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REDVERS Oil Showcase MAY 30-31 Vermilion acquires Spartan
Enbridge talks Line 3 in Moosomin A7
Saskatchewan may cut off BC A12
“Diversity is the survival of business,” says Brian Dangstorp, left, owner of Dangstorp’s Services Ltd., a dirt moving company in Redvers. To that end, his other business venture is Redvers Agricultural and Supply Ltd., managed by his son Perry, right. See related story Page A10. Photo by Brian Zinchuk
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PIPELINE NEWS May 2018
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PIPELINE NEWS May 2018
Redvers Oil Showcase coming May 30-31 Redvers – The 2018 Redvers Oil Showcase is coming up May 30-31 at the Redvers exhibition grounds and Redvers Recreation Centre. The biennual event takes place every two years since 2008. The first show was in 2007. As of April 20, there were 84 of 97 indoor booths and all 37 outdoor booths sold, according to Matt Axten, president of the show committee. “I see us being full. Usually by the second week in May, we’re full.” “There’s a few new, and a few non-oilfield types we displaced,” Axten said of the exhibitors. “The big focus this year is on reinvention,” Axten said, adding there’s a new committee and new ideas. “We’ve really focused on distributing cash in the community. This time, we want to promote the brand.” The last showcase was held in the spring 2016,
when the price of oil had just come off plumbing the depths of sub-US$30 per barrel for WTI, layoffs were everywhere and optimism was hard to find. “It wasn’t good for anybody. The sentiment at the show wasn’t rosy,” Axten said. On top of that, it snowed and rained, which he said fit the sentiment. This year, as of April 22, oil was back to US$68, a price not seen since November, 2014, when the oil downturn really took hold. Things are picking up a bit, and there’s more optimism in the air. The banquet speaker on May 30 is Pipeline News editor Brian Zinchuk. Axten said, “We twisted Brian’s arm into doing it and he took us up on the offer. It will be a good fit, compared to the last speaker we had. He was good, but maybe didn’t fit the venue as well as we had hoped.” “We’ve had support from Pipeline News from
The Redvers Oil Showcase outdoor booths are already sold out. File photo Day 1. He’s very well informed about what’s going on, and he knows a lot about the new normal. There’s a lot of people in the industry who need to hear about the new normal,” Axten said. Zinchuk’s speech will also coincide with the 10th anniversary of Pipeline News in its current form. The speech is
entitled, “I didn’t see their horses.” Axten said the site saw a lot of gravel work last year. Pushing the show back several weeks should also help with the weather. “This show and this community should be on the map. We have to change the show and continue to go on, to get bigger and better.”
Attendance in 2016 came in at 1,500, and they are working for that level again. The committee is working on bringing in several daytime presenters as well, hoping to see presentations from the Ministry of Economy. MNP will be doing presentations on taxation changes for business owners and marijuana
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in the workplace. In the past, presentations on Enbridge’s Bakken Expansion pipeline and the Ministry of Economy (now Ministry of Energy and Resources) speaking on PNG 17 were quite successful. More information, including the schedule, can be found at www. redversoilshow.com.
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PIPELINE NEWS May 2018
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To submit a stories or ideas: Pipelines News is always looking for stories or ideas from our readers. To contribute please contact Brian Zinchuk at 306-461-5599. Subscribing to Pipeline News: Pipeline News is a free distribution newspaper, and is now available online at www.pipelinenews.ca Advertising in Pipeline News: Advertising in Pipeline News is a newer model created to make it as easy as possible for any business or individual. Pipeline News has a group of experienced staff working throughout Saskatchewan, Manitoba and parts of Alberta, so please contact the sales representative for your area to assist you with your advertising needs.
Published monthly by the Prairie Newspaper Group, a division of Glacier Ventures International Corporation, Central Office, Estevan, Saskatchewan. Advertising rates are available upon request and are subject to change without notice. Conditions of editorial and advertising content: Pipeline News attempts to be accurate, however, no guarantee is given or implied. Pipeline News reserves the right to revise or reject any or all editorial and advertising content as the newspapers’ principles see fit. Pipeline News will not be responsible for more than one incorrect insertion of an advertisement, and is not responsible for errors in advertisements except for the space occupied by such errors. Pipeline News will not be responsible for manuscripts, photographs, negatives and other material that may be submitted for possible publication. All of Pipeline News content is protected by Canadian Copyright laws. Reviews and similar mention of material in this newspaper is granted on the provision that Pipeline News receives credit. Otherwise, any reproduction without permission of the publisher is prohibited. Advertisers purchase space and circulation only. Rights to the advertisement produced by Pipeline News, including artwork, typography, and photos, etc., remain property of this newspaper. Advertisements or parts thereof may be not reproduced or assigned without the consent of the publisher. The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers.
A pipeline originating in B.C. wants to expand in Saskatchewan As the keys on this keyboard were about to begin pecking out this editorial, a press release came in from the Government of Saskatchewan. Our province would be backing Alberta, introducing similar legislation to allow us to cut off British Columbia from energy exports, should we so choose. The press release noted, “The bill responds to the inaction by the federal government to assert its jurisdictional authority to ensure the Trans Mountain Expansion Project proceeds.” It’s a pressure tactic against British Columbia, whose NDP government has vowed to “use every tool in the toolbox” to stop the Kinder Morgan Trans Mountain Expansion Project. The continued delay of export pipeline construction has diminished our own province’s revenue to the tune of over $200 million per year, due to oil price differentials. It’s a curious juxtaposition with another story going in this edition: the Alliance Pipeline is seeking to expand its capacity by 25 per cent. When that pipeline was built in 1999-2000, it was built with heavy-wall pipe from the outset. The pipeline was designed so that they could add additional compressor stations roughly halfway between each of its existing compressor stations, allowing the pipeline to boost its capacity without building any new pipe. It was a very smart move on Alliance’s part (owned 50/50 by Enbridge and Pembina Pipeline). Who could have foretold, two decades ago, that new pipeline construction would have become such a toxic issue today? They already own the land. They just need the approvals to go ahead. Since this planning would have obviously been in its initial application, it should be a slam dunk. They’re just doing what they said, 20 years ago, what they would eventually do. So why does Alliance need the additional capacity? It’s been running at full steam, fueled presumably by the explosion of natural gas production in northeastern British Columbia. The destination of the Alliance Pipeline is Chicago, in other words, an export market. Alliance’s website even refers to it as the “premium U.S. Midwest market.” Very curious, it seems. British Columbia petroleum production is seeking export to a foreign market, and that gas would flow through Alberta and Saskatchewan. There seems to be something familiar about that. Now what would happen if those two provinces, or even one, chose to use “every tool in the toolbox” to sty-
mie this project? What if municipalities got their knickers in a knot regarding municipal bylaws on the cutting down of trees? (Not that you’re going to find many trees near Rosetown, Chamberlain or Creelman, where the additional compressor stations are to be built.) Maybe Saskatchewan could require environmental assessments counting every blade of grass on those sites. There could be endangered burrowing gophers on each of these sites! What a travesty if a gopher were to be disturbed. We might have to tranquilize and relocate each and every one of them to gopher sanctuaries, built at the proponent’s expense and maintained in perpetuity. While we study gopher habitat, the province of British Columbia could cool its heels for years on end, with no end in sight, foregoing hundreds of millions of dollars in royalty revenues and billions of dollars in economic activity at their end of the pipe. Maybe, if they get desperate enough, the Government of British Columbia will feel it’s necessary to buy into the Alliance Pipeline, just to show how serious they are. Never mind that the construction of these three new compressor stations in Saskatchewan, plus work on the four existing ones, would result in hundreds of millions of dollars of work, plus additional, permanent jobs at those new stations. You see, British Columbia depends on Alberta and Saskatchewan to get its products to foreign markets just as we depend on them to host our West Coast ports and the rail, pipeline and road conduits to them. They need us, just like we need them. Some people might call it an “economic union,” but that’s so 19th century. As we try to strangle each other economically, no one gains. We will all suffer. What’s next? B.C. Wine? Wheat and potash? Forestry products? When will it end? Energy and Resources Minister Bronwyn Eyre told us, “We didn’t want to be here. We take being here very seriously.” Pressed on whether the province would use this legislation in terms of the Alliance Pipeline, she said, “I don’t want to get ahead of myself, nor does the government. “Obviously this could arise as an issue, but we don’t hope it comes to that.” Noting that our provincial interest is what drives this, including more than $200 million in royalties revenuest to the Western Canada Select/West Texas Intermediate differential, she added, “We don’t want to hurt anyone.” Got that, B.C.?
