

Ryan Champney, ÄšĹ?ĆŒÄžÄ?ĆšĹ˝ĆŒ ŽĨ ĨÄ‚Ä?Ĺ?ĹŻĹ?Ć&#x;ÄžĆ? ĂŜĚ ĆšÄžĆŒĹľĹ?ŜĂůĆ? Ç Ĺ?ƚŚ ĹśÄ?ĆŒĹ?ÄšĹ?Ğ͕ Ć?ƉŽŏÄž ŽĨ ĹšĹ˝Ç ĹśÄžĆšÇ Ĺ˝ĆŒĹŹĆ? Ä?ŽŜŜÄžÄ?Ćš ƉĞŽƉůĞ͕ Ĺ?Ĺ˝Ĺ?ĹśĹ? Ä?Ä‚Ä?ĹŹ ƚŽ Ä‚ĹśÄ?Ĺ?ĞŜƚ ĚĂLJĆ?͘ WŚŽƚŽ Ä?LJ ĆŒĹ?Ä‚Ĺś Ĺ?ĹśÄ?Ĺšƾŏ 1964 with a polyethylene tape coating. “We had some problems with that,â€? Champney said. The justification to replace the line

is based on safety. It will also bring the line back to its original capacity, as it has been operating at reduced pressure and rough-

ly half its capacity for several years. “It’s a big project,â€? he said. Ĺš 3DJH $

'ĆŒĹ˝Ç Ĺ?ĹśĹ? Ć‰ĆŒĹ˝ÄšĆľÄ?Ć&#x;ŽŜ Ĺ?Ĺś ƚŚĞ <Ĺ?ĹśÄšÄžĆŒĆ?ůĞLJ Ä‚ĆŒÄžÄ‚ ůĞĚ ƚŽ ƉĹ?ƉĞůĹ?ŜĞ Ć‰ĆŒŽŊÄžÄ?Ćš Ĺť 3DJH $ a new terminal constructed southeast of Kerrobert which includes all infrastructure required for connection onto the Enbridge mainline. Construction of a 10-inch diameter pipeline stretching 27 kilometres began by mid-October 2017. This pipeline initiated at a pump station constructed adjacent to Secure’s existing Kindersley Full Service Terminal and terminates at the new Secure

Kerrobert Terminal. As part of the corporation’s long-term growth strategy, Secure is expanding its midstream infrastructure by adding transportation and commercial related opportunities in an effort to provide additional services to its customers. The project supports its customers with ongoing operations in the Kindersley area of Saskatchewan. In announcing the project in September 2017, Secure said it was pursuing the

development of this greenfield project as a strategic partnership with key Viking light oil producers. Connection to the Enbridge mainline at Kerrobert as the downstream carrier will provide shippers access to eastern Canada and export markets. The company said the project was a direct result of its customer focused approach of providing value-added services. The initial announcement noted the feeder pipeline project included area dedica-

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PIPELINE NEWS November 2018

KŶ KĐƚ͘ ϯ ƚŚĞ ƟĞͲŝŶ ĐƌĞǁ ĞdžĐĂǀĂƚŽƌ ǁĂƐ ƉƌĞƉĂƌŝŶŐ ƚŚŝƐ ďĞůůŚŽůĞ ďĞĨŽƌĞ ƚŚĞ ĂĚũŽŝŶŝŶŐ ƐĞĐƟŽŶ ŽĨ ƉŝƉĞ ǁĂƐ ďƌŽƵŐŚƚ ŝŶ ƚŽ ĐŽŶŶĞĐƚ ƚŚĞ ůŝŶĞ ƉŝƉĞ ƚŽ ƚŚĞ ƌŽĂĚ ďŽƌĞ ƵŶĚĞƌ ,ŝŐŚǁĂLJ ϲ͕ ƐŽƵƚŚ ŽĨ ZĞŐŝŶĂ͘ /Ŷ ƚŚŝƐ ƐŝƚƵĂƟŽŶ͕ ƚŚĞ ŽŝůĞƌ͕ ŝŶ LJĞůůŽǁ͕ ǁĂƐ ĚŝƌĞĐƟŶŐ ƚŚĞ ŽƉĞƌĂƚŽƌ ƚŽ ƵƐĞ Ă ͞ƐƉŽŽŶ͕͟ Ă ŇĂƚ ĂƩĂĐŚŵĞŶƚ ƉŽƐŝƟŽŶĞĚ ŝŶ ƚŚĞ ŽƉƉŽƐŝƚĞ ŵĂŶŶĞƌ ƚŽ ŚŽǁ Ă ďƵĐŬĞƚ ŝƐ ƵƐƵĂůůLJ ĂƩĂĐŚĞĚ͘ /ƚ ĂůůŽǁƐ ƚŚĞ ŽƉĞƌĂƚŽƌ ƚŽ ŐĞƚ ŝŶ ǀĞƌLJ ƟŐŚƚ ƐƉŽƚƐ͘ ŶďƌŝĚŐĞ͛Ɛ >ŝŶĞ ϯ ZĞƉůĂĐĞŵĞŶƚ ǁĂƐ ŽŶĞ ŽĨ ƚŚĞ ƚŽƉŝĐƐ Ăƚ ƚŚĞ ^ĂƐŬĂƚĐŚĞǁĂŶ /ŶĚƵƐƚƌŝĂů Θ DŝŶŝŶŐ ^ƵƉƉůŝĞƌƐ ƐƐŽĐŝĂƟŽŶ Kŝů ^ƵƉƉůLJ ŚĂŝŶ &ŽƌƵŵ ŽŶ KĐƚ͘ ϰ͘ WŚŽƚŽ ďLJ ƌŝĂŶ ŝŶĐŚƵŬ

