Canadian Energy Centre
Canada remains on the sidelines as global competitors double down on energy projects
By Deborah Jaremko of the Canadian Energy Centre
From the Taliban to Russia, billions in oil and gas investment underway around the world
As Canada’s oil and gas industry faces the uncertainty of a looming emissions cap and a “Just Transition,” billions of dollars of investment is underway in other countries to grow oil and gas supply for the future.
Here’s just a handful of examples.
Afghanistan – Amu Darya basin
US$690 million
Xinjiang Central Asia Petroleum and Gas Co.
In January, Chinese state-owned Xinjiang Central Asia Petroleum and Gas Co. signed a deal with the Taliban-controlled Afghanistan government to invest nearly US$700 million over four years on oil development in the country’s north.
The 25-year contract also involves building Afghanistan’s first oil refinery.
The Taliban militant group returned to power in Afghanistan after the withdrawal of U.S. forces in 2021. Its ownership share of the oil project will gradually rise to 75 per cent, according to spokesman Zabihullah Mujahid.
The Taliban maintains close ties with the terrorist group al-Qaeda, according to the Council on Foreign Relations (CFR). Since resuming its rule in Afghanistan, authorities have resumed public floggings and executions, violently cracked down on protesters and activists, “obliterated” women’s rights, and “enforced prohibitions on behavior deemed un-Islamic,” the CFR says.
Brazil – Santos Basin
TotalEnergies
US$1 billion
France-based TotalEnergies announced in January it will go ahead with a US$1 billion expansion of oil production offshore Brazil.
The development is located about 300 kilometres off the coast in the Santos Basin. TotalEnergies, which has operated in Brazil for more than 40 years, is 45 per cent owner along with partners Shell, Repsol and Sinopec.
The project will consist of three new deepwater wells connected to an existing floating production and storage vessel. It is expected to increase production to 60,000 barrels per day in 2025, up from about 35,000 barrels per day today.
Norway – Norwegian Continental Shelf
Aker BP
US$29 billion
Oslo, Norway-based Aker BP and its partners filed formal plans in December for four offshore oil and gas projects on the Norwegian Continental Shelf.
A total investment of nearly US$30 billion, the developments are expected to increase Aker BP’s oil and gas production to around 525,000 barrels per day in 2028, compared to 400,000 in 2022.
The company’s strategy is to meet the world’s growing need for energy while simultaneously contributing to reducing emissions, said CEO Karl Johnny Hersvik.
The projects are enabled by a 2020 government stimulus package that “allowed oil companies to embark upon new commitments,” he said.
Qatar – North Field East LNG expansion
Qatar Energy
US$29 billion
One of the world’s largest LNG exporters is expanding its capacity with the largest LNG project ever built.
State-owned QatarEnergy’s US$29 billion North Field East Expansion will increase the country’s LNG export capacity to 110 million tonnes per year, from 77 million tonnes per year. Startup is expected in late 2024.
A planned second phase of the project will further increase capacity to 126 million tonnes per year. QatarEnergy’s partners include Shell, TotalEnergies, Exxon Mobil, ConocoPhillips and Eni.
World LNG demand reached a record 409 million tonnes in 2022, according to data provider Revintiv. It’s expected to rise to over 700 million tonnes by 2040, according to Shell’s most recent industry outlook.
Russia – Vostok Oil
Rosneft
US$170 billion
Despite the war in Ukraine and wide-ranging energy sanctions, Russian state-owned oil company Rosneft says work continues to advance on schedule for the massive Vostok oil project.
The US$170 billion project will use the Northern Sea Route to export about 600,000 barrels per day by 2024. Production is expected to increase to two million barrels per day after the second phase.
Rosneft reports that as of mid-2022, more than 1,000 units of special construction equipment are in operation, as well as seven new Russian arctic class drilling rigs, with another five on the way. Over 4,000 people and 2,000 vehicles have been mobilized.
“This means that the project lives and develops as planned, the inevitable difficulties are being overcome, but we have full confidence that all the tasks will be completed,” Rosneft CEO Igor Sechin said.
“In the context of decreasing investment in the oil and gas sector, Vostok Oil is the only project in the world capable to provide a stabilizing effect on the hydrocarbon markets.”