PIPELINE NEWS May 2018
The U of A should give doctorates to DiCaprio, Young, Obama and Trudeau In the midst of the greatest dispute between two provinces since the 1995 Quebec referendum, the University of Alberta stepped in it, big time. They announced on April 10 that Dr. David Suzuki, of The Nature of Things fame, was to be honoured with an honourary doctorate in science. Apparently the doctorate he already holds isn’t enough. He only holds honouary degrees from 25 universities already, so he obviously needs one more. In the current pipeline war environment, they would have been better off giving it to Justin Trudeau. He’s arguably more liked in Alberta than David Suzuki. At least a few people voted for him in Alberta. More on that later. David Suzuki is arguably the very symbol of the worst British Columbia hypocritical earth muffin anti-oil, anti-oilsands, anti-energy, anti-Alberta person there could pos-
sibly be. And they’re honouring him? At a time when a freaking NDP government is threatening to cut of B.C.’s oil and refined products and to bring the Lower Mainland to its knees? The incredulity of this entire prospect knows no bounds. Okay, fine. U of A, you’ve made your bed, now lie in it. Here’s what I think is going to happen, or what should happen. The University of Alberta, in what has been traditionally the most prosperous province in the nation, is likely going to become very poor, very quickly. Their endowment funds, their alumni organization, are going to very soon find out what it’s like to be totally shut out. Hell will freeze over before any oilman makes a personal donation to the U of A after this fiasco. You want money? Ask the Suzuki Foundation. Don’t come to me
again, maybe ever, one might say. In the BOE Report, Jeff Lawson, a principal and director in the corporate finance group at Peters & Co. Limited, wrote an open letter to David Turpin, president and vice-chancellor of the University of Alberta. I happened to see it in the twitter feed of the CEO of a small junior Saskatchewan oil producer. Lawson wrote, in part, “I have tried over the years to support the University as a whole, the law school and the Golden Bears hockey team. In part, I am able to do this because of the support my community provides me, and in part because of my employment in an industry related to the energy industry. “I view this recent action by the University of Alberta as showing a high level of disrespect to this industry, while ignoring its contributions to our province. Like others, I hope the U of A reverses
FROM THE TOP OF THE PILE
By Brian Zinchuk
this action while it can.” After noting how the energy industry has
Why not hand out doctorates to Leonardo DiCaprio, James Cameron, Neil Young, Al Gore, Denis Coderre and Justin Trudeau? been large sponsors of STARS air ambulance, he noted, “I am aligned with the people who support my community and my family. I do not want to associate with an institution that is facilitating an
attack on this community. “These views are my own, but I will share them with many.” You can bet your bottom dollar that those are not just his own views, and that it was fully supported by the executive suite at Peters & Co., one of the largest investment banking institutions in the industry. You know, the type of people who write big cheques, and whose clients also write big cheques, to things like universities. Maybe there are enough left-leaning types in Redmonton, as it has occasionally been called, to ensure the university doesn’t totally starve. But I doubt it. We all know where the big cheques have come from, and it ain’t the earthmuffins. The U of A didn’t just bite the hand that feeds it, it swallowed the whole arm, tearing it off at the shoulder and downing it in one gulp, kinda like a B.C. orca. Here’s some more
people the U of A should hand out honourary degrees to: Let’s start with Leonardo DiCaprio. Then they could work their way over to James Cameron and Neil Young. Don’t forget former-Vice President Al Gore for An Inconvenient Truth (Remember the north pole was supposed to be ice free by now?). And they must, simply must, include former-President Barack Obama for taking seven years to finally say no to Keystone XL. We can’t forget former Montreal Mayor Denis Coderre, who knows pipelines should deliver poop into rivers. And last, but not least, Prime Minister Justin Trudeau, for his tanker ban killing Northern Gateway Pipeline and changing the rules for Energy East, killing it, too. Get to it. Time’s awasting! Brian Zinchuk is editor of Pipeline News. He can be reached at brian. firstname.lastname@example.org.
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PIPELINE NEWS May 2018
Vermilion Energy Inc. acquires Spartan Energy Corp. Calgary – Vermilion Energy Inc. announced on April 16 it was acquiring Spartan Energy Corp. in an all stock deal valued at $1.4 billion. Both companies have been active drillers in southeast Saskatchewan over the last year, often employing multiple drilling rigs. Spartan shareholders will receive 0.1476 of a Vermilion share for each Spartan common share. Based on Vermilion’s closing price of $44.04 on April 13, 2018, the exchange ratio translates to $6.50 per Spartan common share, representing a five per cent premium to Spartan’s closing price. All of the officers and directors of Spartan have entered into voting support agreements and agreed to vote their Spartan shares in favour of the arrangement. The arrangement includes a reciprocal break fee of $40 million. Spartan’s current production is approximately 23,000 barrels of oil equivalent per day (boepd) and independently evaluated proven plus probable reserves as of December 31, 2017 were 113.5 MMboe. The move comes a year and a half after Spartan itself acquired 7,300 boepd of production from ARC Resources in southeast Saskatchewan in a $700 million cash deal. It’s been a big year for Spartan’s president and CEO Rick McHardy as well, as he was named Saskatchewan Oilman of the Year in June 2017. In a release, Vermillion said, “Vermilion focuses on high-netback producing areas with favourable fiscal and regulatory regimes. We entered southeast Saskatchewan with the acquisition of Elkhorn Resources in 2014, and have since continuously evaluated opportunities to expand our position in this area. We added approximately 30 sections of land to our southeast Saskatchewan core area through the end of 2017, and further augmented our asset
Rick McHardy, centre, was presented with the Saskatchewan Oilman of the Year at the 2017 Saskatchewan Oil and Gas Show in Weyburn. Less than a year later, his company, Spartan Energy Corp. is being acquired by Vermillion Energy Inc. File photo base with the acquisition of a private southeast Saskatchewan oil producer in early 2018. The acquisition of Spartan is a value-adding investment which meets our disciplined mergers and acquisition criteria. The acquisition significantly increases our position in southeast Saskatchewan, and aligns with our sustainable growthand-income model by appending high-netback, low decline assets with free cash flow and strong capital efficiencies on future development.” Vermillion went on to say that making no deduction for undeveloped land value, transaction metrics equate to $12.33 per boe of proved plus probable (2P) reserves, and $60,900 per flowing barrel of production. Based on April 13, 2018 WTI strip pricing of US$65.19/bbl, the operating netback
for the acquired assets is estimated at approximately $38.42 per boe. Using a 2P finding, development and acquisition cost of $19.48 per boe (including future development capital) based on the acquisition consideration and Spartan’s reserve report, the acquired assets are expected to deliver a 2P operating recycle ratio of 2.0 times (including the acquisition cost). In a release, Spartan said, “Canadian energy is currently facing a number of significant challenges, including material infrastructure constraints causing discounted and volatile pricing for oil and gas. A combination with Vermilion exposes Spartan shareholders to a well diversified production base and a deep inventory of globally diverse drilling opportunities, providing for sustainable long-term
production and cash flow growth.” The Spartan assets are comprised of highnetback, light oil producing properties covering approximately 480,000 net acres of land (80 per cent average working interest), including 400,000 net acres in southeast Saskatchewan with multi-zone potential. In addition, the acquisition includes approximately 80,000 net acres of land in other areas of Saskatchewan, Alberta and Manitoba. Production from the assets is projected to be approximately 23,000 boepd (91 per cent oil) during 2018. The acquisition also includes ownership and control of producing infrastructure that are synergistic with Vermilion’s existing assets, as well as significant 2D and 3D seismic data. Vermilion’s release said, “We have identified over 1,000
development locations targeting the Ratcliffe, Midale, Frobisher/ Alida, Bakken, and Three Forks/Torquay formations. Most of the future drilling targets are inexpensive open-hole completions not requiring hydraulic fracturing, generating rapid payouts. There are also a large number of identified drilling locations in the hydraulicallyfractured Midale play. In addition, there are significant waterflood development opportunities in the Ratcliffe and Midale zones. The assets demonstrate a current base decline rate of approximately 23 per cent for the first year, and decreasing thereafter. Under the current commodity strip, we expect the assets to generate cash flow in excess of capital requirements for continued growth plus the incremental gross
dividends associated with the new shares issued.” As a result of the acquisition, and based on an expected June 15, 2018 closing date, Vermillion put out a new 2018 production guidance to a range of 86,000 to 90,000 boepd (from 75,000 to 77,500 boepd previously). In addition, Vermilion is increasing its 2018 capital budget to $430 million(from $325 million previously) to reflect additional capital activity associated with the acquired assets. Upon closing of the Acquisition, Vermilion intends to eliminate the 2 per cent discount associated with its dividend reinvestment plan, beginning with the June 2018 dividend payable on July 16, 2018. Vermilion trades on the Toronto Stock Exchange and the New York Stock Exchange under the symbol VET.