How to start doing business with Enbridge Ż 3DJH $ There are nine different spreads in Canada. Three were done in 2017, accounting for about 400 kilometres of pipe. The other spreads are underway now, with approximately 600 kilometres of pipe under construction. The Canadian side saw abut $5 billion in spending. Some of the pipe came out of Camrose, most of it came out of Regina. “The goal for us is to make sure, when we walk away, we leave it as good as we can, from an environmental standpoint. We don’t take that lightly,” Champney said.

To date, 52 inspections had been conducted by the National Energy Board on the project. At the Hardisty terminal, three tanks had been completed in September. There are 18 pumping stations on the line. Some are new, others are at existing facilities. Doing business with Enbridge Barry Horon, director of supply chain management with Enbridge, spoke about working with Enbridge. And there’s a lot of work to be done. In 2017, the company spent over $11 billion

with about 19,000 suppliers, the majority of which was in North America. Less than one per cent of its spending was offshore. “We want to work with companies that share our values of environmental stewardship,” Horon said. Enbridge purchased about 133,000 tonnes of steel pipe in 2017, of which 87 per was made of recycled steel. Enbridge spent $216.8 million with Indigenous contractors in 2017. That’s up significantly from $38 million spent with Indigenous business on the Alberta Clipper project 10 years ago, and

much higher than the $50 million they were aiming for on this project. “This time, about a year ago, we had about 360 Indigenous businesses in our database. Since then, as the project has moved over and created new opportunities, we’ve doubled that number. We’re now at 760 companies in the database.” More than 600 Indigenous workers were on the project across Manitoba and Saskatchewan. For companies to find work with Enbridge, Horon said the first step is to register online. Prequalifica-

tion requires incorporation documents and insurance requirements. There needs to be proof of good standing with the applicable Workers Compensation Board. In a lot of cases the company must be registered with ISNetworld, especially for any fieldwork that is considered “at risk.” “There needs to be an identified business need,” he said. A new technology is an example of a business need. Enbridge already has a large existing supplier list, he noted. Some companies come and go, and they want to ensure they have competitive vendors.

Horon stressed the need to have a robust quality management system. After all this pre-qualification, and supplier can then be “onboarded.” There is now also a process for “offboarding” for companies that no longer do business with Enbridge, so that their vendor list remains current. Even being onboard and approved does not guarantee business. Horon suggested looking up Enbridge’s “Growth Projects” portion of their website to get up to speed about that the company is doing.

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PIPELINE NEWS November 2018

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Petroleum Technology Research Centre celebrates 20 years By Brian Zinchuk Regina – As the story goes, twenty years ago, thenSaskatchewan Minister of Energy and Mines Eldon Lautermilch and Ralph Goodale, who was then federal Minister of Natural Resources, were having a smoke in Kirghizstan. Over cigarettes, they decided on the need to push for petroleum research in Saskatchewan. “This landed squarely on my desk,” recalled Dr. Malcolm Wilson back in 2009, then director of the Office of Energy and Environment at the University of Regina. He recalled being told, “Malcolm, create a petroleum research facility.” Thus begat the Petroleum Technology Research Centre (PTRC), a not-forprofit research company located in a dedicated building at Innovation Place in Regina, beside the university. “From nothing in 1998, by 2002 the University of Regina had the largest petroleum engineering program in Canada,” Wilson said in 2009. The creation of that program was largely because of funding provided through the PTRC and its public and private sector partners.

