September 2013 FREE Volume 6 Issue 4

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A3Kerrobert to get massive crude-by-rail terminal

B1Entrec hauls largest highway load ever in Alberta

B9Port of Churchill working on pilot shipment

By Brian ZinchukPipeline News

Kerrobert, Calgary – Dirt work is expected to begin shortly on Saskatch-ewan’s largest crude-by-rail facility to date.

Hot on the heels of a flurry of recent announce-ments for large, unit-train scale crude-by-rail loading facilties for Edmonton and Hardisty, TORQ Trans-loading Inc. announced on Aug. 14 it will be building one of the largest of them all, if not the very largest.

Headquarted in Calgary but with roots in Shaunavon, TORQ is building a facility ap-proximately seven miles southeast of Kerrobert. This is in addition to exist-ing TORQ operations at Instow (near Shaunavon), Southall (near Bromhead), Unity and Lloydminster.

The placement is very strategic in nature. It’s immediately adjacent to Plains Midstream and In-ter Pipeline Fund terminals, each with two pipelines leading to them. Then there is the granddaddy of all pipelines, the Enbridge mainline, which the two existing pipeline terminals are connected to. Finally there’s a Canadian Pacific Railway line, the key component to a crude-by-rail facility. Kerrobert is at a “Y” junction on the CPR track, and a short hop to the company’s northern mainline track.

TORQ CEO Jarrett Zielinski noted, “In the location selection process for the Kerrobert Rail Terminal, we took the scale-at-hub approach. We feel that Kerrobert is strategic in that it allows maximum diversity and flexibility for crude-by-rail out of Western Canada. It is as far south and east geographically in Canada that allows us to not only access vast amounts of pipeline delivered crude oil, but also it allows us to access significant quantities of heavy, undi-luted crudes in the Lloydminster-Kerrobert corridor. Kerrobert, Saskatchewan, is geographically as close to the heavy crude’s natural destination markets as possible by rail, minimizing transportation costs relative to similar crude types to be shipped by rail originating further north and west in Alberta. Our esti-mation is that the Kerrobert Rail Terminal could offer transportation savings to the U.S. Gulf Coast and East Coast upwards of $5 per barrel compared with shipping similar crudes by rail out of certain locations in Alberta.”

Zielinski spoke with Pipeline News on Aug. 14 by phone, detailing the project.

Unit train loading TORQ has three quarters of land either purchased or optioned next to

those terminals. They intend on building both a loop track and “ladder tracks,” (straight portions of track) for train movement.

The loading itself will take place in an enclosed environment. They will run two straight tracks side-by-side for loading, and the building will be 10 cars long. That will allow for 20 cars to be loaded at once, out of the elements.

Crude-by-rail in Canada started out a few years with just a few cars loaded at small scale sites. But as with grain elevators and the grain transportation

system 15 years ago, there is now a rapid shift to unit trains to achieve maximum efficiencies. The same mar-ket forces that saw con-crete grain terminals built throughout the Prairies appears to be coming to the burgeoning crude-by-rail industry.

The facility is scaled to load two full-sized 120-car unit trains per day, similar to what Gibson Energy has recently announced at Hardisty. Based on a maximum capacity of 700 barrels of oil per car, that puts the facility’s planned throughput at up to 168,000 barrels per day. However, Zielinski expects their cars to be loaded in the 600 to 625 barrel range each.

While the cars can hold up to 700 barrels each,

heavy oil is by definition heavier, and there are weight restrictions on how much weight can go into each car, depending on the route it is taking.

“We believe, at full operational capacity, it should be one of the largest facilities announced to date,” Zielinski said.

Torq is planning on building up to 500,000 barrels of storage capacity, in the form of 100,000 barrel tanks. The plan is to start with one heated insulated tank at first, and then add more as required. Heating will be accomplished with glycol heating and a natural gas heating plant.

“Heavy, undiluted crude comes in at a heated temperature, i.e. 70 C. We are essentially maintaining that heat.”

Heavy oil, generally speaking, does not flow well unless either heated or diluted. Since it is impossible to heat long-distance pipelines, heavy oil is traditionally diluted with copious amounts of diluent. That diluent is essentially dead space in the shipment – if first must be purchased, then added to the shipment. It takes up room in the shipment, then is must be removed at the destination, often to be shipped back. The practice is so commonplace, “dilbit,” or diluted bitumen, is the key product out of the Canadian oilsands.

Removing the need for diluting heavy oil shipments goes a long way in TORQ’s business case. By heating the oil and shipping it in cars that can then be heated at the other end of the journey, oil companies don’t need to buy dilu-ent, nor do they need to ship it back and forth in a never-ending cycle.

“Much of the impact can be made up by unit train capacity. Several dollars per barrel saving can be achieved by unit train economies of scale.

Page A9

Briefs courtesy Nickle’s Daily Oil Bulletin

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Canadian Pacifi c Rail-way is investigating the cause of a derailment of sev-en cars carrying crude oil in Lloydminster.

Th e accident happened north of 52 Street at 40 Ave-nue around 5 p.m. on July 26 when a CP train was mov-ing cars in the Lloydminster yard

Th ere were no injuries or public safety risks and no leaks of oil from any of the derailed cars. 

Th e incident also in-cluded a locomotive, which lost some diesel fuel.  How-ever, the fuel was contained around the engine and was removed.

  CP spokesperson Ed Greeberg said the impacted cars were up righted over the weekend and the product transferred.  Th e cars were then moved back into the yard by Monday.

 An investigation is un-derway to determine the cause and what lead to the cause. 

By Geoff LeePipeline News

Regina – TransCanada Corporation’s proposed $12 billion En-ergy East pipeline could be the fi rst major pipeline project for-warded in recent years to carry oil produced in Saskatchewan.

TransCanada is pursuing regulatory approvals to construct and operate Energy East pipeline and terminal facilities in early 2014.

Premier Brad Wall said Energy East will add more poten-tial pipeline capacity to TransCanada’s proposed Keystone XL and Enbridge’s Northern Gateway projects and deliver a range of direct economic benefi ts to the province.

“Th is is important to us for a number of reasons,” said Wall during an Aug. 1 news conference in Regina on his reaction to the Energy East project moving ahead.

“You heard our government, you heard me speak out about Keystone, and speak out about gateway. We’ve supported both pipelines.

“Actually, there would be little likelihood of Saskatchewan oil in either of those pipelines, but we supported them because we need to move western Canadian oil to tidewater.”

Wall said Energy East will help solve that problem and gen-erate more revenue for Saskatchewan producers and the prov-ince by getting better prices for oil produced in the province.

He said the diff erential between world Brent pricing and West Texas Intermediate that Western Canadian producers get, deprived the province of about $300 million in revenue in last year’s budget.

Wall said the lower price for Saskatchewan oil also costs the industry billions of dollars that could be reinvested in the economy.

“So it was a big deal even without Saskatchewan oil in the pipeline – so this in an even bigger deal with the TransCanada announcement today because there is every expectation our producers and going to be able to tie into the pipeline,” he said.

“Additionally, there will be some investments in southeast Saskatchewan in terms of terminal capacity, so there is direct economic activity.”

Th e Energy East pipeline will have a capacity of approxi-mately 1.1 million barrels of day of crude oil and is anticipated to be in service by late-2017 for deliveries in Québec and 2018 for deliveries to New Brunswick.

TransCanada based its decision to go forward after securing 900,000 bpd of pipeline supply in long term contract commit-ments.

“Th is is an historic opportunity to connect the oil resources of Western Canada to the consumers of Eastern Canada, creat-ing jobs, tax revenue and energy security for all Canadians for decades to come,” said TransCanada president, Russ Girling.

Th e project involves converting nearly 3,000 kilometres of TransCanada’s existing Canadian Mainline to crude oil service and constructing approximately 1,400 kilometres of new pipe-line.

Th e project also calls for the construction of a new terminal and a pipeline connecting the Moosomin compressor station in Saskatchewan with Cromer, Manitoba.

Th ere would also be a tank farm built near Moosomin to store crude oil destined for the pipeline.

“In terms of direct impact, we’re going to see jobs in Sas-katchewan as they build these terminals to accommodate the moving of more Saskatchewan oil to the east coast,” said Wall.

Page A10

MBAB

BC

YT

SK

NT NU

ON

QC

NS

Existing Pipeline Conversion

New Pipeline Construction Terminals

Hardisty

Québec City

Montréal

The existing gas pipeline system consists of several individual pipes running in parallel with each other. This project will entail the conversion of just one of those individual pipes.

Briefs courtesy Nickle’s Daily Oil Bulletin

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rackenent@hotmail.com

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The recent acquisition of high netback, low decline assets in southeast Saskatch-ewan provide TORC Oil & Gas Ltd with a material new core area characterized by long established low decline rates and significant light oil infrastructure underpinning the balanced go-forward strategy of TORC. Manage-ment has identified over 130 net undrilled development locations, of which only 41 are booked in the year-end 2012 reserve report. The as-sets to be acquired produce more than 5,700 boepd (93 per cent light oil and liq-uids) and yield significant free cash flow that will be deployed to fund a disci-plined organic growth pro-gram in the Cardium play and at Monarch.

TORC management has extensive experience in southeast Saskatchewan and anticipates a smooth opera-tional integration. TORC’s second half 2013 capital ex-penditure program includes the drilling of an estimated five (four net) development wells. In addition to the sig-nificant identified undrilled development drilling inven-tory, management believes that numerous opportunities exist on the acquired assets to further manage decline rates and maximize free cash flow from these assets.

By Brian Zinchuk

Rocanville – Many people might think Bakken forma-tion development is new to Saskatchewan, but in the Ro-canville area, it’s a very old story. Some of the first Bak-ken wells in Saskatchewan were drilled there, with well licences south of the town going back as far as 1959. Some of those wells are still producing. But with the very large Potash Corporation of Saskatchewan mine just a few miles northeast of Rocanville, further drilling nearby has stopped.

It turns out oil and pot-ash development don’t mix. With the potential of an oil well disturbing the integrity

of the mine, possibly leading to flooding, both the lives of the miners and the existence of the mine itself would be at risk.

It was with this in mind that the NDP provincial gov-ernment under Roy Romanow in the mid-1990s set up a substantial drilling exclusion area around the Rocanville mine. Now, some 18 years on, freehold mineral rights own-ers are seeking compensation, and the NDP, now in opposi-tion, has taken up their cause. Deputy leader Trent Wother-spoon spoke to Pipeline News on Aug. 12 about their take on the matter.

“You have mineral rights holders (whose) ability to seek compensation out of

their mineral rights is in lim-bo. They can’t get any return on those mineral rights that they are holding. This is a cir-cumstance that needs to be addressed.

“Government has bro-ken a promise,” Wother-spoon said. “It’s particularly shameful that the Sask. Party went out on the eve of the 2007 election and made very straightforward promises and commitments to mineral rights holders that they would resolve this. Here we are, six years later, with no meaning-ful action from government.