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PIPELINE NEWS May 2018
Moosomin Chamber of Commerce hears about Enbridge’s Line 3 replacement, coming soon
By Brian Zinchuk Moosomin – With the next phase of construction on Enbridge’s Line 3 Replacement program expected to start this summer, the pipeline company is out in communities along the line, letting them know what to expect. On April 18, several Enbridge representatives attended the Moosomin Chamber of Commerce meeting. There, Joanne Bradbury, community engagement strategist with Enbridge, gave a presentation about the coming pipeline to a highly interested audience. She made clear that the contractors had not yet been announced, and it is up to the contractor to decide where to establish those field offices. Historically, however, Moosomin has been the field office location for the Terrace B project in 1998 and Alberta Clipper in 2009. The chamber meeting took place in the CanAlta hotel, one of three new hotels built in Moosomin since Alberta Clipper. And they’ll likely be needed, as
the workforce in this area is expected to peak at about 800 people, and run into February, when it’s generally too cold to stay in a camper unless it’s winterized. Bradbury noted Enbridge has been operating in Saskatchewan for 65 years. Line 3 Replacement is anticipated starting this summer, in August. In terms of scale, she called it, “Massive, massive.” “It’s the biggest project we’ve undertaken in our history.” As for the reasoning behind the project, she noted the original was built in 1968, to the highest standard at the time. However, the coating has resulted in a high number of “features” which have needed repair over the years, so in 2013, Enbridge made the decision to do a complete line replacement. Bradbury characterized it as essentially a maintenance project, not an expansion, restoring the pipeline to its original operating capacity. In recent years it has been running at roughly half its capacity, 390,000 barrels per day, due to self-imposed pressure
reductions on the existing line. With the new line, the pipeline will be able to handle 760,000 barrels per day, close to the original specification for the 1968 line. “It is actually a replacement of our current Line 3, not an expansion,” she said. It involves 18 new pump stations in Canada. Where feasible, those are at existing sites. There will be three 375,000-bbl. tanks built at Hardisty, Alta. Already, 400 kilometres of pipe have been put in the ground in Canada during the 2017 construction season. The project is divided into “spreads.” Spread 1, 3 and 4 were completed last year. This year, Spread 2 (Kerrobert to West Milden), Spread 5 (Regina to Glenavon) and Spread 6 (from Langbank to Cromer, Man.) are expected to proceed in Saskatchewan. Moosomin is near the eastern end of Spread
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The Moosmomin Chamber of Commerce was all ears when it came to a presentation by Enbridge about the upcoming Line 3 Replacement project. Photo by Brian Zinchuk 6. A short portion was done several years ago near Enbridge’s Cromer, Man. terminal. The remaining spreads would continue towards the international border crossing at Gretna, Manitoba. The American side, running from Gretna to Superior, Wi., is handled by the American side of Enbridge. The project’s target inservice date is for the latter half of 2019. Once the new line is
completed and in service, Enbridge will begin decommissioning work on the old Line 3. Bradbury said they will remove the oil and clean the pipeline. The old line would be taken out of service and continue to be monitored by Enbridge. With regards to who the prime contractors will be, she said, “We anticipate a decision on the prime contractors in the next couple weeks.”
“This is a fully unionized project,” she said, noting that if anyone is seeking employment on the project, they should contact the local union hall. The first five to seven months are the busiest, she noted, with up to 800 people working at a time per spread, and total work running for up to a year. “As it stands right now, we are looking to start construction in early August,” ► Page A9
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Pipeline expansion will have economic spinoff ◄ Page A7 she said. While they have the green light to build in Canada, they are still working on regulatory approval in Minnesota at the other end of the line. As for why they are starting in August, she explained they cannot go prior to that due to regulatory conditions. Local considerations Bradbury explained that work crews, “need places to stay. There are no housing camps on this project.” She noted building a camp takes away economic benefits from a community. Also, neither Enbridge nor their prime contractors coordinate any accommodations. “But we do have lists, a lot of them,” she said. The workers make their own decisions where they will stay. Generally, that will be in or near the
community where the field office is located. To get on a list, she recommended getting in touch with Enbridge via email at email@example.com. As the weather turns colder and campers are no longer sufficient, many workers will seek hotel or rental accommodations. Basement suites will get full, she noted. It might be time to consider putting your place up for an AirBNB or Vacation Rental by Owner, she offered. The average work day is from 7 a.m. to 5 p.m., which is sometimes extended by overtime. Crews work six days a week, Monday to Saturday. The bulk of the crew is bussed from the field office to the right-of-way. Bradbury encouraged local businesses to make themselves accessible when the workers are in town. As
an example, she suggested, “These guys like to get up and go for a nice big breakfast, at 5 a.m.” She also added they like to, and due to environmental controls, often need to wash their trucks frequently. Therefore, car wash services will be in high demand. “With one day off, most can’t go home,” she said. So there is often a desire to do recreational things nearby. However, if a business is closed on Sunday, they will miss out on that clientele. The workers need access to laundry, groceries and banking, she explained. In the summer, their families will often come and stay with them, and they’ll be looking for recreation on the weekend. “The crew has very limited personal time,” Bradbury said. So offering
bag lunches, for instance, can go over well. She alluded to the need to stay competitive on prices, noting the workers will be minding their dollars as there are not as many infrastructure projects for them to work on, due to the negativity towards pipelines. “They have to be selective on purchasing,” she said. Bradbury also mentioned local inclusion and Indigenous inclusion in the project. There will be several Indigenous monitors on each spread, for instance. In questions from the floor, she was asked how long the influx would last. In response, Bradbury said five to seven months, with crews starting in small numbers at first, then rapidly building to hundreds within a few weeks. “The biggest influx is the welding crew,” she said.
Greg Nosterud asked Enbridge officials a question about archeology, and was told that each spread would have three Indigenous monitors. Photo by Brian Zinchuk The same contractor is expected to work on both Spreads 5 and 6. From Pipeline News’ prior experience and due to the configuration of the sidebooms, the work usually runs from west to east, from Regina to Moosomin.
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PIPELINE NEWS May 2018
Diversification into ag work helped Dangstorp’s Services By Brian Zinchuk Redvers – For Brian Dangstorp, owner of Dangstorp’s Services Ltd., Redvers, he’s been through a tough downturn before. “I saw that in ’99. We did well in ’98, then ’99 was a complete shut down.” He forecasts, “The next industry to take the hit is agriculture. We’ve been riding high for ten years. It’s like the 1970s,” he said. Dangstorp is involved with both industries. Dangstorp’s Services is a dirt moving company which has been heavily involved in the oilfield. The other operation is Redvers Agricultural and Supply Ltd., a Versatile dealership, managed by son Perry. Then there’s a 6,400 acre farm which includes pedigree seed. The operation is based on the north side of Highway 13, on the
northwest corner of the intersection of Highways 13 and 8. “We’re going to make a little comeback,” he said for this year. There’s been a lot of two or three hole projects, then you’re sitting again. The dirt moving focuses on lease building, farm clearing, land clearing, road building, drainage projects and reclamation. A piece of iron from the ag side is going to find its way into oilfield usage this year. Dangstorp said, “I’ve gone to a pulldozer and land leveller, and that has been a good thing for us. Three times the dirt can be carried in one pass. It peaks it all in and carried it.” Pulled behind a Versatile DeltaTrack with 570 to 600 horsepower, it can move more dirt than a Caterpillar D8, of which he has several. It is something of
an apples and oranges comparison, however, as the dozer pushes over the edge. Pulldozers need a path to go around, something that there isn’t room for on a tight lease. “I’ve done some for levelling. We’re going to put a laser on it for levelling,” he said, expecting it will have application in pipelining and roadbuilding. “This is a thing we’ve started with. We’ve done it on the farm, big time, and we’re putting it in the oilfield,” he said. In dealing with the downturn, Dangstorp said, “I cut down. I cut back and went to what I knew, farming and RMs.” That involved doing work on their own farm, which lead to work on other farms. “Farming became 40 per cent of my work. It used to be 10,” he said. During the busy years, oil was 80 per cent
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Brian Dangstorp, left, looks after the oilfield side, while his son Perry, right, handles their agriculture equipment dealership, Redvers Agricultural and Supply Ltd. Photo by Brian Zinchuk of Dangstorp’s Services’s work, with rural municipalities and farm work each counting for 10 per cent. Now, oil is 50 per cent, farm work is 40 and
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rural municipalities are still 10. “I think we can pick that RM stuff up,” he added. The company had grown substantially when times were good, from three dozers to 15. Now they’re down to 14, having sold one, and another is soon to be sold. At 65, he’s slowing down a bit, and plans to reduce that number to a half-dozen eventually.