In later years (2011 to 2013) Wilson would head up the PTRC, the organization whose purpose is to help figure out how to get as much of Saskatchewan’s oil out of ground as possible, with a particular focus on our billions of barrels of heavy oil. The PTRC celebrates its 20th year in operation this November, and in September invited Wilson, along with past CEOs, researchers and industry leaders, to a one-day conference at Government House in Saskatchewan to recount successes and talk about the future. Most of the PTRC’s work has focused on heavy oil, but the use of carbon dioxide for enhanced oil recovery (EOR) became a key area of research when the Weyburn oil field in Southern Saskatchewan began to inject it in 2000, and the resulting Weyburn-Midale Project garnered strong industry interest. Wilson, who was one of the scientists responsible for the first report from the Intergovernmental Panel on Climate Change (IPCC), knew that the utilization of CO2 for oil recovery was a win-win for Saskatchewan.

The IPCC shared the 2007 Nobel Peace Prize with former Vice President Al Gore. In more recent years, under the direction of new CEO Dan MacLean, the PTRC has turned some of its attention to light oil, particularly the hard-to-access deposits in the Bakken and Viking formations in southern Saskatchewan. Over the years, the PTRC has been involved in several major research initiatives. JIVE “JIVE was a very big success for us,” said Norm Sacuta on Oct. 12. He has handled the PTRC’s communications for over a decade. JIVE, Sacuta explained, stood for Joint Implementation of Vapour Extraction. “It was started about 2005. Over the course of the project, there were four field trials, injecting different kinds of gas (solvent) vapour into heavy oil fields.” That included propane, methane, butane and CO2. The field trials included Nexen, Husky and Canadian Natural Resources Limited. “Different trials had different levels of success. The main obstacle in those field trials that limited ad-

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vancement for some of those companies to move to full-scale demonstration, was not being able to get back the solvent during oil production. With propane, butane and methane, you’ve got to get the solvent back in a decent amount that oil recovery doesn’t become too expensive. “Husky’s field trials were the most successful, which is why they went on and did industrial-scale projects involving solvents and CO2.Those were direct results (the decision to go forward) based, in part, on the results of JIVE.” Husky went on to continue to develop CO2 usage in enhanced oil recovery. As part of the JIVE project, a substantial threedimensional model that looks like a giant R2-D2 was developed at the Saskatchewan Research Council to model the underground reservoirs at different pressures and depths. It’s still in use in the PTRC building. Another solvent project was worked on with Statoil on the Alberta/Saskatchewan border, to reduce CO2 emissions in oilsands operations. It was eventually turned completely over to Statoil.

dŚĞ ƋƵŝƐƚŽƌĞ ƉƌŽũĞĐƚ͕ ǁŚŝĐŚ ŝŶǀŽůǀĞƐ ŝŶũĞĐƟŶŐ ĐĂƌďŽŶ ĚŝŽdžŝĚĞ ĐĂƉƚƵƌĞĚ ĨƌŽŵ ^ĂƐŬWŽǁĞƌ͛Ɛ ŽƵŶĚĂƌLJ Ăŵ WŽǁĞƌ ^ƚĂƟŽŶ ŝŶƚŽ Ă ĚĞĞƉ ƐĂůŝŶĞ ĂƋƵŝĨĞƌ͕ ŝƐ ĂŶ ŽŶŐŽŝŶŐ ŵĂũŽƌ ƉƌŽũĞĐƚ ĨŽƌ ƚŚĞ WĞƚƌŽůĞƵŵ dĞĐŚŶŽůŽŐLJ ZĞƐĞĂƌĐŚ ĞŶƚƌĞ ŽǀĞƌ ƚŚĞ ůĂƐƚ ϳ LJĞĂƌƐ͘ ,ĞƌĞ ĮďƌĞ ŽƉƟĐ ƐĞŶƐŽƌƐ ǁĞƌĞ ĂƉƉůŝĞĚ ƚŽ ƚŚĞ ĐĂƐŝŶŐ ŽŶ ŽŶĞ ŽĨ ƚŚĞ ǁĞůůƐ͘ &ŝůĞ photo Weyburn-Midale Very shortly after the PTRC got going, PanCanadian and Apache got going with their enhanced oil recovery carbon dioxide miscible floods at their respective Weyburn and Midale units. Perhaps one of the most visible projects PTRC has been involved with was the International Energy Agency Greenhouse Gas (IEAGHG) Weyburn-Midale CO2 Monitoring and Storage Project. It was considered the world’s largest natural laboratory, covering an area 200 kilometres wide, 200 kilometres long and 4

kilometres deep, encompassing much of southeast Saskatchewan. It’s been dubbed the largest CO2 sequestration project in the world, and acted as a test bed to hone skills in geologic storage. There were four technical themes to the project. Site characterization developed a model for the selection of suitable CO2 geological storage sites. Wellbore integrity looked at increasing the knowledge and assessment of risk associated with leakage from abandoned wells caused by material and cement degradation. Ź 3DJH $