“We’re calling for a time-ly response from government to bring the parties together and find a fair solution that respects the mineral rights

holders that are affected.Welding and machine

shop owner Scott Norton is with the Rocanville Pot-ash Restricted Drilling Area committee, which was first formed in 2007. There are approximately 190 people in the no-drill zone, and about half of those have contrib-uted membership dues to the committee, according to Norton.

“Back in ’95-’96 the NDP passed a law saying there couldn’t be any explora-tion within a certain area,” he said. “That rendered our oil and gas rights useless.”

The area covers approxi-mately 107,000 acres, he said.

The Ministry of Energy and Resource’s infomap of Saskatchewan wells shows a number of wells drilled in the area at the time.

At the time, Norton and his wife were in the process of having oil developed on their land. “I came within six months of collecting royalties on oil,” he said.

“I leased my mineral rights in 2005. There was a well on an adjoining quarter,” he said.

The oil company had six months to drill a well on his land or pay royalties, he said. That neighbouring well ended up being capped.

Norton is one of a number of rights holders who are re-ceiving potash royalties. They started coming in roughly 2010 or 2011, he said. Asked if seeking compensation for both was double dipping, he said, “Because we’re getting one thing shouldn’t trump an-other. Potash shouldn’t trump oil and gas.”

He recognizes that no one wants to flood the mine, but asked, “Why not lease the mineral rights for oil as well?

Page A11

Publisher: Brant Kersey - EstevanPh: 1.306.634.2654

Editorial Contributions: SOUTHEASTBrian Zinchuk - Estevan 1.306.461.5599

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NORTHWESTGeoff Lee - Lloydminster 1.780.875.5865

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SOUTHEAST & NORTHWEST• Estevan 1.306.634.2654 Cindy Beaulieu Candace Wheeler Kristen O’Handley Deanna Tarnes Teresa Hrywkiw

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CONTRIBUTORS• Estevan - Nadine Elson• Saskatoon - Josh Schaefer• Virden - Harley McCormickTo submit a stories or ideas:Pipelines News is always looking for stories or ideas from our readers. To contribute please contact your local con-tributing reporter.

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Published monthly by the Prairie Newspaper Group, a divi-sion 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 sub-mitted 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 permis-sion 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 infor-mation 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.

Seldom in the Canadian media do you see such overwhelming support for a mega project, yet that is exactly what occurred when TransCanada an-nounced they have enough support to go ahead with the Energy East project. Nearly all the talking heads spoke of how using Canadian oil to supply Canadian refineries is nation-building at its finest.

With Energy East, TransCanada is taking a page out of its existing playbook. Several years ago it took one of its existing mainline pipelines that has been used to transport gas for five decades, and repurposed it to transport oil. It became the original Keystone pipeline. Now, with gas prices bottomed out for sev-eral years and the remainder of its gas mainline pipes running at a fraction of their capacity, the intention is to convert another gas line to oil use.

By extending the system to Quebec and New Brunswick, Canadian refineries will be able to purchase Canadian oil. With 1.1 million barrels per day committed to the project, it will almost certainly displace the 700,000 barrels per day of oil Eastern Canada imports. With a deepwater export port being built at St. John, a substantial volume of Western Canadian oil, beyond what is already shipped out of Vancouver via the Kinder Morgan Trans Mountain line, will have the ability to reach tidewater.

Producers will have access to higher priced mar-kets, and Canadian refiners will have access to lower-priced oil. We’re not exactly sure how that works, but both seem to like the idea.

Once completed, Canada will become essentially

energy self-sufficient. No matter what happens in the Middle East, you will still be able to fill up your tank in Fredericton. Strategically, this is a huge plus.

We will also be less beholden to the American markets. Instead of sending nearly all our exports to the U.S., with no other options, we can sell it elsewhere to the highest bidder. So long Cushing glut.

In the meantime, the industry is finding its way around the Keystone XL holdup. We were astonished this month to add up the numbers and realize that Saskatchewan is on track (pun intended) to have more crude-by-rail capacity than its entire oil production within about a year.

That is assuming that all the current crude-by-rail facilities stay in operation, and that the new ones recently announced are carried out particularly at Ker-robert, Northgate and Lashburn. If they are all built, it means Saskatchewan will theoretically have the capac-ity to ship by rail every drop of oil it produces, with enough spare capacity to take care of the equivalent of most of another Bakken boom. We’re not sure how Enbridge is going to feel about that, or how they will respond.

With TransCanada planning on a 16-inch line from Cromer to feed its planned Moosomin terminal as part of the Energy East project, Saskatchewan may soon go from one export option of a few years ago – the Enbridge mainline, to several – Enbridge, rail and Trans-Canada. That will be the biggest shakeup in our export capability since Enbridge, under its former name of Interprovincial Pipe Line, got rolling over 60 years ago.

If you stay in the news business long enough, you will find that people can stretch numbers to tell any message they want. We saw that in late July from President Barrack Obama.

In a New York Times interview published July 27, Obama said, “Republicans have said that this would be a big jobs generator. There is no evidence that that’s true. And my hope would be that any reporter who is looking at the facts would take the time to confirm that the most realistic estimates are this might cre-ate maybe 2,000 jobs during the construction of the pipeline – which might take a year or two – and then after that we’re talking about somewhere between 50 and 100 [chuckles] jobs in an economy of 150 million working people.”

Let’s look at this for a second. In 1999-2000, I worked on building the Alliance Pipeline, a project very similar in scope and scale to the Keystone XL. I worked on a spread of about 600, when you added contractor, sub-contractor and Alliance personnel. There were three spreads working on the project in Canada, and several more in the U.S. This does not count all the work that went into manufacturing the pipe (tying up then-Ipsco’s production for well over a year), coating it and transporting it. Then there was the supply and building the heavy equipment (mostly Caterpillar) and trucks (Peterbilt, Kenworth, Western Star, etc.) used in the project. Nor does it count the full hotels and restaurants, the campers and trucks to

pull them that were purchased by the workers. How could you spend $5 billion on Alliance and

not create jobs? How can you spend $7 billion on Keystone XL and not do the same?

So far we are just talking about the construction of the project, not the 13 years hence of gas drilling and production in Canada, accompanied with its end use at Aux Sable near Chicago. One does not simply receive up to 5,350 mmcf of liquids-rich natural gas each day and do nothing with it.

Interestingly enough, Alliance is now in the process of adding a North Dakota lateral to receive gas that is otherwise being wastefully flared – a direct benefit to the U.S. This is similar in concept to the North Dakota/Montana on-ramp that was added to the Keystone XL project – allowing American pro-duction to make use of a line that was originally only intended for transporting Canadian production.

Let’s get back to Obama’s chuckling about “50 to 100 jobs in an economy of 150 million working people.” Keystone XL is slated to carry about 0.9 per cent of global oil production each day. What do you do with it at the other end? Just let it sit there? Col-lect in tanks?

It takes thousands of people to process, and then use, all that oil, everything from the refinery engineer along the Gulf Coast to the gas jockey in Arkansas who pumps it into your tank. One could say those jobs will exist no matter where the oil comes from, but the

fact is the oil has to come from some-where.

And while Americans might not count Cana-dian jobs created, they should. Nearly each and every worker on the project, in the oilsands where most of the oil comes from, or the American Bakken where the balance of the oil will originate, drives a truck. Because the jobs pay well and are demanding, those trucks are almost all newer, more expensive versions. Thousands upon thousands of Fords, Chevies, Dodges, and even the odd Toyota are purchased by workers or companies in the oilpatch. All of those trucks were built in North America, mostly in the U.S. Do the auto workers count in the job numbers?

So will Keystone XL create 50 jobs, or 40,000? Depending on how you define it, the answer is some-where in the middle to higher end. It most certainly is not 50.

The point appears moot, however. Obama’s July 27 comments are the clearest indication he will kill the project. We, as Canadians, must move forward on Enbridge’s Northern Gateway, Kinder Morgan’s TransMountain Expansion, and TransCanada’s Energy East projects. The only jobs Obama is going to allow Keystone XL to create is in studying and op-posing it.

Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net

The day had started off pleasantly – a clear, hot, windless day in Saskatchewan. But that had changed by the early evening. We were driving back from Melfort on Highway 6 in the early hours of an August evening this summer when I noticed stopped vehicles ahead. More road construction was my first thought. My daughter, her small children, and I had been stopped several times for road construction on our way up to Melfort for a day of remembrance and visiting with my deceased mother’s remaining three siblings. The oldest in the family were meeting the youngest in the family for the first time.

The car carrying my father and other relatives were well ahead of us as we had stopped to attend to the baby a number of times. I approached the line of stopped vehicles and stopped as well. It was then that I realized that it was not road construction that had us stopped.

A livestock transport truck was parked facing me on the shoulder of the opposite lane with a horse trailer parked on a 45 degree angle to it on an ap-proach. Looking ahead of the stopped traffic, I could see a police vehicle and an ambulance in the shoul-der of our lane. “This is not good,” I spoke under my breath to my daughter.

And it wasn’t. As the line of vehicles was allowed to move, I soon saw the cause of the obstruction. A

livestock transport trailer and semi were turned over in the ditch. But the next sight stopped my breath completely. Pig bodies were heaped up in a huge mound by the side of the road, their motionless bodies a pale contrast to the ditch now dark with churned up mud and earth.

Later, at my relatives’ house in Regina, where we caught up to the rest of the family and where we were all spending the night, we spoke of the tragedy. My aunt wondered aloud how the accident had happened. None of us had seen any other vehicles other than the semi and trailer. She then theorized that the driver must have fallen asleep.

I nearly choked on my tea. Seriously? She actually thought that?

However, I remembered that while commercial truck operators must now comply with the National Safety Code and provincial regulations that include driver, vehicle and operational related safety regula-tions, it perhaps wasn’t always that way. Some truck drivers did likely drive many more hours than were safe to do so in the past and got into trouble as a result.

“I hardly think so,” I replied to my aunt. “It was more likely something distracted the driver. Either he was distracted or something else caused trouble for the driver of the semi unit by their distracted driving!”

Statistics back me up. Despite education and legislation, the number of fatal collisions where distraction is cited as a cause have risen 17 per cent in Canada during the five year period 2006-2010 accord-ing to numbers from Transport Canada.

CBC News reported that studies estimate that 30 to 80 per cent of collisions are due to distracted driving. Distracted driving includes eating, drinking, grooming, and reading while operating a vehicle, but cellphone use is widely accepted as the important contributor to this percentage. Saskatchewan’s SGI recently released their statistics for the most recent year, and in 2012, distracted driving became the num-ber one cause of fatal collisions in our province for the

first time. For years and years, the number one cause of fatal

collisions in Saskatchewan was the impaired driver, and as a result there sprang up educational programs, police blitzes, safety commercials and fines to deter this behaviour. It would appear that we need a shift in mentality regarding cellphone use while driving, simi-lar to the shift we needed to make regarding driving while impaired.

If we don’t, our governments will help us to make this shift with education and deterrents. Currently, Saskatchewan has the largest fine at $280 for cell-phone use with four demerit points while operating a vehicle, among the stiffest penalties in the country but increases to this fine are possible to deter behaviour.