“If I was going to chase the work, I’d have to go to Torquay and open a shop in Estevan,” he said. That’s not in the plans. Indeed, he had been looking to sell his business after 2015. “I had ideas of selling,” he said. A deal was in the works, but it fell through. At their peak, Dangstorp’s Services was ► Page A11
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PIPELINE NEWS May 2018
This year Dangstorp is bringing a pulldozer into the oilfield ◄ Page A10 running with 15 to 20 people. But the downturn hit hard. “I was down to one operator and four casual, two years ago. I went from three to one in the office. “I’ll be back to four steady operators and two in the shop and one in the office. I use four casuals as well,” he said. They’ve changed how they move dirt as well. “Rock trucks have become a tool we use a lot. We can find operators fairly easily. Scrapers are the cheapest way of moving dirt, but
harder to get talented people.” He explained that by using one excavator operator to load the rock trucks, and a dozer operator at the other end, they are able to get around the need of having several skilled scraper operators. “The oil companies have the service industry beat down too hard,” he said. Asked about 2018, Dangstorp said, “I think we’re going to have more work, depending on the weather. “Diversification is the survival of business.”
The adoption of rock trucks takes care of some of the skilled labour issues when moving dirt. Photo by Brian Zinchuk
DC Spraying is a long family tradition ers, parts and did some custom crop spraying. Then in 1986 Kim began spraying the NAL Nottingham gas plant. Dana started helping in the summers when he was 16. He worked on drilling rigs for three years out of high school, mostly on Big Sky Rig 3. Dana and Kim farm 15 quarters. “I do all the seeing, he does the crop spraying,” Dana said, referring to their own farm’s spraying. “I focus on my oilfield, from June 1 to harvest.” They started out with quads and sprayers, but have since moved to a
By Brian Zinchuk Redvers – The Carlsen family has been involved in lease spraying for several decades now, and the family operation has figured out a balance between their own farm work, and their spraying business. Dana Carlsen, owner of DC Spraying Inc., said, “My dad, Kim, started doing it in ’85 or ’86. I took over in ’07. He ran the whole farm and did oilfield spraying as well.” Prior to that, his grandfather, Donald, started and ran Shortline Spraying. He sold spray-
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side-by-side and truck spraying. Dana said they are constantly adapting. “I backpack quite a bit to keep fit,” he said, referring to a 23 kilogram backpack-mounted sprayer. “It depends on each jobs site. “No day is the same. It’s constantly something different.” Dana said he’s still doing the grunt work. He’ll bring on one person then have a few more that come back part-time. There can be one to five units going at a time, including the truck, side-
by-side and backpacks. Usually two or three are going at a time. “I’m always out there. I’m there every time,” he said. The truck spray is a custom unit with a 300 gallon tank and two hoses. “The truck sprayer is a new thing added to the fleet,” he said. “I prefer not to get too big. It gets to be a headache,” Dana added. He also has a structural pesticide license as well, allowing him to deal with mice around oilfield facilities.
“We move snow in the winter, too. That’s my dad’s operation. I help him out,” he said. Kim’s operation, KC Oilfield Services, has three tractors, with one blade on a 4-wheel-drive tractor and two snowblowers on bi-directional tractors. Snowfall varies year to year. “Some years, you live in the tractors,” he said. Others, not so much. This past winter saw minimal snow clearing. The snow clearing stays pretty close to the farm, which is 29 kilome-
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tres southwest of Redvers. But the spraying ranges as far south as the U.S. border, just into Manitoba, west to Frobisher and Kisbey, north to Maryfield and Whitebear. Rounding out the family operation, Dana’s mom (and Kim’s wife) Lily does the books and has her own bookkeeping operation, Carlsen Enterprises. Dana’s wife, Kate, is a playschool teacher and takes the lead role in looking after their three boys, 2, 4, and 6 years old. “I joke I need to get her out spraying,” Dana said.
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PIPELINE NEWS May 2018
Saskatchewan follows Alberta’s move to cut off British Columbia from our fossil fuel exports By Brian Zinchuk Regina – The Government of Saskatchewan is putting its money where its mouth is, backing the province of Alberta with similar legislation that would allow this province to cut off British Columbia from fuel exports On April 23, Energy and Resources Minister Bronwyn Eyre introduced Bill 126, The Energy Export Act, for first reading in the Saskatchewan Legislature. The government said in a news release the bill responds to the inaction by the federal government to assert its jurisdictional authority to ensure the Trans Mountain Expansion Project proceeds. The bill will create the legislative framework necessary to optimize the value of Saskatchewan’s oil, gas, and refined petroleum products. It establishes a permitting process for individuals or corporations seeking to export such products outside the province.
It does not specifically mention British Columbia, but the reference to the Kinder Morgan Trans Mountain Expansion Project in the affiliated press release made it clear who the legislation is targeted at. The new legislation will provide a means to advance Saskatchewan’s key economic interests, including jobs, investment, industry revenue and activity in the energy sector, the government said. It is similar in intent to legislation recently introduced by the Government of Alberta. “Our government will always stand up for Saskatchewan and defend the people and businesses that rely on our oil and gas industry,” Eyre said. “Increasing pipeline access to tidewater would inject billions of dollars into Canada’s economy. We are in this gridlock today because, in the 18 months since the federal government approved the Trans Mountain pipeline, it has failed to ensure that construction could
proceed. The federal government must ensure its constitutional authority is respected and that the Trans Mountain pipeline gets built.” Eyre said the government considers Bill 126 a last resort that will be used only if the Trans Mountain pipeline continues to be stalled by provincial obstruction and federal inaction and if the Alberta government acts upon its similar legislation. “The expansion of our national pipeline capacity is vital to the future of our energy sector and to thousands of Canadian jobs. It must not be obstructed, either by a lack of federal leadership or by a provincial government that does not have the legal authority to impede a federally-approved project,” Eyre said. She told Pipeline News, “We didn’t want to be here. We take being here very seriously.” Pressed on whether the province would use this legislation in terms of the Alliance Pipeline,
which carries British Columbia gas and is in the midst of an open season for a capacity expansion, she said, “I don’t want to get ahead of myself, nor does the government. “Obviously this could arise as an issue, but we don’t hope it comes to that. “We don’t want to hurt anyone,” Eyre said. The government said access to overseas markets is critical to getting the world price for Canadian crude oil - and to ending the current supply-demand imbalance that leads to significant discounting of Canadian crude oil in oversupplied North American markets. Lack of access to tidewater costs Saskatchewan oil producers an estimated $2.6 billion and cost the province an estimated $210 million in taxes, royalties and other revenue last year. Nitty gritty The fact sheet that came with the press release stated, “With the approval of the Lieutenant Governor in Council,
individuals and corporations may be required to apply for an export permit before there is any exporting from Saskatchewan of crude oil, refined petroleum products or other energy goods if the Bill is passed. Permits can be renewed or amended at the minister’s discretion, in accordance with the Act. More details about the application process will be available once regulations have been developed. “Terms and conditions are within the discretion of the Minister and can be included on the permit, which could include the method by which crude oil, refined petroleum products or any other energy goods can be exported from Saskatchewan. The permit would include what maximum amounts and daily amounts of crude oil, refined petroleum products or other energy goods can be exported from the province as well as the point at which permit holders can export those products. Differ-
Minister of Energy and Resources Bronwyn Eyre. Photo courtesy Government of Saskatchewan ent terms and conditions may apply for permits for other types of refined fuels. “Regulations regarding the Bill could include other fuels, application requirements, circumstances for reconsidering decisions, and fees for both permits and permit renewal. “If the act is passed, anyone who fails to comply with the Act, the regulations, a term or ► Page A14
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PIPELINE NEWS May 2018
Companies could face large fines
We’ve got a more efficient oilfield, says supply store manager
◄ Page A12 condition of a permit or an order of the minister made under the act could be guilty of an offence. In the event a corporation is guilty of an offence, it would be liable to pay a fine of not more than $10 million for each day, or part of a day, on which the offence occurred or continues to occur. Disclaimer: The information in this document is accurate as of April 2018; however, the Government of Saskatchewan accepts no liability for any actions taken as a result of the information contained herein. In the event an individual is guilty of an offence, that person would be liable to pay a fine of not more than $1 million for each day, or part of a day, on which the offence occurred or continues to occur. The minister could make
Redvers – TS&M Supply in Redvers has some roots in the Redvers Oil Showcase. It’s site, on the northwest corner of town, was a prize given away during the showcase a decade ago to one of the sponsors, Classic Vac, on the condition that the winner would build on the site. Classic Vac did, and TS&M moved in as the front office tenant, approximately nine years ago. Dellan Matthewson, branch manager, has been there for eight years, the last 7.5 years as manager. Prior to that he had been a battery operator, and had worked drilling rigs for 14 years, getting up to the position of relief toolpush. “Rigs get a bad rap. I had a very good rig and company, and we worked all the time,” he said on April 18. He worked on the rigs from 1994 to 2008, then operated for over three years before landing at TS&M. The knowledge gained from drilling rigs to operating has been invaluable. For instance, he notes that the rigs have their own terminologies, and the same goes for well operating. “I can visualize what they’re talking about when they’re asking for parts. My years of drilling and operating paid off in this job,” he said. “Since I started, we’ve grown this business quite
an order directing an operator cease transporting natural gas, crude oil or refined fuels. However, the definition of an operator appears to be under the provincial Pipelines Act and Railway Act. Interprovincial trade is federally regulated. The legislation would allow for permits essentially throttling transportation of those products, with the backgrounder saying, “The minister could consider issuing a permit for a lesser quantity of gas, crude oil or refined fuels to be imported into and transported through Saskatchewan than has been proposed in the permit application.” There is a sunset clause that would see the act, if it becomes law, expire Jan. 31, 2019 unless an extension is legislated through amendment.