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PIPELINE NEWS November 2018

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PIPELINE NEWS November 2018

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JIVE project led to further CO2Ͳ KZ ŝŵƉůĞŵĞŶƚĂƟŽŶ ďLJ ,ƵƐŬLJ

Ż 3DJH $ Monitoring and verification looked at assessing techniques to quantify CO2 volume and distribution. Finally, performance assessment involved a reliable, integrated simulation model to predict long term storage accurately, and to develop reliable probabilistic methods of predicting leakage from storage sites. Weyburn was not about oil production for the PTRC. When PanCanadian began planning the carbon dioxide flood, it was a unique opportunity to do observations at a commercial level. Eventually the Weyburn field was bought by EnCana, and they agreed to the research side of the project. Cenovus split from EnCana in 2009. Apache Canada came onstream with the project in 2005, adding the Midale field to the mix. The research is wrapped up now, and Whitecap Resources now has the operating stake in the Weyburn Unit, while Cardinal Energy Ltd. is the operator of the Midale Unit. PTRC has made itself available to both operators should questions arise about the research that was conducted. PTRC provided infor-

mation during the project, both to the public and to policy makers, on CO2 sequestration. Its information was meant to be used in capand-trade policy decisions, regulatory advice for wellbore completions, and the like. In the end, the PTRC quite literally wrote the book about geological storage. Aquistore Another major project for the PTRC is the Aquistore project, part of the Boundary Dam Unit 3 Integrated Carbon Capture and Storage Project. Initially the plan was conceived in partnership with the Regina Co-op Refinery. The original plan was a project to capture a portion of the refinery’s carbon dioxide emissions and pump them into a nearby deep saline aquifer. However, the project evolved to become part of the Boundary Dam initiative when it became clear the CO2 source would be coming from there. The $26 million Aquistore project involved drilling the two deepest wells in the province, two kilometres west of the Boundary Dam Power Station and carbon capture unit. One well acts as an injection well, the second as an observation well. The wells themselves are

highly instrumented, as is the surrounding area, with various kinds of measurement and monitoring technologies (31 in total). This included the installation and periodic usage of a permanent seismic array around the Aquistore site, allowing for 4D seismic monitoring – three physical dimensions, and the fourth dimension

It looks like an oversized R2-D2, but inside is a 3D model of a heavy oil reservoir. The Solvent sĂƉŽƵƌ džƚƌĂĐƟŽŶ Laboratory at the Saskatchewan Research Council’s Energy Division Ăƚ /ŶŶŽǀĂƟŽŶ WůĂĐĞ ŝŶ ZĞŐŝŶĂ ŽīĞƌƐ ŝŶƐŝŐŚƚƐ ŝŶƚŽ the behaviour of heavy oils when using solvent-based enhanced oil recovery. File photo

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being time –tracking the progress of the carbon dioxide just under 3,400 metres underground. SaskPower now owns and operates the wells, but PTRC continues to conduct the research project, providing data and modeling to SaskPower and to some 7 project partners. Networks of Centres of Excellence Starting in 2009, the PTRC was able to get $10 million in funding over four years from the Government of Canada through the Networks of Centres of Excel-

lence program to do research at the lab level, and in the field, to look at enhanced oil recovery technologies that would have a direct impact on improving environmental impacts. The program set up by the PTRC was called STEPS (Sustainable Technologies for Energy Production Systems). STEPS was a businessled network of centres of excellence. Of 40 applicants to the Federal government’s NCE secretariat, ten went onto final proposals, and only four, including PTRC,

were chosen to receive funds Some of the projects in the STEPS program were tied to early stage development in the Saskatchewan oilsands. This included looking at electrical heating for oilsands. “It didn’t really go anywhere because of significant challenges with a lack of caprock above our oilsands. And Oilsands Quest eventually stopped operating. When prices tanked, that was it for Oilsands Quest,” Sacuta said. Ź 3DJH $