MLA Darryl Hickie, chair of the provincial traffic safety advisory committee, wants us to keep in mind that our behavior of answering phones and texts while driving ultimately impacts our families. Saskatchewan is looking at suspending licences for distracted drivers. That would definitely impact our oil and gas busi-nesses, in addition to our families.

The Alberta government campaign earlier this year used humour to get the difficult message out. This campaign used a succession of “Crotches kill” posters picturing smiling drivers staring into their laps, their faces lit by the blue glow of their cellphones. “We know what you’re doing down there,” the poster read.

In recognition of the National Trucking Week September 1-7 celebrating the 28,000 people em-ployed by the trucking industry in Saskatchewan, which is 5 per cent of our labour force, and the fact that 95 per cent of the goods moved in Saskatchewan depend on trucks, let us all commit to driving undis-tracted. We will all be safer for it.

Nadine lives in Estevan with her husband and fam-ily, and shifted gears a few years ago, becoming a hot shot driver for the oilpatch. Her people skills are put to good use in the patch as she delivers the goods quickly and efficient-ly. Contact her at shifting.gears.hotshot@gmail.com with comments or questions.

With the focus of this month’s paper being general oilfi eld maintenance, I felt like an introduction to an undersold and not well understood coverage would be appropriate. Equipment breakdown (or boiler and ma-chinery) insurance provides coverage for the accidental breakdown of equipment. Th is type of coverage is dif-ferent from property/casualty insurance for businesses.

For example, your property coverage would cover property damage in the event of a fi re. Your casu-alty insurance would cover your business if someone tripped in your offi ce or factory. But what would cover your expensive production equipment, or computer hardware should it become damaged?

Here’s an example: everything is going fi ne with your business. Th en a storm blows through and knocks out the power; your production and computer systems all shut down. On start-up, a power surge courses through your electrical system and fries the circuitry in two pieces of production equipment and cooks the motherboard in three of your desktop computers.

You call your broker and fi nd that you had pur-chased equipment breakdown coverage. You are told: “Property/casualty policies only cover damages to your equipment from ‘external’ causes, such as a fi re, a fl ood, hail, or windstorm. Property/casualty policies do not cover damage from ‘internal’ causes such as mechani-cal failure of the equipment, electrical short circuit, motor burnout, centrifugal force, a boiler overheating or cracking, and mechanical breakdown. Coverage for these types of losses requires a ‘Boiler and Machinery’ insurance policy.”

You may not be a manufacturer, or even have a boiler in your building; however equipment breakdown insurance is still a critical component of all small busi-ness insurance packages.

For example, breakdown coverage not only pro-vides protection for electrical system failures, but it also provides coverage for air conditioning and refrigera-tion systems, telecommunications, mechanical equip-ment, security and fi re detection systems, diagnostic equipment, inventory control systems, fi red hot water

heaters and boilers. Today, more than ever, offi ce systems, as well as

production equipment, contain fragile electronic com-ponents that are subject to more frequent and more costly breakdowns than traditional mechanical equip-ment. Th e speed of business (online, “just-in-time” delivery) makes any downtime at all a critical issue.

Computerization means that you and your staff are more often than ever working off -site, and should the mobile equipment that you use break down or be stolen, you need a fi x or replacement fast.

Some of the questions I get asked include the fol-lowing:

Does equipment breakdown insurance cover me if my software gets a virus?

No. Equipment or mechanical breakdown insur-ance policies are for “hardware” insurance, and is not “software” insurance. Th at means that if your produc-tion equipment or computers suff er some sort of physi-cal damage, equipment breakdown insurance covers that.

However, if your production equipment’s com-puter modules, or your desktop computers become inoperable due to software problems, such as “bugs” or “viruses,” these situations are not covered by your equipment insurance policy.

Th is type of loss usually requires a diff erent type of coverage, such as cyber insurance. Cyber insurance also goes by the names of: e-commerce, e-business, or a variety of other names.

My production equipment is covered by warran-ties and service contracts. Why do I need equipment breakdown insurance?

Although warranties and service contracts provide some protection, they do not cover many of the com-mon causes of equipment breakdowns. For example, typical maintenance contracts cover routine service such as periodic calibrations and other adjustments, and possibly cleaning, etc. However, such contracts do not pay for damages due to operator error, for example. Your equipment breakdown policy does cover such

losses. Likewise, war-ranties and maintenance contracts do not pay for loss of income that results from equipment breakdown; nor do they pay for spoilage, damage to surrounding property or extra expenses to restore operations. Buying equipment breakdown insurance is critical as it covers all of these risks.

I don’t own the building, so why do I still need equipment breakdown coverage?

As a tenant you may not be responsible for the building’s electrical, air conditioning or heating sys-tems, but it is important to check your lease to be sure you are not responsible for the equipment that services your premises. If you are not responsible for these systems, your business operations and income are still dependent upon equipment of others. If the electrical, heating or cooling system of your landlord broke down, the interruption of those services can impact you. So, getting the right equipment breakdown coverage is es-sential to protect you even in contingencies like this.

How much boiler and machinery insurance should I buy?

Each business is unique and so your equipment breakdown insurance should be tailored to your precise needs. For example, if the destructive potential of some of your equipment is low, (contrast this with equip-ment such as boilers, pressure vessels and some water heaters, which can produce enough power to dam-age huge sections of the building), then less coverage would be needed.

As always, review all your risk exposures care-fully and consult your insurance broker to determine if optional insurance protection is available to meet your needs.

Harley McCormick is a Virden, Man. based insurance broker with 10 years in the industry. He can be reached at hmccormickfca@mymts.net.

When it comes to oilfi eld maintenance, plant turnarounds

are at the top of the food chain for their importance to operations, production and overall economic impact.

A perfect example is the major 45-day major maintenance turnaround at the Lloydminster Husky Upgrader taking place in September and early Octo-ber.

A plant turnaround like Husky’s is typically the most signifi cant portion of a plant’s yearly mainte-nance budget because of the loss of production and the expense that is incurred.

Th e big fall turnaround at the upgrader comes on the heels of a 25-day turnaround this past spring at the Husky asphalt refi nery.

Some of the services required at a refi nery turn-around include boiler repairs and erection, heat exchanger repairs and custom tube bending.

Th e positive impacts of turnarounds are an in-crease in equipment asset reliability, continued produc-tion integrity, and a reduction in the risk of unsched-uled outages or catastrophic failure.

Th e Lloydminster upgrader was built in 1992 and converts heavy oil into Husky synthetic blend, ultra-low-sulphur diesel, and diluents.

It has a lot of parts and operating units that need a regular overhaul in order to maintain safe and effi cient operations.

In 2010, Husky conducted is largest fall turn-around in the history of the upgrader, involving more than 2,000 employees and contractors.

“It’s a major, major piece of our community so in terms of people coming, it’s going to put some pres-sure on in some places, but it’s great for restaurants and great for the city,” said Lloydminster Mayor Jeff Mulligan in 2010.

Th e economic impact of that turnaround was highly visible as it took place during the 2010 heavy oil show in the city as there were no vacancy signs in motels and hotels for miles around.

It was like a cruise ship had come to dock, bring-ing wealthy tourists to spend money.

Th is year’s turnaround is not quite that large but all the hotels, room rentals and restaurants will experi-ence another boom at a time of the season that is tradi-tionally the shoulder season for the hospitality industry.

Turnarounds are a boon for safety companies and suppliers and companies providing on site services from crane and equipment rentals to piping fabrication and repairs.

Th ere is also demand for a wide range of special-ized services such as welding, bolting, cold cutting and fl ange facing to name just a few.

Turnarounds provide high pay work for electri-cians, millwright, insulators, pipefi tters, ironworkers, carpenters, sheet metal workers and labourers among others.

Th e downside is an increase in traffi c and noise, but those are signs of prosperity that most residents can accept for a few weeks each year.

Plant turnarounds are also a continuous planning process for companies like Husky, with multiple turn-around assets to maintain.

Planning includes such things as naming a turn-around manager to preparing an initial budget cost estimate, determining the work breakdown schedule, and the cost control structures.

Th e project management also requires an orga-nizational breakdown structure, support plans and a fi nalized detailed schedule, detailed cost estimates, and plant shutdown dates.

A turnaround also requires a follow-up evalua-tion, completion of reports, documents and debriefi ng meetings.

Th e work doesn’t end with the turnaround as the next turnaround cycle takes eff ect.

A well functioning upgrader is another strong sign of the positive economic impact that the oil and gas industry has on Lloydminster.

In April 2013, the upgrader shipped its 500 mil-lionth barrel of fi nished product.

Th at likely wouldn’t have happened without these regular well planned turnarounds that also help to maintain the economy of the entire community.

It’s an impact that everyone can credit to their own bottom line.

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The other end of the line is also in TORQ’s sights. The company is look-ing at building its own unload terminal on the Gulf Coast, in the area of Port Arthur, Texas, a very short distance or so from the oil’s final destination. At that point, low-cost, local diluent can be added to the heavy oil to allow it to flow by pipeline to any number of facilities. Another option would be to load the oil onto barges for water-borne transportation to its final destination, again, undiluted.

“We’re working on a downstream initiative as well that will enable us to complete the loop,” Zielinski said. That will allow TORQ to provide a com-plete solution for heavy, undiluted barrels.

Back in Kerrobert, up to 200 jobs are expected to be created during con-struction. Once complete, Zielinski said about 50 full- and part-time jobs will

be created. In order to handle all the additional bodies during construction, he said they will be building a camp on site.

The project is expected to cost approximately $100 million for its first phase, and the full build-out will bring that figure up to $115 to $120 million.

“We are privately funded, and intend to stay that way,” he said. Goulet Trucking of Dollard (near Shaunavon) is a sister company, and will

provide some of the trucking into the terminal. Zielinski expects that at most, half of the oil shipped through the Kerrob-

ert Rail Terminal will orginate in Alberta. The majority will be Saskatchewan oil. Initially oil will be trucked in, but eventually a substantial amount will come to the terminal via pipeline.

“Dirt is being moved in the fall and it will be completed as soon as we can next spring,” he said. Operations are expected to begin around September or October 2014.

Crude-by-rail saw a phenomenal rise to pipe-line constraints and substantial discounts in land-locked oil in North America. In recent months, however, that differential has greatly shrunk.

“Many of our customers had locked up long term deals. We saw our spot business reduced. Our spot business represents a very small portion of our business. We saw a small reduction on volumes being shipped. But as we look at forward pricing, September onward, that spot business is coming back.

“It’s as if the industry took a small breather and is back on track, from our perspective.”

Differentials are driven by several temporary items, one being the Syncrude turnaround. But Zielinski, added, “Without crude-by-rail, pipeline apportionment would go back to record levels.”

“Crude-by-rail is having the effect it’s sup-posed to. It’s helping clear the market. Crude differentials are going to find that happy medium. The differentials are the tightest they’ve been in 12 months, or more, and you’re already seeing partial apportionment on the Enbridge system. That’s not a coincidence.”