well. We cater to what our customers require here.” The Redvers location of TS&M, which has locations throughout Western Canada and into North Dakota, carries nothing exotic, he said. They don’t carry pumpjacks, for instance. But of what they do carry, it seems to be working for them. “We didn’t see as big a drop as some areas, because we focus on what’s moving. Oil wells still need to pump. We focused on service work,” Matthewson said. The shelves are filed with pipe valves and fittings, and your standard rope, soap and dope. Most of those items are for steel pipe, as their fiberglass division in Estevan and Virden deals with the fiberglass pipe. A lot of these products will be used on facilities and tie-ins. Four people work at the Redvers branch. “We never went down from that. When I started, we were 2.5,” he said. They did see things flatten out during the downturn, but that’s a lot better than the alternative. For this year, he said, “Our US$60 to US$70 oil is going to be the new norm. We’ll have to accept it. I think the US$100 plus oil hurts everyone’s mentality. We’ve seen the low and come up from there. I believe we, the industry, can make money at US$60 to US$70. All the inefficiency has been eliminated. We’ve got a more efficient oilfield.”
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PIPELINE NEWS May 2018
Alliance Pipeline changes business model, plans expansion of pipeline capacity THREE NEW COMPRESSOR STATIONS PLANNED FOR SASKATCHEWAN
By Brian Zinchuk Calgary – The Alliance Pipeline, which transports natural gas from northeastern British Columbia as well as western Alberta and northwestern North Dakota, is undergoing a change in its business organization. It also announced an open season, which, if successful, would result in a 25 per cent expansion of the pipeline’s capacity. The 3,848-kilometre long, 36-inch Alliance Pipeline passes through Saskatchewan. It crosses our borders near Kerrobert in the west and Gainsborough in the south, but does not transport Saskatchewan gas. The pipeline was originally founded by several oil and gas and pipeline companies, but in the lead up to its construction in 1999-2000, its ownership base eventually consolidated down from a diverse ownership base, an “alliance,” as it were, to Enbridge and Pembina Pipeline Corp. Now, after 18 years in operation, those companies are shaking up Alliance somewhat, with an announcement on March 27 of a new operating model. In a press release of that day, Alliance said, “Alliance Pipeline Ltd. today announced that Enbridge Income Fund and Pembina Pipeline Corporation, each of which owns either directly or through affiliates, 50 per cent of Alliance, have decided to
convert the operation and administration of Alliance Pipeline into an owneroperator model. “Pembina and Enbridge have been working together to develop a business structure for Alliance that allows the business to safely and efficiently deliver value to all stakeholders. Upon implementation of the new operating model, Alliance’s functions will be split between Enbridge and Pembina. “The implementation of this new model is expected to be completed during summer 2018.” Inquiries to Alliance were deferred to Enbridge and Pembina. Suzanne Wilton, senior advisor, media relations, with Enbridge, explained the new business structure allows both businesses to continue to operate the pipeline. It’s a strategic alignment, she said. “Alliance’s functions will be split,” she said. Enbridge will manage the pipeline’s operations, while Pembina will be responsible for commercial and finance functions. To that end, on March 28, Pembina announced an open season on the Alliance Pipeline for expansion capacity commitments. The open season is for an estimated 400 million cubic feet per day of additional firm service, commencing at an anticipated in-service date in the fourth quarter of 2021. The two-month open season begins March
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28, 2018 and closes May 30, 2018. When the pipeline was initially built, it was planned with the capacity for this sort of expansion at a later date, through the addition of additional compression along the line. When the pipeline was first announced,
there were allowances to add additional compressor stations between the existing ones, allowing it to increase its capacity without adding new pipe. In Saskatchewan, that would mean new compressor stations at Rosetown, Chamberlain and Creelman, on land the pipeline
already owns. Additional work will also take place at existing compressor stations at Kerrobert, Loreburn, Estlin (near Regina) and Alameda. Alliance receives natural gas in British Columbia, Alberta and North Dakota and carries it to the Chicago market, de-
livering approximately 1.6 billion cubic feet of natural gas per day. Pending regulatory approval, Alliance will increase capacity by approximately 25 per cent through the addition of compression and other facilities to its system. The planned in-service date is ► Page A16
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PIPELINE NEWS May 2018
Expansion project would add three compressor stations ◄ Page A15 November 2021. The offer is available to both existing and
prospective shippers, for a minimum bid term of 15 years. Two open seasons are being held
concurrently, one for Canadian receipt and delivery services and one for United States transportation service. Parties interested in acquiring capacity from the Canadian receipt points must participate in both open seasons to obtain delivery service to Chicago.
Subject to the results of the open season, this approximately $2 billion project will be backstopped by long term, take-or-pay contracts that will provide customers with long term, firm receipt service with the certainty of fixed fees. “The proposed
expansion of Alliance Pipeline will increase access to premium markets and improve our service offering to current and potential customers,” said Jason Wiun, Pembina’s senior vice president and chief operating officer, pipelines. “While our extensive
discussions regarding the expansion have indicated strong shipper interest, a successful open season process is a crucial step towards advancing the project, and providing our customers with additional service and access to the premium Chicago market.”
Husky donates land and other support for Lloydminster Hospital helipad
The Alliance Capacity Expansion Project (ACEP) would add three compressor stations to the Alliance Pipeline in Saskatchewan. Graphic courtesy Alliance Pipeline.
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hospital, on Husky land. It’s across a greenspace south of Husky Place. Husky is contributing land, financial and other in-kind support. The Lloydminster Region Health Foundation (LRHF) is leading a fundraising campaign to pay for the remaining costs of about $200,000 for the nearly $350,000 project. “The most significant impact of this project will be on the patients who are able to benefit from a more timely transfer with fewer handovers along the way,” said Scott Livingstone, chief executive officer of the Saskatchewan Health Authority on April 20. “Thank you to Husky for its leadership in not only donating to the project, but in having the foresight and determination to plan, coordinate, and execute from beginning to end. We appreciate the work of the Lloydminster Region Health Foundation and community partners who are also pivotal in making this possible.”