From the Canadian Energy Centre Ltd.
Alberta
Heavy-duty truckers welcome new ‘natural gas highway’ in Alberta
Clean Energy Fuels CEO Andrew Littlefair, Tourmaline CEO Mike Rose, and Mullen Group chairman Murray Mullen attend the opening of a new Clean Energy/Tourmaline compressed natural gas (CNG) fuelling station in Calgary on Oct. 22, 2024. Photo courtesy Tourmaline
From the Canadian Energy Centre
New compressed natural gas fueling stations in Grande Prairie and Calgary join new stop in Edmonton
Heavy-duty truckers hauling everything from restaurant supplies to specialized oilfield services along one of Western Canada’s busiest corridors now have more access to a fuel that can help reduce emissions and save costs.
Two new fuelling stations serving compressed natural gas (CNG) rather than diesel in Grande Prairie and Calgary, along with a stop that opened in Edmonton last year, create the first phase of what proponents call a “natural gas highway”.
“Compressed natural gas is viable, it’s competitive and it’s good for the environment,” said Murray Mullen, chair of Mullen Group, which operates more than 4,300 trucks and thousands of pieces of equipment supporting Western Canada’s energy industry.
Right now, the company is running 19 CNG units and plans to deploy another 15 as they become available.
“They’re running the highways right now and they’re performing exceptionally well,” Mullen said on Oct. 22 during the ribbon-cutting ceremony opening the new station on the northern edge of Calgary along Highway 2.
“Our people love them, our customers love them and I think it’s going to be the way for the future to be honest,” he said.
Heavy-duty trucks at Tourmaline and Clean Energy’s new Calgary compressed natural gas fuelling station. Photo courtesy Tourmaline
According to Natural Resources Canada, natural gas burns more cleanly than gasoline or diesel fuel, producing fewer toxic pollutants and greenhouse gas emissions that contribute to climate change.
The two new CNG stops are part of a $70 million partnership announced last year between major Canadian natural gas producer Tourmaline and California-based Clean Energy Fuels.
Their deal would see up to 20 new CNG stations built in Western Canada over the next five years, daily filling up to 3,000 natural gas-fueled trucks.
One of North America’s biggest trucking suppliers to businesses including McDonald’s, Pizza Hut, Subway and Popeye’s says the new stations will help as it expands its fleet of CNG-powered vehicles across Canada.
Amy Senter, global vice-president of sustainability with Illinois-based Martin Brower, said in a statement that using more CNG is critical to the company achieving its emissions reduction targets.
For Tourmaline, delivering CNG to heavy-duty truckers builds on its multi-year program to displace diesel in its operations, primarily by switching drilling equipment to run on natural gas.
Between 2018 and 2022, the company displaced the equivalent of 36 Olympic-sized swimming pools worth of diesel that didn’t get used, or the equivalent emissions of about 58,000 passenger vehicles.
Tourmaline CEO Mike Rose speaks to reporters during the opening of a new Tourmaline/Clean Energy compressed natural gas fuelling station in Calgary on Oct. 22, 2024. Photo courtesy Tourmaline
Tourmaline CEO Mike Rose noted that the trucking sector switching fuel from diesel to natural gas is gaining momentum, notably in Asia.
A “small but growing” share of China’s trucking fleet moving to natural gas helped drive an 11 percent reduction in overall diesel consumption this June compared to the previous year, according to the latest data from the U.S. Energy Information Administration.
“China’s talking about 30 percent of the trucks sold going forward are to be CNG trucks, and it’s all about reducing emissions,” Rose said.
“It’s one global atmosphere. We’re going to reduce them here; they’re going to reduce them there and everybody’s a net winner.”
Switching from diesel to CNG is “extremely cost competitive” for trucking fleets, said Clean Energy CEO Andrew Littlefair.
“It will really move the big rigs that we need in Western Canada for the long distance and heavy loads,” he said.
Tourmaline and Clean Energy aim to have seven CNG fuelling stations operating by the end of 2025. Construction is set to begin in Kamloops, B.C., followed by Fort McMurray and Fort St. John.
“You’ll have that Western Canadian corridor, and then we’ll grow it from there,” Littlefair said.