Crude-by-rail has been referred to by many in the industry as a “relief valve.”

Zielinski said, “I would support that theory.”As for other new, large loading facilities, Zie-

linski said, “A lot of facilities are being considered right now. I don’t think they all have merit.

“We take a slightly different approach. We are building a large-scale facility in Saskatchewan. It will be pipeline connected, at a Saskatchewan hub.

“We will have access to heavy, undiluted barrels, too. The general consensus of the longev-ity of crude-by-rail is diluent avoidance. What we haven’t heard today is important. Is anybody building an undiluted crude terminal? That’s what we’re doing.”

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Page A4

“It means taxation directly from the pipeline and very significantly, it means we can maximize the price for selling our oil. Right now, we sell at a discount for our American friends.”

Wall said Eastern Canada im-ports approximately 700,000 bpd of higher priced oil from the Middle East due to lack of pipeline capacity serving Canadians.

He noted that until recently that price was as much as $11 per barrel higher than the price of our own oil produced in Western Canada.

“That is going to change. It will certainly help this in the long term and it’s good for the rest of Canada because they don’t have to buy oil that isn’t Canadian and is at a higher price,” said Wall.

“I was down in March in Wash-

ington and lobbying for Keystone because, even though it doesn’t have Saskatchewan oil, for the reasons I just mentioned, it’s important to us as well from a price standpoint.”

TransCanada’s Girling also contends that Energy East is just one solution for transporting crude oil and industry in relying on additional pipelines such as Keystone XL to transport growing supplies of Cana-dian and U.S. oil to markets.

“Both pipelines are required to meet the need for safe and reliable pipeline infrastructure and are un-derpinned with binding, long-term agreements,” he said.

Wall said it is also important for Canada to act like it is a national and international energy player and develop our own energy transporta-tion infrastructure.

“What we meant by that, is we

need to move oil across our coun-try and be proud of the fact we are an emerging energy power, and act like it, in terms of getting oil from where we produce it to tidewater,” he explained.

Alberta premier Alison Redford also threw her support behind Trans-Canada’s plans to proceed with the Energy East pipeline to Quebec and New Brunswick refineries.

“I am very pleased with today’s announcement that Energy East is moving forward,” said Redford on Aug. 1.

“My government made a com-mitment to the project as part of our efforts to build new markets and get a fairer price for the oil resources Albertans own.

“This is truly a nation-building project that will diversify our econ-omy and create new jobs here in Alberta and across the country.”

Wall told the media his govern-ment has been very supportive of Al-berta’s and New Brunswick’s efforts to back Energy East.

“I also want to express support for premier Pauline Marois in Que-bec because they play a role in this, and they have also, I think, been very constructive in this particular pipe-line,” he said.

Marois, however, has since stated that she promises to “consult”

Quebeckers on economic, safety and environmental issues pertaining to Energy East.

“There’s a role in terms of the en-vironment, in terms of safety, provin-cially and federally, and we take that role very seriously,” said Wall.

“Pipelines of course, are one of the safest ways – many would argue the safest way to transport oil, but not without risks.”

Girling said Energy East will be “designed and operated with a singu-lar focus on safety,” given the public awareness about pipeline safety dur-ing the ongoing review process for Keystone XL.

“We have a TransCanada pipe-line company that has an excellent track record. The alternative is in-creased reliance on rail,” said Wall.

“We are doing more rail in Saskatchewan and it certainly can be done safely. It is been done safely, but many would argue that transporting through pipelines is as safe as you can find.

“We’ll work with the company through our respective ministries. The feds will makes sure that Trans-Canada pipeline continues to do what they have done as an operator which is to operate at an optimal level in terms of safety and environ-mental awareness,” Wall concluded.

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He added that in the coal area around Estevan, they have oil wells in areas that have surface mines.

“We’re not trying to harm anybody or get rid of the no drill zone, but pay us something.”

Back in 1996, he said mineral rights for oil were running around $10 per acre, and now are $25 per acre.

He noted that royalty rates are 2.4 per cent for potash, a frac-tion of what oil royalties currently run at.

Norton said the group is seeking a straight lease of $10 per acre per year, starting retroactively in 1996 and indexed from there, “until they lift the no drill zone.”

Allan Johnston is a grain broker north of Welwyn. He and his wife have land in the Welwyn area. They have freehold mineral rights on five quarters of land, but no oil wells on it and, as of yet, no potash mined under it. Due to flooding issues between his property and the existing mine, he doesn’t expect any potash devel-opment on his land for a long time, if ever.

“They’re drilling all around us. They can’t drill because of the buffer zone,” he said, adding some oil wells in the area were shut down in the 1990s.

“We don’t want to drill here and cause trouble for the mine,” Johnston said.

“We all have friends and relatives working there. We don’t want to drill. You just have to compensate us. ”

Just prior to the 2007 election, the group were told by Brad Wall, who was running for premier at the time, that their concerns would be addressed.

Norton said, “We tried to negotiate with the government in 2008 and 2009 and got ab-solutely nowhere. They told us to go to court.”

The group hired Regina lawyer Tony Merchant, who spe-cializes in class-action lawsuits. His successful cases include Indian residential schools and the 2001 North Bat-tleford water crisis. However, Merchant found they couldn’t sue for compensation, so Norton said, “We fired him last spring.”

“It’s retarded. It’s

criminal,” Johston said.“Brad Wall said he’d

help us,” he said, then noted the province then later said the mineral rights owners should sue them.

Johnston said they’ve had little help from local Saskatch-

ewan Party MLA Don Toth, saying he was “absolutely useless.”

“The government can do whatever they want, but they have to compensate you.”

He added that be-yond the mineral rights, landowners also are foregoing surface lease revenues.

Both Norton and Johnston said oil was encountered in digging the initial mine shaft, as well as the most recent one.

One of the poten-tial issues with provid-ing compensation to freehold mineral rights owners for oil develop-ment that never hap-pened in one area is that the government could then be flooded with similar requests throughout the prov-ince. Then there is the issue of how much oil is actually in the ground within the no drilling area. Is there actually oil under all 107,000 acres? And how would

you determine that if you can’t drill for oil in the first place? Seismic surveys show where there is the potential for oil, but as anyone in the industry knows, there’s lots of potential for dry holes, too.

In 2008, T-45 Oil Corp., a small startup company drilled a well right in the heart of the Bakken near Kisbey. While there was oil all around it, their well proved uneconomic.

Page A12

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Page A11Asked about such scenarios, Wotherspoon said an independent arbitrator

would play an important role. He noted, “It would set some level of precedent.”There would need to be evidence brought to bear in seeking compensation,

he said, adding, “There has to be a better solution.”Norton said, “Anybody in a no-drill zone should get compensation.” He added there aren’t many freehold mineral rights holders in other areas

of the province with potash development. Minister responds

Minister responsible for Energy and Resources Tim McMillan spoke with Pipeline News on Aug. 15 regarding the PRDAa’s concerns.

“Our position is this prohibition on drilling was put in place about 20 years ago for safety. When there’s individuals underground, having a water leak is one of the biggest safety issues.”

At that point, there certainly were some loose ends not tied up. Now it’s 20 years later, and issue is still an active one.

“There is a court case still before the courts, which makes my comments somewhat measured and limited.”

Even though the group says they no longer have a lawyer, McMillan stressed, “It is before the courts still. Where they are as individuals, I can’t speak to. But we have checked – is it before the courts? And the answer is yes.”

Asked if there were instructions given to “sue us,” McMillan said he had no knowledge of that.

“I know how incredibly careful officials are in giving legal advice. I would find it doubtful they would.

“The courts are the ultimate arbiter of property rights. I know I’m giv-ing vague answers, but when it’s before the courts, anything specific is off the table.”

“I will not minimize this as an issue or the importance of it. The individu-als affected asked for and received a meeting with our officials recently on a

without prejudice basis. That was a meeting re-cently where they could talk freely in a structured environment.”

He said that meeting took place within the last year, but he wasn’t sure exactly when.

Asked about cases where freehold rights own-ers would like to get paid for both potash and oil royalties, McMillan said, “I think it comes back to a certain amount of property rights and the law. In legal terms, the issue put forward does matter. I’m not a lawyer on how that is balanced out, but I think there is precedent in British common law.

“This is the type of thing that is very complex. All of those issues are part of this conversation.

“This is something we have resources in the ministry working on today, trying to find out who has what rights, who has multiple rights, what the legal ramifications of all these scenarios are. It is very complex and there are substantially different groups whose rights would potentially be in dif-ferent positions. That work is ongoing, and that’s about as far as I can go.

“We can’t control the court process or the speed it will go forward.”

“There may be possibilities of moving some pieces forward and not others, but I wouldn’t want to get ahead of where we are as a government trying to act responsibly with a complicated issue that’s been in place for a long period of time.

“If it was easy to solve, it would have been solved in the ’90s, or early 2000s. We have work to do to get there.”

“We are one player involved here, but we are just one,” McMillan concluded.

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By Brian ZinchukEstevan – Saskatchewan is undergoing a

phenomenal build-out of crude-by-rail capacity, so much so that if it all gets built, this province theoretically would no longer need pipelines. There would be enough crude-by-rail capacity to ship every drop of Saskatchewan-produced oil in rail tanker cars, and then some.

TORQ Transloading is seeking to position itself as the largest, by far, transloading operator in the province. The company already has transload-ing facilities throughout the province. Instow, near Shaunavon, has a facility with an 18,000 barrels per day capacity, of which about 5,000 to 6,000 is currently used. Southall, near Bromhead, has a capacity of 19,500 bpd and is using around 5,000 bpd. Lloydminster is running closer to its 25,000 bpd capacity, running at about 18,000 to 19,000 bpd. Unity currently has a 26,000 bpd capacity and is running at about 13,000 bpd, but that facility will soon be bumped up to 40,000 to 50,000 bpd, with 120 car unit train loading capacity. Combined, that totals 131,500 barrels per day capacity.

Now add in the 168,000 bpd maximum capac-ity of the Kerrobert Rail Terminal that is set to begin construction very soon. That brings TORQ’s capability to ship crude by rail to 280,500 bpd by roughly this time next year.

Put into perspective, Saskatchewan’s oil produc-tion has recently been running around the 475,000 barrels per day mark, after spending much of the last decade hovering around 425,000 barrel per day. If TORQ builds out all of its announced planned facilities to full capability, they alone could theo-retically ship 59.1 per cent of Saskatchewan’s oil production.

But wait! There’s more! Ceres Global Ag. Is currently building its own Northgate Hub, which, if built to full planned capacity, will be able to handle 70,000 bpd as well as unit trains.

Crescent Point Energy has its own loading facilities in Stoughton. At 45,000 bpd capac-ity, it is currently the largest operating facility in the province. They also have one at Dollard (near Shaunavon), which is being expanded to 12,000 bpd, with an additional 120,000 barrels of stor-age in the works. After being stung by pipeline apportionments and shutdowns, the company has adopted crude-by-rail in a big way.