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Livingstone said the helipad will reduce the number of patient handovers between referring and receiving health care teams. While best efforts are made by the professionals involved in handing care of the patient to another team, the process carries inherent risks for the patient in the areas of communication between care teams and continuity of care for a critical patient. STARS transport via the helipad would reduce these risks to the patient and improve patient stability. “In an emergency, time can be the difference between life and death. This helipad will provide a critical service to the people of Lloydminster and the surrounding area, allowing health care professionals to treat patients more quickly,” said Paul Zorgdrager, vice president of heavy oil operations. “We live and work in this community. We want to support initiatives like this that will help so many of our neighbours.” An additional benefit from the project is that EMS ground ambulance crews will no longer need to transport aircrews to and from the Lloydminster airport which is located 10 kilometers from the hospital. There will also be reduced time associated with ground transport to/ from the hospital that will free up STARS crews for other priorities. “This project ultimately means lives saved for families in our community for many years to come. Each participant, from the planners to the site workers, will talk to their children and grandchildren about being a part of it,” said Malcolm Radke, Chief Executive Officer, LRHF. “Thank you to Husky for their leadership in donating to the project, and to our local partners, Musgrave Agencies, all of their construction partners, the Lloydminster Rotary Club, and City of Lloydminster for answering the call once again for their families and neighbours. We are excited to work alongside STARS and
There’s a new helipad planned for the Lloydminster Hospital. Graphic submitted other frontline medical and emergency workers in the continued effort to enhance healthcare and save lives in our community.” “Many lives have been saved because of our ability to provide transport and medical expertise to critically ill and injured patients via helicopter air ambulance,” said Andrea Robertson, president and CEO of STARS. “By landing our aircraft beside the Lloydminster Hospital, STARS will be able to get to patients living, working and travelling in the Lloydminster area more directly.” The Lloydminster Hospital is a 66-bed acute care hospital serving a referral population of approximately 72,000 people. The facility currently does not have a heliport; all patient transfers occur by ground EMS directly or by ground EMS to and from Lloydminster Airport, connecting to fixed wing air ambulance or STARS service. This capital campaign will bring a helipad to the Lloydminster Hospital on the adjacent Husky-owned land. This addition ultimately means that when air ambulance transfer is needed for quick response to traumatic incidents or to worsening chronic conditions, patients could be transported to expert medical specialists in urban hospitals within an hour, significantly reducing transfer times.
PIPELINE NEWS May 2018
Making pipelines smart: Hifi Engineering By Brian Zinchuk Calgary – Pipelines, in general, are “dumb infrastructure.” While various meters and sensors will be distributed along a pipeline at individual points, what is happening between those points is generally unknown on a continual basis, being inferred between the point monitors. But one company, Hifi Engineering of Calgary, is working to change that. By applying specialized fibre optics as continual sensors, they are able to monitor the entire length of pipe where their sensors are applied, in real time, with pinpoint accuracy. And if there’s any doubt to how important this information is, Enbridge holds a 15 per cent stake in the company, and Cenovus holds another 15 per cent. The largest pipeline operators in the country are on the company’s client list. On April 10 Steve Koles, president of Hifi Engineering, spoke to Pipeline News by phone. The company has installations in Saskatchewan, including the replacement of the Husky pipeline at the North Saskatchewan River that leaked in July 2016. In Alberta, one of its prominent applications has been on a 32-kilometre segment of the Enbridge Norlite pipeline. It has also been applied on the last kilometre of the existing Kinder Morgan Trans Mountain Pipeline in Burnaby, British Columbia. Koles described Hifi as a technology company specializing in fibre optic sensing. While fibre optic sensing is now a mature technology in the oilpatch, around for at least 15 years, the use of telecombased fibre has been prob-
lematic. He noted that the signal to noise ratio on telecom-based fibre, which they used initially as well, makes it difficult to tell the customer if there is a deviation, or if it’s simply false data. “We got tired of explaining noise in the data. Is that a real sound or a harmonic?” Koles said. Therefore their technology is based on a high fidelity, high signal-to-noise ratio, using specialized fibre optic cable. Through one strand, they are able to monitor three separate parameters. It can detect acoustics, both sonic and ultrasonic. It can resolve temperature differences down to 0.001 degrees Celsius. Finally, it can detect kinetic changes, vibration and strain, down to the micrometre. It does all this at the speed of light, and with pinpoint accuracy as to where disturbances occur along the pipe. It’s like taking a rotary dial phone and turning it into an iPhone, an analogy Koles felt was apt. This type of technology has been used in downhole applications, and indeed, Hifi started in that area. The Aquistore observation well has four fibre optic sensors strapped to the exterior of its casing, for example, although that was not a Hifi project. Asked about whether this technology is used for short or long applications, he noted that it has been spec’d in an request for proposals for the water crossings on the Enbridge Line 3 expansion, and on another 150 kilometre project near Saskatchewan. They have investigated using it on projects as long as 1,700 kilometres. ► Page A18
The orange conduit, strapped to the top of the pipeline, contains a fibre-optic sensor made by Hifi Enegineering. Photo submitted
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PIPELINE NEWS May 2018
Continual monitoring down the length of pipelines using fibre optics ◄ Page A17 They are able to go as far as 100 kilometres at a stretch between surface installations, meaning there is no need for regular, shortdistance boosters. Instead, boosters can be installed at pumping stations or valve sites, places where commercial power is readily available. Where installed, the system provides leak detection on every centimetre of the asset, according to Koles. Those sensing parameters allow for several monitoring scenarios. It can detect vibration, such as that caused by heavy equipment near the pipe. He cited an example where a residential subdivision was built near an existing right-of-way and people were using the right-ofway to bring in equipment into their yards. Similarly, the fibre optic sensor can detect lines strikes or breaks, as well as tampering. If a line were to break or rupture, they can determine its pinpoint position immediately. The temperature monitoring can determine thermal events, like a forest fire. There are three ways
the fibre optic sensor can be applied, according to Koles. The first is strapped directly to the exterior of the pipe in a multi-channel conduit. The conduit not only protects the sensor, but also has additional channels for future additions. This could be new technology, communications or power at a later date. Asked about how that would work with horizontal directional drilling (i.e. road bores, river crossings), Koles explained they have conduit for those applications. A second method of application is to have the fibre optic in the trench adjacent to, but not touching the pipe. This would typically be up to a metre away from the pipe. However, they have done a test where the sensor was three metres from the pipe, and a 0.7 millimetre, 18 pounds per square inch leak at the 9 o’clock position on the pipe was still sensed through the acoustic and strain parameters. Lying the fibre optic adjacent to the pipe is particularly useful in applications where there are multiple pipes in a common trench. The third method
of application is inside the pipe, using a 1/4 inch stainless steel capillary. This works as an inline inspection tool. They can push and pull the line into place. With regards to pigging, they are working on cleaning pigs that would be of a configuration that would allow the pig and the capillary to both be in the pipe at the same time, with the pig having allowance for the capillary. Installation of the fibre optic sensor would add another process to pipeline tie ins during construction, prior to backfill. Workers would need to splice the sensor together, melting the glass fibre of the strands from each direction into one. Koles noted this is a very mature process and done routinely by telecom companies. “My biggest competitor is the status quo,” Koles said. Their fibre optics sensing is a complement to existing conventional systems, he said. As any pipeline leak these days draws headlines, this application improves pipeline monitoring. “We need to be doing more to achieve better social license,” Koles concluded.
