Strathcona Update Buyer Seller Forum
Strathcona Update Buyer Seller Forum Industrial Heartland Supply Chain Opportunity Gerry Gabinet Director Economic Development and Tourism Strathcona County
Agenda Who we are: • Stats Canada Update
• What is the Heartland What we do for Heartland Projects • Shell , Enbridge, Kinder Morgan • Sasol, Suncor, Access, Northwest Redwater Partnership • Keyara, Interpipeline, MEG Energy,
10/30/2012
2
Heartland Advantage • • • •
At the cross roads of Alberta’s pipeline systems Road, rail and air logistical centers in the region Pre-zoned industrial lands Capital region has the workforce and infrastructure to support development • Synergistic opportunities with existing industrial base • Water availability in the North Saskatchewan river • Center for Carbon Capture and Storage
10/30/2012
3
10/30/2012
4
10/30/2012
5
10/30/2012
6
Existing Industrial Base • Canada’s largest hydrocarbon processing center home to 15 world scale facilities responsible for 43% of national basic chemical manufacturing • Major center for – Petroleum Refining (400 Mbdp capacity) – Bitumen Upgrading (250 Mbdp expanding to 400 Mbpd capacity) – Petrochemical Production (Ethylene, Styrene, Fertilizers) – Natural Gas Fractionation and Processing – A variety of other specialty products • Approximately $1 billion in annual expenditure (excluding feedstocks) • 7,500 full time direct employees
10/30/2012
7
Pipelines and Terminal Activities • Kinder Morgan- Expansion of Trans-Mountain pipeline. New tanks in SIA • Enbridge Pipelines –Terminal and starting point for Northern Gateway project New pipeline and tanks for the Heartland Area • Inter-pipeline – Polaris diluent terminal and pipeline expansion • Access Pipeline – 42” dilbit pipeline to add 350,000 bpd capacity (potential for future expansions) • Keyera Energy – Diluent pipeline connection • Pembina and Canexus – Pipe to rail transfer point for incoming diluent and outgoing bitumen 10/30/2012
8
Major Investment Announcements 1. Northwest Redwater Partnership –
Bitumen Refinery
$5 billion
2. Williams Energy – –
Off-Gas pipeline and Fractionization Propylene PDH facility
$500 million $700 million
3. Pembina Pipelines –
NGL fractionization expansion
$ 600 million
4. Sasol –
Gas to Liquids facility
$ 8 billion
5. MEG Energy –
Bitumen “Viscosity Reduction” facility
$100 million
6. Keyera –
De-ethanizer addition
$ 110 million
7. BA Energy –
Bitumen upgrader continuation
10/30/2012
$ 3 billion 9
Shell Refinery
Shell Upgrader Expansion One
Shell Chemicals
Construction storage
10/30/2012
10
Sasol Update Sept. 5
Optioned the site from Total. Future study required for 48,000 bpd facility. If built 5,000 construction jobs, 500 fulltime jobs. 10/30/2012
11
the Canada GTL Project
New Market for Domestic Natural Gas 48,000 bpd = 500 mmcf/d natural gas use 96,000 bpd = 1 bcf/d natural gas use
10/30/2012 Copyright @ 2012, Sasol Canada
12
18
project timeline
10/30/2012
13
Did you know facility lifecycle costs? 1. Capital cost (Capex) of the project 2. Typical operating annual and operating costs average 2-3% of installed cost of upgrader ($5.0B -$6.0B) 3. Annual sustaining capital costs average 2% over the 30 to 50 year life of each project
10/30/2012
14
Typical Process Configurations Offsites and Utilities • Electrical Distribution • Cooling Water • Flare System • Fuel Gas • Effluent Treating • Boiler/Power • Control Rooms • Buildings • Interconnecting Pipelines • Tank Farm • Blending/Loading Racks • Plant Air
Process Units • Diluent recovery • Vacuum • Deasphalt • Coking • Hydrocraking • Hydotreating • Gas recovery unit • Gas Sweetening Units • Sulphur recovery • Hydrogen Production • Sour Water Stripping • Coke Gasification
10/30/2012
15
Typical Upgrader/Refinery Cost Breakdown Equipment % of installed cost • Heaters 2 • Heat exchangers 5 • Vessels 7 • Pumps 7 • Compressors 1 • Mechanical equipment 1 Bulks • Structural Steel 2 • Piping 13 • Electrical 5 • Instruments and controls 2 • Insulation and paint 2 Total 47%
10/30/2012
16
Massive opportunity Capital Construction
Pressure vessels, industrial furnaces, cooling towers/heat exchangers
43% of $3.5 Billion $1.5 Billion CDN