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PIPELINE NEWS November 2018

&ƌŽŵ ǀĂƉŽƵƌ ĞdžƚƌĂĐƟŽŶ ƚŽ K2͕ ŚĞĂǀLJ ƚŽ ůŝŐŚƚ ĂŶĚ ƟŐŚƚ Žŝů Ż 3DJH $ U of R CO2 initiatives For a time, the University of Regina had a suite of organizations involved with carbon dioxide, quarterbacked by Office of Energy and Environment. One focused on capturing CO2 on a commercial scale, another on putting it in the ground and making sure it stayed there, and the third on developing standards to make sure these efforts

were recognized. The International Test Centre (ITC), which worked on coming up with their own carbon dioxide capture technologies. Their method ultimately was not chosen for the Boundary Dam project. Then there was the International Performance Assessment Centre for the Geologic Storage of Carbon Dioxide, or IPACCO2, which focused on coming up with standards

for the capture and storage of carbon dioxide. The PTRC’s involvement, especially with the Weyburn-Midale project, brought things full circle, working on the research of geologic storage and enhanced oil recovery. IPAC-CO2 was shut down in 2013. ITC has been re-organized into Clean Energy Technology Research Institute (CETRi). Sacuta said, “We

tended to be more of a funder for those research areas – never capture. We were not interested in capture. We did tend to fund, at the U of R, CO2-EOR research. That involved both heavy oil, where CO2 had not yet been injected.” Future Light and tight oil is getting more attention from the PTRC now as it enters its third decade in operation. “We just bought, for use by the SRC

and the university, a high resolution CT (computerized tomography) scanner. We got Western Diversification funding for that this past year,” Sacuta said. “They’re going to be using that as part of this tight-oil research.” Dan MacLean, president and CEO of the PTRC, was in Kuwait on PTRC business during the time of this interview. Regarding the future of the organization, he said

by email, “We are proud of what PTRC has accomplished in its twenty years, and more importantly where we are headed. It’s the company’s goal to realize 5 billion additional barrels of reserves in the next five years by developing technologies that will help turn that stranded Saskatchewan oil into recoverable assets. And we plan to do that in the most energy efficient means possible.”

ĞĐŽŵŝŶŐ Ă ǀĞŶĚŽƌ ĐĂŶ ďĞ ĐŚĂůůĞŶŐŝŶŐ͕ ďƵƚ ƚŚĞƐĞ ĐŽŵƉĂŶŝĞƐ ĂƌĞ ƐƉĞŶĚŝŶŐ ďŝŐ ŵŽŶĞLJ ŝŶ ƚŚĞ ƉĂƚĐŚ 4TH ANNUAL SASKATCHEWAN OIL & GAS SUPPLY CHAIN FORUM By Brian Zinchuk Regina – For a conference whose purpose is to directly connect buyers and sellers, the 4th Annual Saskatchewan Oil & Gas Supply Chain Forum had a room full of eager participants who got their chance for some real oneon-one time. That was evident when it came to the speed networking session, which saw procurement staff from several of the largest companies in the Saskatchewan oilpatch pres-

ent. Each participant had five minutes to make their pitch or ask questions before the organizers said it was time to move on. The lines at several booths were long with interested companies. The speed networking event was the culmination of several presentations by those large companies as well as trade show time. The general message from the speakers was “How do you do business with us? Here’s how.” While several de-

scribed somewhat arduous processes to become an approved vendor, with no promise there would be work at the end, the carrot was the fact these companies were each spending hundreds of millions of dollars per year, even billions, and they need vendors to spend that money with. While last year’s event saw most of the presentations come from Saskatchewan’s larger oil companies, this time the two big pipeline companies fea-

tured prominently as did Federated Co-op. It was the first time the refinery had been represented on stage. The presentations included Federated Cooperatives Limited, TransCanada, Enbridge and Schlumberger. The keynote speaker was Dean La Riviere, regional director, Western Canada for Cisco. His presentation focused on digital disruption. “We used to talk about 10-year life cycles. Now we’re talking months,” La Riviere

Minister of Energy and Resources Bronwyn Eyre ƉƌŽǀŝĚĞĚ ŐƌĞĞƟŶŐƐ ĨƌŽŵ ƚŚĞ 'ŽǀĞƌŶŵĞŶƚ ŽĨ ^ĂƐŬĂƚĐŚĞǁĂŶ͘ said. “This is a massive market transition we’re talking about.”