Hifi Enegineering’s fibre optic sensor can also be located in the trench, adjacent to several pipes. Photo submitted
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PIPELINE NEWS May 2018
Diversification and hard choices got Poplar Services and Double Barrel through the oil price downturn By Brian Zinchuk Redvers – For Redvers-based Poplar Services Ltd. and Double Barrel Oilfield Services, the downturn meant hard choices and diversification. Brian and MarieFrance LeNouail own and operate the two companies. They spoke with Pipeline News on April 6. “During the downturn, we diversified and started moving grain bins and ag product,” Brian said. That meant using their units that were originally meant for oilfield hotshot services to move grain bin hopper cones and chemicals in totes. Double Barrel has a highboy trailer and a medium-duty semi. They also have a one-ton and a gooseneck trailer, two skidsteer loaders and a mobile wash trailer used to clean wellheads, grain bins and their own equipment. “We’re in partnership with the local Co-op – their trailer, our truck, and we work through them,” Brian said. Double Barrel started in June 2013, making the company just about five years old now. It’s run and managed by David
Bernuy with two fulltime workers and one part-timer. Regarding hauling grain bins, Brian said, “We’ve stuck with it as we come out of the downturn. It’s a good fit for us. It’s what kept guys working.” He noted drilling was very slow at one point, and the ag work kept people working. “It hit us more on the Poplar side than Double Barrel,” he said. At peak, Poplar had eight people working for it. “We came all the way down to three for a while, now four, including ourselves.” Poplar started in 2006, and the first few years saw him doing pretty much everything, and he’s back to that again. For Marie-France, she said, “In the fall of 2015, we ripped off the bandage.” Poplar is closely tied to the drill bit, sampling drilling shale for land spreading. If there’s no drilling, there’s no sampling, and for long periods of the downturn, drilling was down tremendously. At the very bottom, when there were just eight drilling
rigs working in southeast Saskatchewan for a brief time, they noted they were providing services for two of them. MarieFrance wryly commented, “We had 25 per cent of the market.” For 2017, Brian said, “It’s back to about 60 per cent as busy as we were during the peak. But it’s a much steadier pace now. We’ve been forced to find ways to be more efficient.” Like what services companies in nearly all oilfield sectors have experienced, pricing is down. They went through two to three rounds of cuts. “The big difference with being a small contractor, one of the big things was the number of hours the ownership was putting in,” he said. Brian is again in the field, and in Calgary, wearing every possible hat. “I don’t think we’ll see the levels in 2011, where you couldn’t hire people fast enough. A steady pace is better,” Brian said. Marie France added, “There’s a confidence it’s back.” When the downturn hit in the fall of 2014, it just happened to coincide with a job opening for Marie France in her
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career as a teacher, even though they were extremely busy with Poplar at the time. She went back teaching as a temporary gig, and that turned into full-time work. She’s now the principal at Ecole de Bellegarde in nearby Bellegarde, an all-French school with 76 students. Six of her students are graduated this year. She noted that high school students are now more focused on getting their education, as opposed to looking for careers in the oilpatch. “The oilpatch is a filler. That’s disheartening for me. I made the oilpatch a career and I still enjoy it,” Brian commented. “We’re competing more with the ag sector,” he said, adding that ag has more reasonable hours than the oilpatch. While she had been working full-time with Poplar going back to teaching brought in outside income. Brian noted, “As a business owner, the first person’s wage that
Marie-France and Brian LeNouail buckled down during the downturn, doing whatever they needed to in order to keep going. Marie-France took outside work and Brian returned to field work. Photo by Brian Zinchuk gets cut is the owner.” Asked about 2018, Marie-France said, “The pit in the stomach is gone,” and Brian agreed. He said, “We’re working. This breakup, we’re getting planning for the summer again.” He expects the long winter, with blizzards that extended into April, will extend road bans. He noted they were still playing hockey on a natural ice rink in April. They own a couple
of rental properties in Redvers, and they are now both rented and they are still getting calls. That’s a sign things are picking up. “We’ve seen houses sell in town,” Brian said. “The local economy I spicking up. His role on the Redvers Oil Showcase is looking after outside exhibitors, and he’s happy to report they are sold out for those outdoor spaces and have a waiting list. “That’s a big positive for us.”
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PIPELINE NEWS May 2018
Compression is the name of the game
WHEN GENERATORS TANKED, COMPRESSION MAINTENANCE SAVED THE DAY
By Brian Zinchuk Redvers – Redvers Generators and Compression is more about the compression these days and less about the generators. That’s according to owner Darwin Fedorowich on April 6, a day when winter decided spring doesn’t need to come just yet. “It was -28 when I woke up this morning,” he said. Pipeline News last spoke to Fedorowich, a journeyman heavy duty mechanic, in 2011, when the company was focused on generators. “Since our latest downturn, the generator business suffered a severe slowdown,” he said. Since generators are largely used on new wellsite, and drilling took a severe beating since the beginning of 2015, he had to do something. “We restructured,” he said. They used to have 10 generators. “I’ve sold all but two,” he explained. He started selling off
units in 2016 to a local farmer over .15 years. Instead of powering wellsites, they’re now used for grain bin aeration. Fedorowich was a maintenance technician at the Nottingham gas plant for 12 years prior to starting his current business. Regulations on natural gas conservation, in particular Directive S-10, which was to reduce venting and flaring, drove a lot of work form him, with an influx of gas compression. “We were the only ones doing that work at the time,” he said. “We’re big compression, large units and midstream units, gas plantscale.” The “we” came from the addition of one apprentice, Michael Sylvestre, in May 2012, and then Caleb Culbertson in November 2017. Sylvestre recently got his heavy duty mechanic journeyman papers in December 2017. Their fathers have worked together for
25 years, and now the sons are, too. Sylvestre started apprenticing with Fedorowich while he was still in high school. Culbertson had been in his second year of an agricultural tech course and nearly had enough hours for a full journeyman, but they didn’t transfer over, and they had to start from scratch. “I’m starting all over again,” he said. In late April he was scheduled for his classroom component. That agricultural background brings a new capability to the company, working on air conditioning systems. “I was the A/C guy for heavy equipment,” Culbertson said of his prior experience. They’ll be doing A/C work for farm machines and “yellow iron” heavy equipment. “Because of the downturn, we went into mainly gas plant maintenance,” Fedorowich said. Effectively, he went back to what he
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From left, Michael Sylvestre, Caleb Culbertson and Darwin Fedorowich stand behind a diverse selection of their tools and products of their trade. From left there are cooler tube testers, air conditioning recovery device, tubes from process filters, oil filters, and a laser alignment tool. Photo by Brian Zinchuk is optimistic. “We’ve got lots knew. carry natural gas process of upcoming work booked They specialize in air filtration and lube filtration. for customers. Our name is cooler leak tests. That’s the This includes compresgetting out.” gas cooler for compression sor valve oil filters and That includes overand the radiators for motors. coalescing filters. The stock they bring in is made in alls and plant shutdowns “Over time, those tubs leak. booked for upcoming year. We have the equipment and Saskatchewan, at Failure prevention services, Watson. “That being said, skill to test that,” he said, All these diversificacompetition is coming,” adding they can test cooler tions have kept the comFedorowich added. tubes individually. They’ve kept their rates “We also do laser align- pany in the black during the the same since 2011. ing of drivers to compressors downturn. They now have two fully equipped trucks Knowing the right and pumps. We can get as for field services and are in people has helpd, according close to zero as possible, the process of obtaining a to Fedorowich. “It’s all about within the thickness of a third. making relationships in the human hair.” oil industry,” he concluded. For 2018, Fedorowich Fedorowich said they
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PIPELINE NEWS May 2018
25 years coming up for Culbertson Contracting Redvers – For Redvers-based Culbertson Contracting, there’s a big date coming up soon. “July 6 will be 25 years,” said Jim Culbertson, owner. “A guy’s gotta eat.” “I worked service and drilling rigs all over Western Canada,” he said, having gotten into the industry right out of high school, starting on June 27, 1980. There was nothing in Saskatchewan for him at the time. “We had the National Energy Program under the previous Trudeau,” Culbertson said. “Me and another fellow went to Alberta and looked for work. We found a job the next day.” When he came home he did some more service rig work in the area before taking on a job driving a tank truck for Alida-based Three Star Trucking for a decade after that. A mechanical inclination lead to work as a field and battery operator and Culbertson Contracting was born. Later that year Gilles Sylvestre joined him, and they have worked together ever
since. Recently their sons, Michael Sylvestre and Caleb Culbertson, began working together at Redvers Generators and Compression. “We specialize in the production of crude oil, salt water and natural gas, and ship it to their respective end destinations,” Jim said. As part of that, they operate nine batteries. Culbertson’s other son, Tyler, joined up a year ago, making the company a trio. He also drove for Three Star, in the case, for two years. He had been working on his heavy duty mechanic apprenticeship but decided a change was in order. Keeping the company small has been by design. “I’ve always been like this. It’s hard to find trustworthy and hardworking people,” he said. “If we mess up, stand up and take your lickin,’” Culberson Contracting looks after wells and batteries for seven different oil companies, principally junior producers. They’ve divided the
wells into two runs, east and west. Gilles and Tyler will each take one for a rotation, then alternate so that a fresh set of eyes is applied to the work. Jim acts as the swing for them. Their operating area includes southeast Saskatchewan and southwest Manitoba, generally closer to Redvers. “When it’s busy and they’re drilling, it’s hectic. We had four new wells in our area in the last year. At times, we had up to four new wells a week, back when oil was over $100 per barrel.” Jim thought it things would change when oil reached US$60 per barrel for WTI, but so far, they haven’t seen that. Part of their strategy in dealing with the downturn has been running their pickups longer before replacement. The now-higher price of oil, and the resultant spinoffs from it, hasn’t kept pace with the price of gasoline, which is now as high as $1.20 per litre. “I’m eating that,” he said. Long-term, they plan to keep on going. Jim said, “I’ll do it as long
Jim Culbertson’s outfit, Culbertson Contracting, has been looking after wells and batteries for 25 years. Photo submitted as we can maintain the clients. We work with all the junior companies out here, working with all the production foremen.” This year looks
promising, he said, with some companies starting to plan their activity. He said you’ve always got to be positive in this industry.
