Canadian Energy Centre
Terra Nova back producing oil, benefits to flow for Atlantic Canada communities and world energy security
The Terra Nova floating production, storage and offloading (FPSO) vessel. Photo courtesy Suncor Energy
From the Canadian Energy Centre
By Will Gibson
‘You should see it start to make a real impact on the market by 2025’
The Terra Nova offshore oil project sits about 350 kilometres southeast of St. John’s in the deep blue waters of the Atlantic.
And even though St. John’s Mayor Danny Breen can’t see the field and its massive floating, production, storage and offloading (FPSO) vessel from his office at city hall, he’s pleased it’s back to producing oil.
“There’s lots of numbers you could use to demonstrate Terra Nova’s contribution to our province and community, from the royalties and taxes it generates for governments or the jobs and contracts it provides to people and businesses,” says Breen.
“But it’s important for our psyche to see the FPSO back in production. To see it come back after some delays is great news for the province and the offshore industry.”
Suncor Energy CEO Rich Kruger announced in late November that Terra Nova’s FPSO vessel had restarted production after undergoing an extensive makeover in Spain to improve reliability and extend its life.
The massive vessel — standing 18 stories high and three football fields long — first started operating in 2002 and has produced more than 425 million barrels of oil, or enough to meet world oil demand at current levels for just over four years.
While the FPSO was in Spain, additional subsea work took place in the middle of the Atlantic to extend the Terra Nova field’s life, including replacing two million kilograms of mooring chain that anchors the ship to the underwater drilling system.
The project is forecast to extend the life of the Terra Nova project by 10 years and produce an additional 70 million barrels.
Phil Skolnick, Eight Capital’s managing director of research, sees Europe and Asia as potential destinations for those barrels when the project ramps up to full production.
Asian oil demand is rising, and Europe is now taking higher volumes of oil imports from countries other than Russia, its primary supplier before the start of the war in Ukraine.
“You should see it start to make a real impact on the market by 2025, when Terra Nova is expected to get back to producing 180,000 barrels per day,” he says.
“It will have a big impact for the Newfoundland economy.”
Even when the FPSO was in drydock in Spain, Terra Nova continued to provide benefits to the community at home.
In the third quarter of 2023, the latest period available, the project reported it spent $173.8 million in operational and capital expenditures.
This included $52.2 million in procuring goods and services, with 62 per cent spent with suppliers in the province and 94 per cent with Canadian vendors.
Terra Nova provides 710 direct jobs with 90 per cent of its workforce residing in Newfoundland and Labrador. The project is a partnership operated by Suncor, which holds a 48 per cent stake. The other partners are Cenovus Energy (34 per cent) and Murphy Oil (18 per cent).
While wind, hydrogen and other energy projects have been proposed in Newfoundland and Labrador, Breen sees the offshore oil industry as a crucial part of the province’s economy now and in the future.
He believes Terra Nova and the other three producing oil fields in the province — Hibernia, Hebron and White Rose — will assume added importance for the local economy and global energy security.
“Oil is going to be around for a long time, even if demand decreases, because it is an essential part of so many products we use today. And that’s important for us because the offshore industry supports many families across Newfoundland and Labrador today,” Breen says.
“The industry has been under a lot of scrutiny and has faced a lot of challenges, particularly in the approval for new projects. Keeping the production from approved supplies is going to be vital. That’s why it’s good to see the investment in Terra Nova and the return to production. That bodes well for the future.”
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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