Schlumberger Canada Limited president Ź 3DJH $


PIPELINE NEWS November 2018

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Five minutes one-on-one with large companies Ż 3DJH $ Celine B. Gerson also spoke. There were presentations by the Petroleum Services Association of Canada (PSAC) and Stantec. Stantec spoke about Saskatchewan’s climate change strategy. “I think it went well. It went very well,” said Eric Anderson of the Saskatchewan Industrial & Mining Suppliers As-

Schlumberger Canada president Celine Gerson spoke about how to work with the ůĂƌŐĞƐƚ ŽŝůĮĞůĚ ƐĞƌǀŝĐĞƐ company in the world.

sociation Inc., the organizing group behind the event. The Government of Saskatchewan was also a part of it, and Minister of Energy and Resources, Bronwyn Eyre provided greetings and some opening remarks. “The procurement people were open to discussions and helping. The members and supply chain people had lots of good questions and wanted to know how to help them. Two groups working to-

gether, and it was a success,” Anderson said. “We’ve got great presentations, from owners, what they want, how they do businesses, what they need, where they think the world’s going, to the best of their abilities. And they stick around for a conversation with the supply chain to explain how to work with us, here’s what we need, here’s what we don’t need,” he said. A total of 280 attended.

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While the tradeshow was about twice as big as last year, Anderson noted, “That’s about as far as we’ll go. We don’t want to have a trade show that’s so big that there’s no time to go through all of it.” Indeed, the event had something of an intimate quality to it. The speed networking session was well taken advantage of, yet there was still enough time that participants could have spoken to each major company they were interested in. With the Keystone XL pipeline gearing up for next year, TransCanada’s group saw the longest lines, yet no one walked away without an opportunity to get their five minutes in. This was due in part to a change in the scheduling, moving the speed networking to the end of the day, and

dŚĞ ƚƌĂĚĞ ƐŚŽǁ ǁĂƐ ƐŵĂůů͕ ďƵƚ ŝƚ ǁĂƐ ƐƟůů ƚǁŝĐĞ ƚŚĞ ƐŝnjĞ ĂƐ ůĂƐƚ LJĞĂƌ͛Ɛ͘ &ƌŽŵ ůĞŌ ĂƌĞ Mike Hannan and Steve Voysey ŽĨ WĂƌŬůĂŶĚ &ƵĞů ŽƌƉŽƌĂƟŽŶ͕ ƐƉĞĂŬŝŶŐ ƚŽ Doug Schmaltz and Susan Shaw ŽĨ ' d >ĂďŽƌĂƚŽƌŝĞƐ͘ effectively leaving it openended. Everyone was wrapped before the scheduled end, and yet they still got their time. A common thread through many of the presentations was prospective vendors need to start at the larger company’s website and go through the vendor portal process. Safety records and certifi-

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PIPELINE NEWS November 2018

,Ä‚ĆŒĆŒĹ?Ć? KĹ?ůĎĞůĚ ŽŜĆ?ĆšĆŒĆľÄ?Ć&#x;ŽŜ ĹšŽůÄšĆ? Ä‚Ĺś Ä‚ĆľÄ?Ć&#x;ŽŜÍ• ĂŜĚ ÄŽĆŤĹśĹ?ůLJ Ć?Ĺ˝ By Brian Zinchuk Estevan – Sept. 25 marked the big auction for Harris Oilfield Construction Ltd., and it was a fitting end for the family owned-and-operated busi-

ness. That’s because Doug Harris, the patriarch of the operation, was an enormous fan of auctions throughout his life. He passed away Jan. 7 at the

age of 74. “He loved them. Auctions were his passions, and that’s why I had an auction,� said Bertha Harris, Doug’s widow, at their shop the day after the auction. “It seemed that was the right thing to do – have an auction,� she said. Bertha recalls frequently going to auctions and kicking the tires with him. “And I would bring them home,� said daughter Janice, who ran the operation for the last 17 years. Sister Jody Harris stopped in that morning to give her sister a hug before leaving for Lethbridge. “He was very proud,� she said of her father, Doug.

Janine Waldner Ç Ä‚ĆšÄ?ŚĞĆ? ƚŚĞ Ć?Ä‚ĹŻÄž ŽĨ ĹšÄžĆŒ Ć‰Ä‚ĆŒÄžĹśĆšĆ?Í› Ä?ĆľĆ?Ĺ?ŜĞĆ?Ć?Í• ,Ä‚ĆŒĆŒĹ?Ć? KĹ?ůĎĞůĚ ŽŜĆ?ĆšĆŒĆľÄ?Ć&#x;ŽŜ >ĆšÄšÍ˜

dŚĞ ,Ä‚ĆŒĆŒĹ?Ć? KĹ?ůĎĞůĚ ŽŜĆ?ĆšĆŒĆľÄ?Ć&#x;ŽŜ >ĆšÄšÍ˜ Ä‚ĆľÄ?Ć&#x;ŽŜ Ä‚ĆŠĆŒÄ‚Ä?ƚĞĚ žŽĆŒÄž ƚŚĂŜ ώϹϏ ƉĞŽƉůĞ ŽŜĆ?Ĺ?ƚĞ͕ Ä?ƾƚ Ĺ˝Ç€ÄžĆŒ ĎŽĎŹÍ•ĎŹĎŹĎŹ ŽŜůĹ?ĹśÄžÍ˜ WŚŽƚŽ Ä?LJ ĆŒĹ?Ä‚Ĺś Ĺ?ĹśÄ?Ĺšƾŏ “He didn’t put a sticker on a truck until he knew it could represent him. And Dad would never overcharge.â€? After Doug had passed away, Bertha said, “We didn’t want to do it