Canadian Energy Centre
Alberta Indigenous energy ownership driving increased economic activity
In December 2023, the Alberta Indigenous Opportunities Corporation provided a $150 million loan guarantee to support the 12 Indigenous Communities of Wapiscanis Waseskwan Nipiy Limited Partnership (including the Peerless Trout First Nation) in financing an equity investment in oil and gas midstream infrastructure in the Clearwater play in Northern Alberta. Photo courtesy AIOC
From the Canadian Energy Centre
By Will Gibson
‘We live in a new world, and I’m excited about the possibilities’
Five pristine lakes sit in and around the Peerless Trout First Nation in the unbroken boreal forest of north-central Alberta about 200 kilometres north of Slave Lake.
When asked about the fishing, Tyler Letendre smiles wryly. “It lives up to the name,” says the Nation’s director of operations and economic development officer. “It’s peerless.”
The community’s leadership is exploring the idea of building a lodge to lure recreational anglers from across North America to reel in the large pike, trout and walleye that inhabit the dark blue waters in those lakes.
After joining the Clearwater Infrastructure Limited Partnership in December 2023 with 11 other Indigenous communities and Tamarack Valley Energy, they have the financial clout to develop a resort.
“Joining the partnership has been a game changer for our nation, 100 per cent. We won’t compromise on treaty rights, but we are big fans of economic growth,” says Letendre.
“The money provided by the federal government to First Nations isn’t enough to sustain the programs and infrastructure required so we have to generate our own income. Equity deals like Clearwater do that,” he says.
“We are shareholders along with major institutions. We now have banks who want to come invest in our communities. We live in a new world, and I’m excited about the possibilities.”
The growing number and value of Indigenous equity ownership deals in Alberta is helping fuel stronger participation in the province’s economy, according to a recently released report from ATB Financial and MNP.
The study concluded that total Indigenous economic activity in Alberta grew by a substantial 42 per cent between 2019 and 2023.
Last year, Indigenous-owned businesses generated $5.25 billion in economic output, $380 million in tax revenues and $1.33 billion in labour income from 25,800 full-time jobs.
The resource sector has an outsized impact in this area as its relationship with First Nations and Métis communities in Alberta has evolved and grown.
“The fastest growing and largest opportunities for Indigenous communities in Alberta come from the resource sector,” says Justin Bourque, president of Âsokan Generational Developments, a consultancy that specializes in partnerships between Indigenous communities and industry.
He says the evolution of the relationship between Indigenous communities and the resource sector has mirrored the broader progress of reconciliation.
“Our entire society is on a journey of reconciliation between Indigenous and non-Indigenous communities. The engagement and relationship between the resource industry and Indigenous has continued to evolve.”
In recent years, particularly following the creation of the Alberta Indigenous Opportunities Corporation (AIOC) in 2019, these relationships have increasingly moved from short-term benefits to long-term legacies through equity ownership deals like Peerless Trout’s agreement with Tamarack Energy.
ATB highlighted the Astisiy project in the oil sands region, a Cree word meaning “thread from sinew” that is used for Indigenous beading.
In September 2021, Suncor Energy and the AIOC enabled eight Indigenous communities to acquire 15 per cent ownership of the Northern Courier Pipeline, a 90-kilometre system that transports bitumen from the Fort Hills mine to the East Tank Farm north of Fort McMurray.
The community partners are projected to receive $16 million in annual payments from the deal.
Bourque’s Willow Lake Métis Nation has used its portion of the revenues to purchase a 205-acre parcel southeast of Fort McMurray, giving the community land to call its own.
“Ownership and partnership is the next logical evolution of the relationship between Indigenous communities and the energy sector,” says Bourque.
“Before Indigenous communities had the opportunity to invest in these resource assets, a lot of the economic value out of these investments would flow to institutional investors along with the corporation,” he says.
“By having some of those benefits flow into Indigenous communities, it builds both resilience by giving them financial sovereignty and allows that community to address priorities and needs determined by them, not somebody in Ottawa.”
Opportunities are now happening at the Peerless Trout First Nation.
“Our chief and council are in the best position to decide what works for the 900 members of Peerless Lake when it comes to how to invest the monies from the partnership, whether that’s in housing, education, health care, more post-secondary scholarships or building a hockey arena or community facility,” Letendre says.
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