Instrumentation & control systems
12% ~ $420 million CDN
Pumps & gas compressors
6% ~ $74 million CDN
Engines
2% ~ $70 million CDN
Steel Pipe & Tube
1% ~ $35 million CDN
Valves
1% ~ $35 million CDN
• •
Assumption 50,000 bpd upgrader/refiner ~ $5 Billion CDN Equipment represents 70% of total cost = $3.5 Billion CDN
10/30/2012
17
What is Carbon Capture and Storage (CCS)? •Capture from industrial facilities •Transport via pipeline •Storage deep underground •Storage options – Depleted gas reservoirs – Oil reservoirs in tertiary recovery (EOR) – Deep geological formations with porous rock (basal cambrian)
10/30/2012
18
Shell Quest CCS Project
Quest CCS Project - Joint Venture among Shell (60%); Chevron (20%); and Marathon (20%)
Quest is a fully integrated CCS Project: capture, transport, inject, store & monitor CO2
Capacity to capture over one million tonnes of CO2 per year or 35% of current emissions
Equivalent of taking 175,000 vehicles off the road
CO2 will be transported by pipeline and stored over 2 kms underground
10/30/2012
19
Turn Around Activity $50 Million upwards • • • • • •
Suncor Dow Shell Scottford – four turnarounds Agrium Sheritt Keyara- Alberta Envirofuels
10/30/2012
20
10/30/2012
21
Petrochemical Growth Opportunities • Alberta Petrochemical industry has been growth limited due to shrinking volumes of feedstocks • Increasing volumes of feedstocks are coming on line : – “Vantage” pipeline to North Dakota of 40,000 bpd of ethane – “Off-Gases” potential of 160,000 bpd – Growing liquids rich shale gas deposits in Alberta and NW British Columbia
• Advancement to propylene derivatives • Provide first opportunity in decades to sustain and grow the industry across Alberta. 10/30/2012
22
Investment Opportunity Analysis
Derivative Ranking Results 8 7.0
7
6.9 6.1
6 5
7.1
4.9 4.4
5.3
4.3
4
7.0
7.2
7.0
6.6
6.5
6.1
6.3
6.0
5.5 5.1
5.1 4.5 4.1
4.5
4.9
4.6
4.8
4.6
4.1
3 2 1 0
10/30/2012 23
7.0
23
5.9
Summary • Work with the local Economic Development office for meetings/working relationships • Follow the Major Projects list of Government of Alberta • Work with Garret from AIH (starting Nov. 5) • Attend trade shows such as this and CERI, CAPP
10/30/2012
24
Agenda Who we are: • Stats Canada Update
• What is the Heartland What we do for Heartland Projects • Shell , Enbridge, Kinder Morgan • Sasol, Suncor, Access, Northwest Redwater Partnership • Keyara, Interpipeline, MEG Energy,
10/30/2012
2
Heartland Advantage • • • •
At the cross roads of Alberta’s pipeline systems Road, rail and air logistical centers in the region Pre-zoned industrial lands Capital region has the workforce and infrastructure to support development • Synergistic opportunities with existing industrial base • Water availability in the North Saskatchewan river • Center for Carbon Capture and Storage
10/30/2012
3
10/30/2012
4
10/30/2012
5
10/30/2012
6
Existing Industrial Base • Canada’s largest hydrocarbon processing center home to 15 world scale facilities responsible for 43% of national basic chemical manufacturing • Major center for – Petroleum Refining (400 Mbdp capacity) – Bitumen Upgrading (250 Mbdp expanding to 400 Mbpd capacity) – Petrochemical Production (Ethylene, Styrene, Fertilizers) – Natural Gas Fractionation and Processing – A variety of other specialty products • Approximately $1 billion in annual expenditure (excluding feedstocks) • 7,500 full time direct employees
10/30/2012
7
Pipelines and Terminal Activities • Kinder Morgan- Expansion of Trans-Mountain pipeline. New tanks in SIA • Enbridge Pipelines –Terminal and starting point for Northern Gateway project New pipeline and tanks for the Heartland Area • Inter-pipeline – Polaris diluent terminal and pipeline expansion • Access Pipeline – 42” dilbit pipeline to add 350,000 bpd capacity (potential for future expansions) • Keyera Energy – Diluent pipeline connection • Pembina and Canexus – Pipe to rail transfer point for incoming diluent and outgoing bitumen 10/30/2012
8
Major Investment Announcements 1. Northwest Redwater Partnership –
Bitumen Refinery
$5 billion
2. Williams Energy – –
Off-Gas pipeline and Fractionization Propylene PDH facility
$500 million $700 million