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anymore. The helmsman was gone. The commanderin-chief was gone.� Janice recalled a conversation she and Bertha had after her father passed away, where she asked her mother, “Why are you doing this? Just sell it?� Bertha had replied, “What are you going to do?� To which Janice said, “Don’t worry about me. I’ll figure it out.� The decision to have the auction was made in early summer, and they had two months to prepare for the sale. Opera-

tions stopped on Sept. 4. The company, which had peaked at 10 to 12 people during the boom years, was down to a handful of people. The company, which had been in operation for 39 years before Doug’s death, focused on vac, steamer and pressure trucks, as well as a lot of water hauling. Doug liked to have two of everything, so he always had a backup. Bertha recounted how Doug had a hankering for Western Star Trucks. One of the trucks sold Ś 3DJH $

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PIPELINE NEWS November 2018

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PIPELINE NEWS November 2018

KÇ€ÄžĆŒ ĎŽĎŹÍ•ĎŹĎŹĎŹ Ä¨Ĺ˝ĹŻĹŻĹ˝Ç ÄžÄš Ä‚ĆľÄ?Ć&#x;ŽŜ ŽŜůĹ?ŜĞ Ĺť 3DJH $ to Parker Schnabel, one of the stars of the TV reality

series Gold Rush. Bertha was quite happy with that, as Doug was a big fan of

Jody Harris, right, puts an arm around her mom, Bertha, who owned and operated the business with her late husband, Doug, for over 39 years.

the show and of Schnabel. And that was an indication of the interest in the sale. Ritchie Bros. Auctioneers conducted the sale. Auctioneer Jason LeBlanc noted how large the presence was online. Indeed, for most of the auction, at least 17,000 people were online, and when the trucks were up for sale, that number was over 20,000. Bertha said roughly 70 per cent of the auction sold locally, and 30

per cent sold online. She estimated over 250 people came in person. Janice noted the presence of Doug’s coffee row buddies. “I would like to thank the people that came out to support us – the community coming out and supporting us,� Bertha said. As for what they’ll do now, Bertha talked about going in different directions. The shop is up for sale or rent.

Janice Harris ĆŒÄ‚Ĺś ƚŚĞ ĨÄ‚ĹľĹ?ůLJ Ä?ĆľĆ?Ĺ?ŜĞĆ?Ć?Í• ,Ä‚ĆŒĆŒĹ?Ć? KĹ?ůĎĞůĚ͕ ĨŽĆŒ 17 years. The passing of her father, Doug, lead to the sale on Sept. 25.

Federated Co-op is involved in all levels of the petroleum business, upstream to downstream By Brian Zinchuk Regina – Federated Co-operatives Limited celebrated its 90th anniversary in October, and a very large portion of the business is its energy division.

At the Saskatchewan Oil and Gas Supply Chain Forum in Regina on Oct. 4, Cal Fichter, vice president, energy with Federated Coop, spoke with attendees about how to do business

with the Co-op. There are 180 retail co-ops in Western Canada, and they, in turn, own Federated Co-op, which is there to act as a wholesaler to retail co-operatives.

Fichter said, “We are a manufacturer of petroleum products.â€? They act as a wholesaler to hundreds of gas bars across the prairies, supplied Ĺš 3DJH $

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PIPELINE NEWS November 2018

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Co-op’s annual spend is about $320 million a year Ĺť 3DJH $ by the 130,000 bpd refinery complex in Regina. But the co-op also takes part in the upstream portion of the business. “We sell gasoline and diesel. We manufacture and distribute gasoline and diesel. We also produce crude oil. “We’re involved in all aspects of the energy petroleum business, right from the production and exploration of crude oil, refining, distribution and marketing,â€? he said. Upstream Co-op has 3,400 boepd of its own crude oil production. All their operated land is in Saskatchewan. Fichter noted 2018 has been a rebuilding year. They have a completely new management team in Calgary, and a field office in Carlyle.

