Suncor Energy has given its final approval for a $3.6- billion expansion as the oilsands giant focuses on boosting production more than 55 per cent by 2008.
The costs for Calgary-based Suncor include $2.1 billion for an upgrader expansion and new coking facilities.
That’s $600 million higher than preliminary estimates the company released last March when the expansion plans were approved by Alberta’s energy regulator.
Suncor said the extra costs resulted from the increasing scope of the project, which will produce an extra 20,000 barrels a day over earlier plans, to 350,000 barrels per day in 2008 – up from the current average of 225,000.
Suncor’s longer-term strategy is to increase production to more than 500,000 barrels a day by 2012. To that end, the company said it will raise its capital spending plans for 2005 by 47 per cent to $2.5 billion, to pay for production growth and modifications at its two refineries.
Workers facing layoffs at a petrochemical plant told Premier Ralph Klein last week that his government’s policies threaten their industry’s future.
“We want (Klein) to support the petrochemical industry and right now we don’t see that happening,” said Mike McKinney of the Communications, Energy and Paperworkers union.
About 10 union members tried to confront Klein on the issue at a Tory-friendly event in Sherwood Park, just east of Edmonton, as he campaigned in advance of Monday’s election.
Starting next year, between 250 and 300 workers will lose their jobs when Celanese Canada shuts an Edmonton plant that has produced cigarette filters for the Chinese market.
The union says those jobs will be transferred to plants in Mexico and Belgium, and will eventually be located in a new plant being built in China.
Pipeline operator Enbridge Inc. is going south with a $613-million US purchase of Shell’s natural gas network in the Gulf of Mexico south of Louisiana and Mississippi.
The purchase involves interests in 11 pipelines totalling 2,380 kilometres in five corridors that carry three billion cu. ft. per day – half of the Gulf’s deep-water gas production.
The “moderate-sized acquisition,” funded by debt, will add $30 to $40 million Cdn to earnings in 2005, offset by interest expense, executives of Calgary-based Enbridge told analysts.
Shell Gas Transmission – to be renamed the Enbridge Gulf Offshore System – “immediately establishes Enbridge as a major natural gas transporter in the Gulf, one of the key regions for continental supply growth and an area with significant potential for undiscovered natural gas reserves,” said CEO Patrick Daniel.
The assets being purchased from Shell US Gas & Power LLC will be added to Enbridge’s other gas transmission assets – the Alliance line from northeastern B.C. to Chicago, and the Vector line between Chicago and Dawn in southwestern Ontario.
Daniel said the deep-water Gulf is estimated to contain 100 trillion cu. ft. of recoverable gas, and a gas price of $3 to $4 US per 1,000 cu. ft. “will result in continued strong activity” by producers.
EnCana Corp. plans to rein in its growth rate in 2006 to make its share value more sustainable over the long term, its chief executive says.
“We’ve been growing at these 15-per-cent levels and this year it’ll be higher,” CEO Gwyn Morgan told reporters after a session with investors and analysts last week in Calgary.
The goal for the next five years is to keep the value of EnCana stock growing by 10 per cent annually. Nothing will be decided until next June, but Morgan said slowing the development rate would involve a combination of lower production and buying back outstanding EnCana shares.
EnCana earlier this year began a “strategic realignment” to focus on its core North American assets. The company is returning to its roots as a nearly pure-play North American natural gas company following a decision to sell its 40-per-cent stake in the promising Buzzard North Sea oil development.
The overseas interest is being sold to fellow Calgary energy company Nexen Inc. in a $2.1-billion US deal.
TransAlta Power LP says it has signed a deal to acquire an indirect stake in a Saskatchewan cogeneration power plant for $55 million.
The income trust also moved to increase its cash distributions 78.48 cents per unit to 79.5 cents beginning with the monthly distribution Dec. 31.
Under the deal announced last week, TransAlta Cogeneration, LP, in which TransAlta Power has a 49.99-per-cent interest, will purchase TransAlta Corp.’s 50-per-cent interest in the gas-fired plant for $110 million. The electricity produced by the plant is sold to SaskPower under a power purchase agreement that includes the cost of gas and expires in December 2024.
Petrofund Energy Trust says it has closed a $28-million deal for oil and gas properties in Alberta’s Willesden Green area.
The trust says the deal includes total proven plus probable reserves of three million barrels of oil equivalent (boe). Production is more than 450 boe per day.
“This acquisition expands on Petrofund’s existing assets in the Willesden Green area and we see significant potential to increase production from these properties over the next several years,” the company said.
Canadian Superior Energy Inc., which plans to resume drilling in offshore Nova Scotia early next year, is reporting a third-quarter loss of $2.3 million.
The loss for the quarter ended Sept. 30 amounted to two cents a share and compared with a loss of $6,000 or zero cents per share a year earlier, the Calgary-based company reported. Oil and gas revenue was up two per cent at $9.3 million.
Canadian Superior, one of the largest energy stakeholders off Nova Scotia, is facing several lawsuits in the United States and Canada over allegations that it issued “false and misleading statements” regarding the Mariner offshore well.
The company announced in March that it plugged and abandoned its $30-million US Mariner offshore well with its partner, El Paso.