Working with junior producers, he said, you need to “base it on integrity, treat them the same as we want to be treated, fair and honest.”
Toolpush working in agriculture during down time Redvers – Dave Carriere in some ways exemplifies the way oilfield workers have coped with the downturn. His regular gig is as a drilling rig toolpush, but in recent years he’s spent up to eight months a year working as a farm and shop labourer with Brian Dangstorp’s farm, dirt moving and ag dealer
operation in Redvers. “I’m a toolpush for Trinidad Rig 425,” he said. For the winter drilling season, he said, “We fired up Dec. 4 and went right to March, with a few weeks off for Christmas.” In recent years he noted his rig has ► Page A23
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C/w Lash Ent. pressure truck set up, 3x5 Gardner Denver triplex pump, 5000 psi, hydraulic drive load pump, 2012 Advance 12m3 aluminum tank, TC 406 code, hoses, tool boxes, fittings, all certifications up to date. State DOT, Wet Kit, A/C Condition: Excellent, Differential Lock, Turbo, 8x2
2006 WESTERN STAR 4900FA
C/W recent engine work 1 year warranty, Dual exhaust, Dual S.S. breathers, new rubber, Aluminum front ROO bumper, New Sask Safety, A/C Condition: Good, A/C, Differential Lock, State DOT, 8x2, Number of Beds: 1, Overhaul
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PIPELINE NEWS May 2018
Seeking a buyer was the right move By Brian Zinchuk Redvers – Back in November 2016, Redvers-based Akme Controls Ltd. was acquired by Tarpon PTW. And that was by design, according to Matt Axten, who, with Eric Kesslering, were the majority owners of Akme. He now looks after the Redvers office. Axten said negotiations had started a year before that. They had sought out a buyer with the intentions to grow beyond what they were capable as a 25-person, three-shop company. Akme Controls had started in 2010, and had shops in Redvers, Weyburn and Estevan. “Throughout the downturn, our numbers were phenomenal. But big customers felt they’d be optimized by going with sole-source contractors,” he said on April 20, noting decisions for those oil companies were being made at the Calgary level. “We saw the writing on the wall, so we started to advertise and interview.” It came down to
the common notion that big companies want to deal with big companies. That hasn’t always been the case in southeast Saskatchewan, he noted, which has been something of a unique business environment. Indeed, Axten said it was “super unique – up until recently, the decisions were made a the ground level. Field level operators and supervisors had a lot of decision making ability.” Now they are part of the bigger family, Tarpon PTW. “They were the perfect fit. I’m extremely happy we sold to them,” Axten said. “We focus on oilfield instrumentation, electrical maintenance and construction services. We are able to provide clients with items pertaining to measurement, automation, combustion and optimization.” A recent project, for instance was a new facility in the Torquay area. “As Akme, we were limited in manpower, and Tarpons was too. Now we can capture that,” he said.
The crew from Tarpon PTW in Redvers. Photo by Brian Zinchuk “In this (Redvers) area, we focus a lot on maintenance and diversification. It’s more about keeping everything running and optimized.” A recent development has them looking at the sky, literally. “We’re looking at some good-size solar,” he said. Axten noted that flare gas power generation stumbled out of the gate, as SaskPower had
shut down its small power producers program. However, he’s hoping that will resume some time in the future. “This shop has 14 people right now. We have 50 between Weyburn, Estevan and Redvers.” “Tarpon’s business down here has been successful relative to the rest of the industry. We’re gaining some customers and expanding some
customers,” Axten said. They operated 25 to 30 field trucks and a heavy service truck. “One of our biggest things is our measurement service equipment,” Axten said. “We got into it six years ago. It’s top-of-the-line, state-of-the-art. “I was with Husky in Alberta and learned about it there. Saskatchewan tends to be 10 years behind Alberta and it was 10 years, almost to the
day, Saskatchewan started talking about it.” An initiative by the Saskatchewan Ministry of Energy and Resources known as PNG 17, Measurement Requirements for Upstream Oil and Gas Operations in Saskatchewan, is part of their growth strategy. He explained that PNG 17 is about metering has rules of reporting that will have to be followed and reported.
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PIPELINE NEWS May 2018
Redvers has three goals for economic development By Brian Zinchuk Redvers – Christina Birch is Redvers’ new economic development officer, having started at the beginning of 2018. She has three goals – to retain and expand existing business; to attract new business to the area; and to promote Redvers and district as a community in which to live, work and prosper. Birch spoke to Pipeline News on April 20 and 22. “Redvers has been fortunate in the fact that despite the downturn, we have continued to experience population growth. Our economy is diversified, but with the oil sector being a driving force, our community was definitely affected. It’s not only the businesses in the oil sector that were impacted, but all of the businesses in town. And the organizations as well. There’s no doubt about it, the less money in the pockets of community members, the less money that is circulated throughout the community,” she said. “We are optimistic about what is to come in the next few years. The Redvers Economic Development initiative was launched in January of this year with three primary objectives, the first of which is to retain and expand current businesses. We want our businesses in Redvers to be successful, so we are providing them with as much support as possible to help make that happen. We work with our businesses to bring in specialized training opportunities and we also work at promoting them both within the community
and outside of it.” On the idea of bringing in new commerce, she said, “Our second objective is to attract new businesses. We are doing that through networking and speaking with prospective businesses and investors. We have several examples of success stories in Redvers such as Poplar Services, TS&M, Ironrider Oilfield, Dangstorp’s Services and Tarpon and that’s just to name a few. We have commercial space that is available right now and we are actively working at filling it. We want to make it easy for companies to set up shop here. We’ve got a great community and business community that welcomes new businesses, available infrastructure, and we’re really focusing on implementing initiatives to ensure any new business is not only successful in their start-up, but that they continue to thrive long-term. “It’s our intent to assist businesses with all of their business needs. In some ways, that means assisting them with information on available office space and potential development space, and in other ways that means providing training and education opportunities. For some businesses, it means simply providing details on a prospective employee base. And for those businesses looking at expansion, it can mean providing information on any grants, funding or potential investors that are available to support that growth. With regards to promoting the town, she said, “We are promoting Redvers as the great community
Carriere has lots of experience ◄ Page A21 been a winter drilling rig. “The rigs haven’t been too busy since 2015,” he said “The last two years I’ve been here seven to eight months,” he said of his work with Dangstorp’s. The Storthoaks resident continues a long tradition of men from that community finding work on the drilling rigs. He’s been working rigs since 1998, said the soon-to-be 40-year-old. In Storthoaks he has a rather unique shop. “I bought the school in town. The whole school is my shop. It has lots of space to tinker for a bored toolpush. The whole 40x60 gym is my shop.” One of the classrooms is a poker room. Another is a projection
that it is. We’ve got a great location at the junction of Highways 8 and 13. We’re located in the southeast corner of the Bakken oil reserve, right in the middle of the Williston Basin. We’ve got a hospital, affordable housing, a K-12 school and a francophone school just minutes away. We have lots of active organizations and services groups, and lots of events spread throughout the year. “We host the Red-
vers Oil Showcase on a bi-annual basis which is coming up on May 30 and 31st. And we have a town council that is committed to making our community the best it can be. They just announced a residential lot incentive where purchasers save 50 per cent off the cost of land. Our motto here in Redvers is ‘Come Grow With Us,’ and we’re focused on continuing to provide an environment where that to happen,” Birch concluded.
Christina Birch is the new economic development officer for Redvers. Photo by Brian Zinchuk
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When he’s not pushing his drilling rig, Dave Carriere is turning wrenches or driving a tractor for Brian Dangstorp in Redvers. Photo by Brian Zinchuk room. There’s also a pool table. The whole building was purchased for just $7,000. On April 20 he was working on farm equipment for Dangstorp, getting it ready and changing oil. The next day, the air seeders were coming out.
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PIPELINE NEWS May 2018
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