Page A14

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Altex Energy operates a 26,000 bpd facility at Lashburn with room for 143 tank cars. It is undergoing an expansion to be able handle 350 cars, and

transload 60,000 bpd. At Unity, they have a 19,000 bpd capacity, and a further 3,000 bpd ca-pability in Lloydminster.

Savage Companies recently added a 21,000 bpd facility in Unity.

CN has its own

transloading facilities at Willmar and Bien-fait. The most recent numbers we were able to find on Willmar was a 15 car per day load-ing capacity, or roughly 9,000 bpd. The site has room for approximately

30 cars now, so that may be higher. The Bienfait transloading facilty was recently expanded, but generally speaking only a few tanker cars are seen there at any particular time.

CPR was loading crude-by-rail in Este-van, but that seems to have diminished as the trucking company that had been doing that run hasn’t hauled a load into Estevan in months. In January 2012 they had a capability of roughly 9,000 bpd.

Arrow Reload Sys-tems loaded their first cars in Kerrobert last January. With a capabil-ity of loading 10 cars per day, they can handle 6,000 bpd.

Are there more? Possibly. New sites and expansions are cropping up almost every month. Additionally, this list does not count new facilities in the works just across our borders

at Cromer, Man. and Hardisty, Alta. But based on the numbers above, and assuming all these announced facilities are built out to their full specifica-tions, Saskatchewan will have the ability to ship 532,500 barrels per day of crude-by-rail. That’s roughly 56,500 bar-rels per day more than our entire production capacity. Put another way, if all these facilities are fully built out, every take away pipeline in Saskatchewan could be shut down, and there would still be capacity to spare.

When you con-sider the “Bakken boom” added roughly 70,000 bpd in production, that 56,500 bpd in addition-al capacity is enough to handle another boom of similar size.

Three years ago, there was effectively no crude-by-rail in Sas-katchewan.

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By Geoff Lee

Bonnyville – The Cold Lake Air Weapons Range (CLAWR) is a unique and challenging environment for oil and gas companies and their employees to conduct daily operations.

The Royal Canadian Air Force at 4 Wing Cold Lake conducts live fire training exercises on the range so access and movement within CLAWR is strictly controlled.

Reporters, who took part in an Aug. 8 tour of Canadian Natural Resources’ Primrose oilsands sites where bitumen is leaking to the surface, were advised not to photograph the security gates.

Range control projects co-ordinator and military liaison Brad Williamson from Cenovus Energy explained access and policy issues during an orientation at CNRL’s Wolf Lake administration office, located 55 kilometres north of Bonnyville.

Williamson is a member of the Cenovus Range Control Safety and Co-ordination Team that is charged with the responsibility of granting access to all people involved in oil and gas activities on CLAWR.

Page A16

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“As a range control officer, what we do is ensure that the military and the oil and gas in-dustry remain separate,” said Williamson.

“We also control the access for the oil and gas industry get-

ting onto the range and making sure that everyone that is on the military range is ac-counted for working for the oil and gas industry.

“Every single per-son who goes onto the range must have an ori-entation prior to going on the range so they are aware of all the hazards and all the boundar-ies that are required to keep them safe.”

Williamson said contrary to popular be-lief, the Air Force is not dropping any weapons near oil and gas opera-tions or facilities within CLAWR.

“They are well de-fined and well separated and the two do not mix at all,” he said.

Cenovus and CNRL are the largest oil and gas companies in the area, along with pipelines owned and operated by Enbridge and TransCanada Cor-poration.

“We are very proud of our safety record. We keep everyone very safe,” said Williamson.

“All the people on the range are aware of the hazards that go with working on a military range.

“For the most part, they don’t see very much of the military because we do a good job of keeping them separated.”

Major Craig Ekstrom, a deputy wing operations officer and an F-18 pilot who flies sorties on the range, said the military target area is well-defined

from the oilfield.“The area is sepa-

rated. We ‘deconflict’ on a daily and weekly basis to make sure that the targets that we are go-ing to drop on through CLAWR control – that they’re aware and they keep the oil and gas workers away,” he said.

Ekstrom, whose call sign in the air is Ekky, said the weapons that are dropped are inert with no explosives in them.

“We have cement that simulates the large Mark 80 series bombs,” he explained.

“We also have small modular bombs that are steel and contain a little smoke charge so that we can spot the strike.

“We also have laser-guided bombs that again are steel and have a little smoke charge in them so we can spot those.

“They simulate the real thing, but there’s no explosion and there’s no other materials.”

Ekstrom has been an F-18 pilot for 15 years at 4 Wing and he called weapons training fun.

He also had no argument with the assumption that the weapons range and adjacent oil and gas activities make for unusual work partners with communication being paramount for safety.

“It’s a good rela-tionship, but it’s got its co-ordination to make both work,” he said.

Page A17

Page A16“Not many people

do understand the intricacies of how much co-ordination needs to happen to make both events occur.”

Mike Catley, CNRL’s vice president of conventional and thermal operations in Calgary, said under-standing and complying with Department of National Defence rules makes it easy to work at CLAWR.

“We work well with the DND up here. I think it shows that government and the oil industry can work well together,” said Catley.

What grabs Catley’s attention, however, is the abundance of wild-life as CLAWR is under restricted access to the public.

During the orienta-tion it was noted that due to its restricted status, there are more bears in CLAWR than anywhere else in Al-berta.

“There’s wildlife up here. There are quite a few bears up here. You see them along the ditch lines quite often,” said Catley.

“The only people that can hunt up here are the First Nations group out of Cold Lake.”

The Cold Lake First Nations has been grant-ed access to CLAWR under an agreement with 4 Wing Cold Lake for traditional hunting,

trapping, fishing and berry picking activities.

Jocelan Ladner, an environmental field co-ordinator with CNRL in Lloydminster, said she’s seen lot of other wildlife besides bears during the clean-up operations at Primrose.

“There is a long list. Part of what we’ve done is we take observations about what wildlife they’ve seen,” she said.

“There’s caribou, moose, beaver, muskrats – a whole variety of dif-ferent birds. I’d have to give you a list of prob-ably 40 different birds that have come through here,” said Ladner.

CNRL crews have taken extra precau-tions to keep animals out of four leak sites at Primrose although by the tour date, CNRL’s total death count was 27 birds, 23 small animals and 71 frogs.

Ryan Cameron, a project site leader where bitumen was discovered leaking to the surface from fissures on June 8, said fencing is the key to preventing more animal contact with bitumen.

“There are three components to our wildlife fencing. There’s a bottom portion that’s like a woven fabric. That helps us keep the frogs and amphibians out,” he said.

“Above that there is an orange fencing that helps the larger animals. Above that, there is a

layer of rope and on the rope there is Mylar flag-ging. It makes noise to keep the birds away.”

There are also noise devices like loud can-nons and decoys of coy-otes and foxes to help deter other animals.

The company col-lected approximately 7,300 barrels of bitumen emulsion from the four affected sites since the first leak was detected and reported to the Al-berta Energy Regulator on May 20.

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CAVECAVE

By Geoff LeeKerrobert – The town

of Kerrobert is about to become a major oil transportation hub with plans by TORQ Trans-loading Inc. to a build a $100 million crude-by-rail terminal in the area.

The Kerrobert Rail Terminal that will be

served by Canadian Pacific Railway, will be engineered to handle two, 120-car unit trains per day or up to 168,000 barrels per day.

The transloading facility will be located about eight kilometres southeast of the town.

The project follows the construction earlier this year of a crude oil transloading facility that is operated by Arrow Reload Systems Inc. on Railway Avenue in Ker-robert.

The new TORQ project was announced Aug. 14 and put Mayor Erhard Poggemiller over the moon with the prospects for economic spinoffs.

“As far as I’m con-cerned – great, because it’s more people around here,” said Poggemiller.

“The town is grow-ing and with growth comes a whole bunch of

other issues, but we have to contend with that.

“We’ve got some housing developments and stuff going on here for people to rent or to buy.”

Poggemiller said he heard the news that morning from the RM of Oakdale, because it’s

in their jurisdiction.“The municipality

may have passed a bylaw that they could even do this,” he said.

“It’s right where Enbridge is out of town. They bought some farm land there.”

The Kerrobert Rail Terminal will be located near Enbridge’s Ker-robert pumping station for the Alberta Clipper pipeline.

TORQ is negotiat-ing multiple pipeline connections to accom-modate delivery of both light and heavy crudes to the new terminal.

Jarrett Zielinski, TORQ’s CEO, said the company took a “scale at hub approach” in the location process for the new terminal in Ker-robert.

“We feel that Ker-robert is strategic in that it allows maximum diversity and flexibility

for crude-by-rail out of Western Canada,” said Zielinski.

“It is as far south and east geographically in Canada that allows us to not only access vast amounts of pipeline delivered crude oil, but also it allows us to access significant quantities of

heavy, undiluted crudes in the Lloydminster-Kerrobert corridor.”

The Kerrobert

terminal will be designed to accept inbound rail back-hauled condensate and is expected to com-

mence operations in the third quarter of 2014 to the delight of Poggemi-ller. Page A20

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Page A19“It’s been talked

about here several times off and on, and off

and on, then I heard it wasn’t going, then I heard it was going,” said Poggemiller.

“Now this morning I heard they’re doing some work out there again. I am assuming

that is going ahead.”The Kerrobert ter-

minal is also designed to handle significant volumes of oil by truck with on site storage for up to 500,000 barrels of oil for both heated (for undiluted heavy crude) and non-heated crude.

Poggemiller says the potential for in-creased oilfield traffic causing further damage to Highway 51 running east-west through town

will be diminished by various infrastructure projects.

“The road is pres-ently closed through the town because we are changing the water line,” he said.

“The ‘Highways’ are going to pave it in

2015. That’s when the paving program is sup-posed to go on High-way 51 going west.

“That will be upgraded to a primary weight standard, so hopefully it will be able to carry the load.”

Highway traffic will also increase by late 2014 when SaskPower is expected to begin the construction of a new 138 kV substation at Superb, 14 kilometres

southwest of Kerrobert.The local construc-

tion boom comes at a time when all of Kerrobert’s motels and hotels are booked solid.

“We need another one. We have a guy in-terested in setting it up, but all this stuff takes time,” said Poggemiller.

“I welcome the activity – you bet.”

TORQ said its new Kerrobert terminal will allow the company to access significant quan-tites of heavy undiluted crude oil in the busy Lloydminster-Kerrobert corridor.

The company also said Kerrobert is “geographically as close to the heavy crude’s natural destination mar-kets as possible by rail” which will minimize transportation costs relative to oil shipped by rail from north and west Alberta.

“Our estimation is that the Kerrobert Rail Terminal could offer transportation savings to the U.S. Gulf Coast and East Coast upwards of $5 per barrel com-pared with shipping similar crudes by rail out of certain locations in Alberta,” said Zie-

linski.“We are extremely

proud to be working with CP Rail again to provide the producer and refiner communi-ties with what we feel will be the most eco-nomically advantaged crude-by-rail terminal in Canada with abun-dant access to heavy crudes seeking premium markets.”