The company operates 1,800 barrels per day of its own production, and with the remaining production being operated by other companies. The production has declined in recent years. He explained there was not a lot of investment planned for 2019. They had four wells planned, $5 million in waterflood work, $4 million in optimization, $2 million in maintenance and $1 million in reclamation. “In 2020 and beyond, you’re going to see more significant investment then you are going to see in 2019,� he said. Doing business with the Co-op As this was a conference about procurement, he addressed the rhetorical question, “How do you do business with us?� It starts with your Workers Compensa-

tion Board standing and safety certificates. Membership on ISNetworld is required. Preferred vendor criteria includes proximity to the worksite, quality of personnel and equipment, past performance, price, availability and the timeline. With regards to the refinery complex, he noted very little of Saskatchewan production goes through it. The refinery is on the Enbridge mainline. It produces gasoline, diesel, propane, lubricants, asphalt, petroleum coke and butane. There are 200 trucks dedicated to petroleum deliveries. Product is also shipped by rail to southern Alberta for distribution from that point. There are 1,020 employees at the refinery. Ĺš 3DJH $

/Ćš ƚĂŏĞĆ? Ć?ŽžÄž ÄžÄŤĹ˝ĆŒĆš ƚŽ Ĺ?Ğƚ Ä‚Ć‰Ć‰ĆŒĹ˝Ç€ÄžÄš Ä‚Ć? Ä‚ Ç€ÄžĹśÄšĹ˝ĆŒÍ• Ä?ƾƚ &ÄžÄšÄžĆŒÄ‚ĆšÄžÄš ŽͲŽĆ‰ Ć?ƉĞŜĚĆ? Ä‚Ä?ŽƾĆš ΨϯώϏ ĹľĹ?ĹŻĹŻĹ?ŽŜ Ä‚ Ç‡ÄžÄ‚ĆŒ Ĺ?Ĺś ƚŚĞ ÄžĹśÄžĆŒĹ?LJ Ć?ÄžÄ?ĆšĹ˝ĆŒÍ• Ĺ?ĹśÄ?ůƾĚĹ?ĹśĹ? Ä‚Ćš Ĺ?ĆšĆ? ZÄžĹ?Ĺ?ŜĂ ĆŒÄžÄŽĹśÄžĆŒÇ‡Í• Ć?Ĺ˝ ƚŚĞ Ć‰ĆŒĹ?njĞ žĂLJ Ä?Äž Ç Ĺ˝ĆŒĆšĹš Ĺ?ĆšÍ˜ &Ĺ?ĹŻÄž ƉŚŽƚŽ

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A20

PIPELINE NEWS November 2018

Planning for 2020 turnaround underway Ż 3DJH $ The refinery sees an annual maintenance turnaround, shutting down several units each year. It is always done in the springtime, before seeding. Bids for 2019 is already wrapped up and they are currently working on planning for the 2020 turnaround. In addition to the annual turnaround, there’s an ongoing need for several services. Among those used on a regular basis are vac, chem cleaning, sand-

blasting, road maintenance, groundwork, hazardous waste disposal, rail switching and track maintenance. Major upcoming projects include replacing a sulphur tank in 2019. A gas oil tank replacement is also in the works. A new pumping and blending control room is in the design phase. A coker revamp is on the agenda. It takes as much gasoline and diesel out as possible, and petroleum coke is the result.

“We’re just in the scoping phase,” Fichter said of that project. To prequalify for this sort of work, he said it starts with a vendor registration. ISNetworld is needed for service contracts. There needs to be an active agreement and performance statistics with the WCB. A certificate of insurance is important. From there, a company can be entered onto the approved vendor list. A master services purchase agreement is also

part of the process. “We have over 250 companies on our approved vendor list right now. After we go through that, you’re pre-qualified,” Fichter said. “Experience is an important factor for us,” he went on. A bidder list is developed. “We want to see a quality assurance program,” he added. And the prize for all this? An opportunity to take part in a $320 million annual spend by the Co-op.

Cal Fichter, vice president, energy with Federated Co-op, ƐƉŽŬĞ ǁŝƚŚ ĂƩĞŶĚĞĞƐ ƚŽ ƚŚĞ ^ĂƐŬĂƚĐŚĞǁĂŶ Kŝů ĂŶĚ 'ĂƐ ^ƵƉƉůLJ ŚĂŝŶ &ŽƌƵŵ ĂďŽƵƚ ŚŽǁ ƚŽ ĚŽ ďƵƐŝŶĞƐƐ ǁŝƚŚ ƚŚĞ ŽͲŽƉ͘ WŚŽƚŽ ďLJ ƌŝĂŶ ŝŶĐŚƵŬ