3. Pembina Pipelines –
NGL fractionization expansion
$ 600 million
4. Sasol –
Gas to Liquids facility
$ 8 billion
5. MEG Energy –
Bitumen “Viscosity Reduction” facility
$100 million
6. Keyera –
De-ethanizer addition
$ 110 million
7. BA Energy –
Bitumen upgrader continuation
10/30/2012
$ 3 billion 9
Shell Refinery
Shell Upgrader Expansion One
Shell Chemicals
Construction storage
10/30/2012
10
Sasol Update Sept. 5
Optioned the site from Total. Future study required for 48,000 bpd facility. If built 5,000 construction jobs, 500 fulltime jobs. 10/30/2012
11
the Canada GTL Project
New Market for Domestic Natural Gas 48,000 bpd = 500 mmcf/d natural gas use 96,000 bpd = 1 bcf/d natural gas use
10/30/2012 Copyright @ 2012, Sasol Canada
12
18
project timeline
10/30/2012
13
Did you know facility lifecycle costs? 1. Capital cost (Capex) of the project 2. Typical operating annual and operating costs average 2-3% of installed cost of upgrader ($5.0B -$6.0B) 3. Annual sustaining capital costs average 2% over the 30 to 50 year life of each project
10/30/2012
14
Typical Process Configurations Offsites and Utilities • Electrical Distribution • Cooling Water • Flare System • Fuel Gas • Effluent Treating • Boiler/Power • Control Rooms • Buildings • Interconnecting Pipelines • Tank Farm • Blending/Loading Racks • Plant Air
Process Units • Diluent recovery • Vacuum • Deasphalt • Coking • Hydrocraking • Hydotreating • Gas recovery unit • Gas Sweetening Units • Sulphur recovery • Hydrogen Production • Sour Water Stripping • Coke Gasification
10/30/2012
15
Typical Upgrader/Refinery Cost Breakdown Equipment % of installed cost • Heaters 2 • Heat exchangers 5 • Vessels 7 • Pumps 7 • Compressors 1 • Mechanical equipment 1 Bulks • Structural Steel 2 • Piping 13 • Electrical 5 • Instruments and controls 2 • Insulation and paint 2 Total 47%
10/30/2012
16
Massive opportunity Capital Construction
Pressure vessels, industrial furnaces, cooling towers/heat exchangers
43% of $3.5 Billion $1.5 Billion CDN
Instrumentation & control systems
12% ~ $420 million CDN
Pumps & gas compressors
6% ~ $74 million CDN
Engines
2% ~ $70 million CDN
Steel Pipe & Tube
1% ~ $35 million CDN
Valves
1% ~ $35 million CDN
• •
Assumption 50,000 bpd upgrader/refiner ~ $5 Billion CDN Equipment represents 70% of total cost = $3.5 Billion CDN
10/30/2012
17
What is Carbon Capture and Storage (CCS)? •Capture from industrial facilities •Transport via pipeline •Storage deep underground •Storage options – Depleted gas reservoirs – Oil reservoirs in tertiary recovery (EOR) – Deep geological formations with porous rock (basal cambrian)
10/30/2012
18
Shell Quest CCS Project
Quest CCS Project - Joint Venture among Shell (60%); Chevron (20%); and Marathon (20%)
Quest is a fully integrated CCS Project: capture, transport, inject, store & monitor CO2
Capacity to capture over one million tonnes of CO2 per year or 35% of current emissions
Equivalent of taking 175,000 vehicles off the road
CO2 will be transported by pipeline and stored over 2 kms underground
10/30/2012
19
Turn Around Activity $50 Million upwards • • • • • •
Suncor Dow Shell Scottford – four turnarounds Agrium Sheritt Keyara- Alberta Envirofuels
10/30/2012
20
10/30/2012
21
Petrochemical Growth Opportunities • Alberta Petrochemical industry has been growth limited due to shrinking volumes of feedstocks • Increasing volumes of feedstocks are coming on line : – “Vantage” pipeline to North Dakota of 40,000 bpd of ethane – “Off-Gases” potential of 160,000 bpd – Growing liquids rich shale gas deposits in Alberta and NW British Columbia
• Advancement to propylene derivatives • Provide first opportunity in decades to sustain and grow the industry across Alberta. 10/30/2012
22
Investment Opportunity Analysis
Derivative Ranking Results 8 7.0
7
6.9 6.1
6 5
7.1
4.9 4.4
5.3
4.3
4
7.0
7.2
7.0
6.6
6.5
6.1
6.3
6.0
5.5 5.1
5.1 4.5 4.1
4.5
4.9
4.6
4.8
4.6
4.1
3 2 1 0
10/30/2012 23
7.0
23
5.9
Summary • Work with the local Economic Development office for meetings/working relationships • Follow the Major Projects list of Government of Alberta • Work with Garret from AIH (starting Nov. 5) • Attend trade shows such as this and CERI, CAPP
10/30/2012
24