TORQ also has Saskatchewan opera-

tions in the Shaunavon, Unity and Bromhead areas.

One of its affili-ates, Goulet Trucking, provides delivery of trucked-in volumes across the network of six crude-by-rail termi-nals in Western Canada.

The Arrow Reload crude-by-rail facility in Kerrobert is located on about a six acre site, which is a stone’s throw from Poggemiller’s KEP Industries supply and manufacturing business.

Asked if his phone is ringing off the hook with the news from Torq, the mayor said, “They are not building there right now.

“Once they are physically doing things, that’s when the phone starts ringing.”

Poggemiller also re-ported the construction of the new $23 million Integrated Kerrobert & District Health Care Centre is about two-thirds complete.

The facility will include acute care and long-term care beds, public health, mental health and addictions services, and 24/7 emer-gency medical coverage.

One Call Will Supply It All

Calgary – Gibson Energy Inc. and its U.S Development Group (USDG) partner plan to build the largest crude-by-rail terminal in Western Canada in Hardisty, Alta.

The new rail termi-nal, due to be operation in March 2014, will handle two unit trains, with up to 120 railcars per day, moving up to 140,000 barrels per day of multiple grades of crude.

“USDG has pio-neered the crude-by-rail concept in key markets across the U.S.,” said Mike Day, vice-presi-dent of USDG during the Aug. 6 announce-ment.

“With the Hardisty Rail Terminal, we have expanded the plat-form to accommodate increasing Canadian production.”

Gibson and USDG have jointly secured sufficient customer term commitments to con-

struct the new terminal which will have pipeline connectivity from Gib-son’s Hardisty terminal.

The Hardisty hub is Canada’s equivalent to Cushing, Okla. With numerous, immense storage tanks as well as underground caverns, it’s the kickoff point for the Keystone pipeline and the proposed Keystone XL pipeline, as well as a major transit point for the Enbridge mainline.

USDG is a Hous-ton-based developer of rail logistics and termi-nal facilities, and Gibson Energy is a midstream energy company based in Calgary.

News of their proj-ect came a week after plans were made public for the Alberta Crude Terminal, a 40,000 bpd crude-by-rail facility in Edmonton.

The demand to transport crude by rail for the export market is quickly growing as producers seek ways to

ease congested export pipelines.

“Our Hardisty Ter-minal is well connected to all the major pipelines coming into and leav-ing the Hardisty area,” said Rick Wise, Gibson’s senior vice-president, operations.

“The development of the Hardisty Rail Terminal provides our customers with more optionality to facilitate crude oil movements across North America,” he said.

Major pipeline pro-posals such as the Key-stone XL and Northern Gateway are facing op-position over safety and environmental concerns which is opening the door to crude-by-rail marketing.

The projects are not deterred by the oil train explosion in Lac-Mégan-tic in July that killed 47 people and led to calls for greater rail safety.

In the wake of the tragedy, Transport

Canada has tightened its safety regulations and imposed a ban on one man crews with danger-ous goods.

The Hardisty Terminal will served by Canadian Pacific Railroad’s North Main Line and will provide Canadian producers with an efficient means

to access major refining and distribution markets across North America.

“Canadian Pacific is pleased to work with USDG and Gibson in providing the capability to move crude to market via rail,” said CP mar-keting executive Tracy Robinson.

“The capacity, flex-

ibility, market access and speed to market that rail offers makes it an important option for the transportation of crude.”

USDG and Gibson are continuing their discussions with several customers regarding fur-ther crude oil commit-ments to the Hardisty Terminal.

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By Geoff LeeBonnyville – It will cost Canadian Natural Resources Ltd. approximately $40

million to clean up bitumen emulsion leaking to the surface at four sites in their Primrose oilsands operations north of Bonnyville.

The company had spent $10 million by the time a media tour was held on Aug. 8, the first time reporters were allowed on site, prompting questions about CNRL’s transparency.

A contrite Steve Laut, president of CNRL, faced the media at a small unnamed lake at Primrose South where crews were cleaning up an oily emulsion entering the lake bottom through fissures.

“Really, as you know, we take responsibility for this incident to happen. We caused it and are responsible for it,” said Laut.

“We are very sorry it actually happened, and we’re doing everything we can here. We are very committed to make sure we get this cleaned up.

“We understand the cost; we know how to prevent it and we’ll get this thing back in shape and make sure this doesn’t happen again in the future. That’s our goal.”

Crews had collected 7,300 barrels of the emulsion from all four sites previous to the day that the media was invited to view two clean up sites within the Cold Lake Air Weapons Range.

CNRL produces bitumen at Primrose East and Primrose South using cyclic steam stimulation with just one horizontal wellbore required for steaming and pro-duction on alternating cycles.

The Alberta Energy Regulator (AER) announced on July 18 that they ordered CNRL to suspend and restrict steaming operations at the four sites until the cause is determined.

Reporters at the scene wanted to know if the AER had any role in calling for the media tour.

“We encourage any company involved in an incident like this to communicate directly with their stakeholders and that includes local Alberta media,” replied AER spokesperson Cara Tobin.

“We actively encourage the company to take on that responsibility.”Tobin was also asked if the AER was satisfied with its own level of transpar-

ency, given its holding back of information to the public AER didn’t publicly disclose the spills until the fourth spill on June 24, after

CNRL reported the first two leaks to the regulator on May 20 and a third leak on June 8.

Tobin explained the fourth leak occurred in the water body which met AER’s criteria for a news release as well as determining whether the incident has a public and environmental impact.

“With every incident we learn more and we are always to improve the transpar-ency from our point of view as the regulator as well as encouraging the companies to improve their transparency as well,” said Tobin.

Tobin said the AER has recently begun to report every incident on its new website within 24 hours an incident being reported to them by oil and gas compa-nies.

“It’s in response to the community wanting more information,” said Tobin, who noted the new reporting tool wasn’t created until AER began operating as Alberta’s new single regulator on June 17.

The initial total impacted area from the bitumen emulsion leaks at Primrose covered 20.7 hectares which had been reduced to 13.5 hectares by time of the media tour.

The rate of seepage had also declined to less than 20 barrels per day. There was also a cleanup crew of approximately 200 workers at the site and another 180 involved in investigative activities.

CNRL believes the cause of the seepage was a mechanical failure of wellbores,

similar to a 2009 leak at Primrose.“In the 2009 incident it was a wellbore that we had drilled for a producer, so it

was a new wellbore,” said Laut.“After we found that leakage, we changed our design on our wells. We changed

our cementing practice and the way we cement the well. We haven’t had any issues since then.

“This one looks like they are old legacy wells that were drilled in the ’90s and some in the ’80s.”

CNRL will investigate potential problem wells at Primrose including former gas, water source wells and stratigraphic wells on site.

A service rig was checking for wellbore damage on one of two vertical strat wells at the Primrose South water site.

Laut said all of the new wellbore casings use thermal cement to prevent the flow of bitumen behind the casings.

Leaks can happen in casing or cement defects in old vertical wells. At Primrose, escaped bitumen under pressure can be forced into natural frac-

tures in the upper Colorado formation and released to the surface.“We are going back and look at every vertical well in our area,” said Laut. “If we

see a yellow flag, we are going to go back and repair that well.”Laut noted that if they can’t repair the well to the satisfaction of AER, they will

change their steaming tactics around that wellbore.“If you change the steaming tactics, you can totally control the amount of pres-

sure. If you go by that wellbore, you will not have (see) this release,” he said.“If there is any good news from this – this is totally solvable and totally man-

ageable.”With steaming restrictions in place, CNRL has begun the production cycle on

the affected single cyclic steam horizontal wellbores.Laut said seepages are rare, but when they do occur, the only option is to man-

age them until the zone is depressurized.“There is no delay in getting the site cleaned up. There are no steps we can take

to stop the leakage,” he acknowledged.The AER has ruled out the use of high pressure steam as a root cause of seep-

age because steam is injected into the producing Clearwater zone and can’t physi-cally penetrate the cap rock above it.

Stopping all steam production at Primrose East and South until the cause is known is not an option.

“We have to follow our investigation and learn the cause and the source of these challenges and steer where we go from there,” said AER team leader Colin Woods, who is based in Bonnyville.

“We put in a steaming restrictions at the all the sites where there was an identi-fied release.

“With the likelihood of it being a mechanical challenge, it would be a broad brush effect just to stop steaming across the entire operation and thousands of wells.”

Woods said it was too hard to say when the cause will be pinned down.“We’ll take it as it comes and we won’t stop until we have,” he said.In the media scrum, Laut admitted CNRL could have done a better job com-

municating news of the leaks to the public, but he said they have complied with all regulatory requirements.

“We’ve been very transparent with recording everything that’s happened to the regulator,” he said.

“I think if you go back and look at hindsight, we weren’t communicating quickly enough to the province.

“That’s a lesson learned from us. That’s why we’re here today to make sure ev-eryone understands what’s going on and get some of that misinformation out of the system,” he said.

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By Geoff Lee

Lloydminster - Mayor Jeff Mulligan surprised everyone at a July 22 council meeting with his one week resignation notice that took effect on July 31. There will be a dual by-election on Oct. 16 for the position of mayor and a Lloydminster Catholic School Board member.

Mulligan said he believes he can make a bigger difference to the community by firing up his consulting company, Ahha Moments Inc., to work alongside the city and regional companies.

He will retain his role as chair of events for Scotiabank Hockey Day in Canada to be held in Lloydminster from Jan 14 to 18, 2014 culminating with a live broad-cast by CBC Hockey Night in Canada.

Mulligan was elected to his first term in 2009 and acclaimed to a second term in 2012. He sat down with Pipeline News during his final week as mayor to discuss his legacy and some current oil and gas topics and activities in the community.

Q: When will we know exactly what you will be doing in the future?Mulligan: I think people know now. I am going to be seeking projects

around the city. I am hopefully going to be doing contract work from every-body from the City of Lloydminster to leading businesses in the area.

I am going to expand Ahha Moments. That was my consulting company that I invested a lot of money in before I became the mayor and spent a lot of time getting certified in leadership development training – a change leader road map – that kind of certification to augment my professional skills.

So yes, I am expanding my Ahha Moments thing contrary to all of the talk about other political aspirations – I have no other political aspirations.

I am going back to the private sector and I am going to expand my Ahha Moments company and do good work in the region.

Q: Are there any wacky Jeff Mulligan conspiracy theories out there?Mulligan: One of the press called from CBC Toronto and they were

thinking Rob Ford (Toronto mayor) and people like that. I said ‘you’re going to dig a long time to find any big-time dirt on Jeff Mulligan.’

What you might find is that I have an unpaid ‘rolling through a stop sign’ ticket that’s due on Aug. 8, but that’s taken care of.

Q: What will you miss most about being the mayor of Lloydminster?Mulligan: What I am going to miss the most is diversity. You can be deal-

ing with a simple bylaw through to a multi-million dollar initiative with one of

the premiers. The next day you can be cutting a ribbon or reading a book to a Grade 2

class. I have learned a tremendous amount in this position. I often say to people I wish I had done this at 26 or 27 years of age and

taken that knowledge back to the workplace.I will miss the diversity and I will miss the people.Q: What do you think is your top accomplishment as mayor?Mulligan: I think my greatest accomplishment is the work I did around

the workplace culture – moving it from a permission-based culture to a service-based culture, both internally to staff and externally to the taxpayer.

The other thing we did was say we are really open for business. We are here to partner and enable. We are not here to control and approve.

Page A26

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Page A25

Citizens of Lloy-dminster made this happen. All we did was enable it. We knocked down barriers to suc-cess.

So when we are looking at the last three years, we are really talk-ing about $180 million of development every year.

Whether people

like it or not, being business friendly and open for business has to be at the core of what you do.

Q: Do you believe the new culture can be maintained when the next mayor is chosen?

Mulligan: Abso-lutely. We put in place some amazing building blocks and we’ve got good people. When we put stuff on the wall

and say how we will be successful, everyone shares that vision.

Once you get that shared vision, the next thing on the horizon is shared success.

Q: What is the most memorable oil and gas event that you attended as mayor?

Mulligan: I think Husky’s opening. (Husky Place offi ce in 2012). Th e energy in that building – if I closed my eyes and opened my eyes – many people wouldn’t believe the structure and the technology and fore-

thought that went into the design of that facil-ity – how it incorpo-rated staff , the customer and the corporate goals – they wouldn’t have thought they were in Lloydminster.

Q: What is your message to your suc-cessor?

Mulligan: My message to my succes-sor is you don’t have to come in with a change agenda. Some of the heavy lifting on change has been done.

What you need to come in with is to optimize and focus

on building this new foundation that we’ve created.

We’ve got good people; we are very committed to the suc-cess of the city and the taxpayers. Now what we have to do is be fi scally prudent, and we have to make sure that we stay on plan.

Q: Is Lloydminster safe given the rail di-saster at Lac-Mégantic in Quebec and the high volume of crude oil moving through our city by rail?

Mulligan: I think there is always a risk.

Th e movements on the train tracks are not handled by the City of Lloydminster. Th ey are not governed nor overseen and the safety standards aren’t cre-ated by the municipal government.

We have to realize if there is risk what role would the municipal-ity’s be? Th e munici-pality’s role near term would be protective service people, fi re – those kinds of things.

With a disaster of that size (Lac-Mé-gantic) you are quickly leaning on the province.

Note: Th at evening after the interview with Mulligan, a Canadian Pacifi c Railway train derailed in the city’s CPR yard while moving tankers. Seven cars were derailed but no oil was spilled. An overturned engine did leak diesel fuel which was contained at the site. Th e derailment led to the evacuation of the Lloydminster Golf and Curling Centre. All of the cars were removed from the area by July 29 and sent to the yard for repairs and inspec-tion. CP is continuing to investigate the cause.

Page A27

Page A26

Q: Is there any cause for concern regarding oil transload-ing facilities in the city?

Mulligan: Not to my knowledge. The pro-cedures are very tight. They are reviewed often and the safety standards are at the optimal levels.

It’s too soon to comment on what hap-pened in Quebec. There are some early signs that there were just some simple safety standards that weren’t adhered to.

Now they’ve tight-ened up some controls, saying you can’t leave those engines unat-tended any longer.

Understand that in Lloydminster, the movements are generally limited to a few train links of 50 or so. They are being shunted back and forth.

The circumstances were very different in Quebec – left in a location unattended with those materials in it – circumstances very different than what could happen here in Lloydminster.

Q: What is driving the rapid expansion of new and existing indus-trial parks in Lloyd-minster lately?

Mulligan: We’ve had existing companies that have grown and we have new compa-nies that are saying ‘we need to be a part of that oilfield scene in the Lloydminster play.’

We have some that have consolidated their operations – where they have expanded their operations but in pieces

around the city – and they are now consoli-dating those into one bigger project.

Add to that a couple of bigger projects like Atco and Husky in the past 18 months, and those have also stimu-lated tremendous activ-ity in and around those facilities.

We’ve got a couple of big announcements coming – one doing some consolidation.

We’re seeing some growth in materials handling because of the transloading facilities.

People are asking are there other verticals off of that – is there complimentary business off of that that we can contemplate?

Q: What do you think the economic impact is of plant turnarounds such as the 45-day turnaround Husky is running at the upgrader in September?

Mulligan: They are very necessary obviously to maximize efficiency of operations and ensure safety. The ancillary ben-efit is to the economy.

People come here, they stay here. They need to do things at night, whether it be going to the movies or eat, so overall, there is positive economic benefits.

It shows there is a commitment in the oil sector to safety and to maximizing operations.

Q: 2012 was a banner year for the city with construction and planning milestones. Do you see this type of growth carrying through 2013 into 2014?

Mulligan: There is a lot of foundational work done to create those programs and pro-cesses. Now council and management are asking ‘How can we take it up

another notch but using these guideposts?’

The city has been undergoing dramatic change in the way it thinks and operates, does its planning, ex-ecutes and measures for the last four years.

What you are going to see now is an oppor-tunity to leverage all of that work and really take it up a notch.

Q: As the event

chair for Scotiabank Hockey Day in Canada, what kind of oilfield messages and videos about Lloydminster can viewers expect to see?

Mulligan: We are engaging some of the people who would be noted community lead-ers in the oil sector in terms of sponsorship and sitting as chairs on some of the committees.

There will be an oil-

field influence, but this really a CBC Scotiabank celebration of hockey.

You will see some vignettes when they are featuring Lloydminster and what’s unique about Lloydminster – they’re going to talk about the history of heavy oil and exploration in conjunc-tion with our proud history as it contributes to the foundation we’ve built with hockey.

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Macklin – The annual World Bunnock Championships held in Macklin are akin to a lottery win for local organizations, but it’s the oil and gas industry and farming that fund the community the rest of the year.

The 21st annual championships held Aug. 2 to 4 generated approxi-mately $500,000 in direct economic benefits, with most of the spoils shared by non-profit organizations.

“It’s huge for pretty well everyone in town – private business and non-profit,” said event coordinator and town administrator, Kim Gartner.

“That number doesn’t take into account the businesses and what they generate. We have no way of tracking that.

“The non profits run all the food booths and the liquor and beer sales on the weekend. It turns out to be the largest fundraising event that a lot of our non profits have every year.”

Companies such as Husky En-ergy, Talisman Energy, Clean Har-bors and Maverick Oilfield Services were listed among the major sponsors of the championship.

The event attracted over 1,500 players of all ages on 384 teams from all over the world to Macklin Lake Regional Park, and there were plenty of supporters on hand.

“We have over 40 major sponsors.

A major sponsor to us is a donation of over $500,” said Gartner on event registration day.

“We’ve got a huge number of oil companies and service compa-nies – financial institutions. It’s been overwhelming this year.”

Bunnock is played with two op-posing teams of players who each toss larger bones at an army of smaller opposition bones, starting with the guards.

The team that knocks down their opponent’s bones first with the least number of shots wins.

This year’s event also drew major support from companies such as Crescent Point Energy, Bozco Enterprises, Gibson Energy, Alliance Pipeline, Nu Vista, Weatherford and Noralta Technologies.

The list goes on and on with oilfield employees also participating or pitching in to help.

“We’ve got about 1,000 volun-teers. You are running volunteers on all the food booths and liquor staff and looking after all the courts and everything like that,” said Gartner.

“The companies try to slim down as much as possible with their staff over the weekend to allow us to use those volunteers.

“The local companies are really supportive of what’s going on.”

Page A29

Page A28

The event draws up to 4,000 visitors to Macklin over the weekend and puts the town on the map as an attractive place to live, work and play.

“People know the name and they associate it with the tournament,” said Gartner.

“When someone is looking to settle in the area with a company, they know a little bit about the history and that helps.”

Macklin has be-come an active oilfield service centre with an agricultural setting that provides employment and things for young families to do.

“If it wasn’t for the oilfield and the fami-lies that they bring in, I think we would have a tough time keeping the school full and the services being used to the extent that they are,” said Gartner.

“It’s allowed genera-tions to be able to stay and given our children something to look forward to. They don’t necessarily have to go

away.“We will have some

that will actually go away work for awhile and then move back because they realize it’s a good place to live.”

Gartner said more than half of the mem-bers of the bunnock organizing committee relocated to Macklin for oilfield jobs and they hope others do the same.

“The event shows we are open to people coming in to the com-munity. We are open to sharing with friends and welcoming people to the community,” he said.

Oil companies such as Northern Blizzard, Husky and Nu Vista have drilling programs in the area and that at-tracts new workers, but housing for temporary workers is tough.

“Housing is a huge issue, especially with rental housing,” said Gartner.

“We have zero vacancy and we have a tough time trying to at-tract anyone to invest in rental properties because of the transiency of the oilfield. They come and

go.“It’s very tough to

get long-term renters. Anybody who is into rental construction mar-ket tends to shy away because of the long-term investment they have to put into it.

“We do have all kinds of people looking to rent – the vacancy is zero.”

The regional park is usually filled with tem-porary oilfield workers during the summer and early fall.

“The last five to 10 years, the campground has been full with pipeline and crews,” said Gartner.

“When it comes to

this weekend, a lot of the workers will actu-ally accommodate us by pulling out for the weekend and come back on Monday morning.”

Five new family houses are currently un-der construction in the 21-lot Pioneer subdivi-sion that was serviced by the Town three years ago. Another 34 lots have now been leveled off.

“We’ve sold 12 and have five under con-struction. We’ve aver-aged anywhere from up to 10 homes a year for the last 15 years,” said Gartner.

The Town pur-chased a 30-acre patch

of commercial land with some Highway 14 frontage a few years ago

and serviced it to attract new business.

Page A30

Page A29

Rona and a Co-op food story have both relo-cated and expanded to the site from the downtown core this year and a Subway outlet is going in next.

“In behind that there is a pretty big commercial property for second growth,” said Gartner.

“We’ve sold a few lots in there and we’ve got some inquiries on the other ones.”

Traffic counts at the intersection of Highways 14 and 31 through town are roughly 5,000 vehicles a per day.

“It’s busy. We’re open for business,” said Gart-ner who hopes that a new hotel and new oilfield service companies will locate at the commercial subdivision.

“In the long run it will be very good for the tax base. Temporarily, we do provide some incentives for the new businesses to help them get started and established.

“It also allows us to time to get everything in the subdivision completed because we are develop-ing ourselves. It’s kind of done in stages.”

Infrastructure is top of mind for Macklin as the Town completed a $3.6 million sewage lagoon last year to go with a new $2.5 million water treatment plant.

“Through the last 15 years, we’ve completed all of our major infrastructure of our buildings,” said Gartner.

“The recreation facilities are all new. We’ve done our water and sewer infrastructure, and we

will now focus on completing our roads.”“The main focus will be on rejuvenating our

streets because you only have so much money to do so much at one time.”

The community also has a new outdoor swim-ming pool that is not town owned, but was partly funded by donations from oil and service compa-nies in the area.

Gartner said the oil industry allows young people to provide services to the oilpatch and keeps the community young.

“Seventy per cent of our population is under the age of 40,” said Gartner. “It keeps the school full and the community vibrant.”

The bunnock tournament does the same as the youngest player last year was just three years old.

Midale – It’s not enough to drill a well and put a pumpjack on it. To get the most of that well, you need to optimize it.

And that is were 24-7 Enterprises Ltd. of Mi-dale comes in.

“We do it all when it comes to well optimiza-tion. That’s fluid levels, dynamometers, pressure surveys, foam depressions, equipment, sales, rentals and repairs” said Scott Brown.

Brown owns and operates 24-7, along with his wife Anita, who is the secretary for the company. Their son Ryan is the lead field technician, while daughter Chantal manages the ‘’Void’’ a home décor, fashion and accessories store in Weyburn owned by 24-7.

“Our qualified field staff of Keith Jordan, Brett Borys and Jim Milton, also play a huge part in keeping us going 24/7," Scott said.

24-7 Enterprises Ltd. was formed in 2003 to meet requirements and replace the old HBT title, prior to that it was Hei-Bro-Tech Petroleum Ser-vices which was started in 1993.

“We’ve always been busy,” Scott said. Based on the information gathered by 24-7,

the field operator for the oil company can have the strokes per minute or stroke length adjusted. “It’s all based on fluid level in the hole.”

Pump cardVarious transducers are used to measure pa-

rameters like gear box torque, rod load to create a “pump card.”

An ideal pump card shows a rectangular pattern showing maximum plunger travel, effective plunger travel, and differential load on the plunger. From the shape of the card a wide range of conditions can be deduced.

An anchored pump in normal operation is rectangular, whereas an unanchored pump looks “pushed over” in a diamond shape. Rounded corners on the top can show a leaking travelling valve or ex-cessive plunger slippage. Similarly, rounded corners on the bottom can indicate a leaking standing valve.

Other shapes demonstrate a severe fluid pound

as the well is being pumped off. Spikes up or down indicate tapping at the bottom or top of the stroke. A sweeping curve on the bottom right shows gas interference.

Scott said, “It will show gas interference,a bad traveling valve or standing valve, and a pump’s ef-ficiency.

“Fluid levels are probably the biggest thing. If you have fluid, you want to get it. You want to maintain some fluid above the pump, keeping up with inflow, but not pumping the well dry.

“Gas interference has a lot to do with it.”Not all wells have foam, but some do, he said. “We use a well analyzer,” Scott said, referring to

one of their key tools. With it we can perform fluid levels, dynamometers and a fifteen minute foam depression.

The old way of doing a foam depression took hours of repetitive testing. Now, with modern tools, a test can be done in about 15 minutes and a IPR can be created, with the proper well information.

The well’s IPR (inflow performance relation-ship) is a key element a well optimizer looks for. Scott explained, “It gives you what the well will produce in oil and water, based on current produc-tion rates.”

Pump adjustmentThere are several ways to vary production, in-

cluding type of pump, its size, and how that pump used.

In southeast Saskatchewan, pumpjacks are the most common, followed by progressing cavity pumps, electric submersible pumps and Rotaflex jacks. There are also some more exotic artificial lift systems out there, like the hydraulic jack, but the pumpjack is being the king, with about 85 to 90 per cent of the market.

Then again, some wells flow on their own, without artificial lift. These are usually newer wells.

For a typical pumpjack-operated sucker rod pump already in the well, it generally comes down to two primary things – stroke length and speed. Since adjusting stroke length means changing the

position of the pitman on the crank the easiest way to change a well’s output is through changing its speed. That’s accomplished by changing the mo-tor sheave or hitting a few buttons on the variable frequency drive.

“Ideally, for most any well, long and slow gives you the best production,” Brown said.

“Most wells are started as a long stroke and you see what it does. A long stroke means more torque on the gearbox as the well pumps down.”

Reducing the pitman position or strokes per minute can reduce the gearbox torque.

Finer adjustment can be made with the counter weights and balancing the unit. Page A32

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Page A31“I come from a background working on pump-

jacks. I’ve set them, moved them, I’ve done every-thing. I know my jacks.”

Scott has been involved in well optimization in one form or another since he was 16. He’s now 50.

“I once saw on a small jack, a guy welded a basket on the end of the walking beam and threw rocks in it, to balance the unit. The farmer’s rock pile was next to it.

On progressing cavity pumps and electric sub-mersible pumps, there is really only one adjustment to be made – speed – without changing the pump itself. You can speed it up or slow it down.

Doing the rounds“We shoot fluid levels on some wells daily,

weekly, some monthly. It depends on the customer and how/what they want to monitor the well for.”

For a fluid level test, Scott said, “We can be in and out in as little as 10 minutes. The average is 15.”

All the information is stored in a laptop, which is downloaded at the end of the day. All the shots are then reviewed moved into an Excel format and emailed to the customer.

“We collect fluid level, tubing pressure, casing

pressure, strokes per minute and stroke length,” he said. They also indicate the type of jack and pump in the report.

“We mainly cover southeast Saskatchewan and southwest Manitoba, but we do venture further.

Building gunsIn the shop, one finds the maintenance and

sales area of the operation. It’s there Scott noted, “I build my own guns,” referring to fluid level guns.

“I do repairs here, too. It all plays hand in hand.”

They also sell and rent new and used equipment along with all the necessary parts and supplies.

RentalsIn addition to the principle company, the

Brown’s also have rental accommodations properties in Weyburn and Midale.

“We get calls stead for rentals. All we do is take people’s names. Everything is constantly full,”

“We could probably stand 100, if you had good tenants.”

“We’ve had staff stay in a couple, but right now none of our staff are staying in them.”

The company has four people in the field, plus Scott, if necessary. The company has had more staff

years ago, when they did more of the tests manu-ally and used strip recorders. The current automated testing equipment has sped things up and is much more efficient.

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It doesn’t take long for Ryan Brown, to perform a fluid level test, and it shouldn’t. He’s been on leases since he was knee-high to a grass-hopper.

“Since he was six, he’s ridden with me,” said his father, Scott, who runs the family business of 24-7 En-terprises Ltd. Since Scott spent much of his time in the field, taking his son along was a way to get some family time in. As a result, Ryan bounced along in the van they used to use for testing.

“He’s like a 20 year hand, and he’s 27,” Scott said proudly, talking of Ryan’s experience.

These days it’s Ryan driving the truck, a big black Dodge pickup. In the back seat is the crucial hardware used for fluid level testing – a laptop hooked up to an Echometer Well Analyzer, a fluid testing gun, cables, ammeter and tape measure. There’s a few wrenches for good measure.

Pulling up to the pumpjack in the Heward area, Ryan parks his truck just outside the jack’s fence.

First, he ties into the casing on the non-production side of the well with a fluid level gun.

“We shoot a volume of nitrogen down the casing of the well. Then the pressure from the nitrogen will de-flect off the collars on the casing, all the way down to the fluid,” Ryan said.

“You have a microphone in your gun sensitive enough to pick up the

sound. The echo on the way back will give you a repeat of your shot.”

Sure enough, on the computer screen one can see the waveform of the sound pulse as it travels down and up the pipe. The software then churns out the numbers.

“There’s foam. We do a foam de-pression by closing the casing on the production side,” he said, likening it to closing the top on a bottle of pop.

The equipment is capable of analyzing the fluid levels without compressing all the foam, a process that would otherwise take hours. A manual foam depression can take up to 24 hours to get a gradient build.

“While we’re here we do tubing pressures,” he says.

One cable is tied to a pressure transducer, taking the pressure of the casing during the test.

Using a clamp on the polished rod and a tape measure, he deter-mines the length of the stroke.

“Depending on what you’re doing downhole, the different stroke length determines how much fluid you’re pulling.

An ammeter is used to get am-perage readings. While that informa-tion is available on variable frequency drive, he said, “We physically measure it. We always do it manually.”

In about 15 minutes, everything is taken off the wellhead and packed up. It’s time to head down the road to the next site.

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Regina – The oil shale play near Hudson Bay caught the attention of oil and gas companies and Energy and Resources Minister Tim McMil-lan in the August sale of petroleum and natural gas rights.

The sale generated $15 million in revenue including three oil shale special exploratory permit blocks on offer near Hud-son Bay that netted $4.6 million in work commit-ment bids from Canshale Corp.

“Industry continues to show confidence in the potential for new discov-eries in Saskatchewan, and the rejuvenated interest in our oil shale underscores that optimism,” said Mc-Millan. 

“Prior to this sale there were four oil shale special exploratory per-mits active in the Hudson Bay area.

“The addition of three new permits in this sale more than doubles the acreage under explora-tion.”

McMillan was also stoked by the average $690 per hectare price paid for leases during this sale. a level not seen since the August 2011 land sale.

“Saskatchewan continues to offer great resources in a competitive climate,” he said.

“The premium that industry has placed on ac-quiring oil and gas leases shows that this is a great place to invest.”

Year-to-date revenue from the four land sales held in 2013 is $44.3 million.

The Weyburn-Este-van area received the most bids with sales of $11.1 million.

The Kindersley-Kerrobert area was next at $2.1 million, followed by

the Swift Current area at $1.1 million and the Lloy-dminster area at $688,887.

Weyburn-Estevan area (numbers rounded up)

The top purchaser of acreage in this area was The Soo Line Resource Group Inc. which spent $2.2 million to acquire five lease parcels.

The top price paid for a single lease in this area was $1.2 million by Windfall Resources Ltd. for a 259 hectare parcel situated adjacent to the Oungre Ratcliffe Beds Oil Pool, 60 kilometres west of Estevan.

This is the highest dollar per hectare in this area at $4,562/hectare.

The top price paid for a single licence in this area was $1.7 million by Scott Land & Lease Ltd. for a 1,036 hectare block situated adjacent to the Benson Midale Beds Oil

Pool, 22 kilometres north of Estevan.

Kindersley-Kerrob-ert area

The top purchaser of acreage in this area was Rock Energy Inc. which spent $940,999 to acquire four lease parcels.

The top price paid for a single lease in this area was $423,540, dished out by Rock Energy Inc. for a 518 hectare parcel situated next to the Onward North Basal Mannville Sand oil Pool, 10kilometres west of Kerrobert.

This is the highest dollar per hectare in this area at $818/hectare.

The top price paid for a single licence in this area was $87,471, by Windfall Resources Ltd. for a

1,036 hectare block situated three kilometres north of the Bayhurst West Viking Gas Pool, 10 kilometres southwest of Eatonia.

Swift Current area The top purchaser of

acreage in this area was Mammoth Land Services Ltd. that spent $727,085 to acquire two lease parcels.

The top price paid for a single lease in this area was $363,702 by Mam-moth Land Services Ltd. for a 64.75 hectare parcel situated two kilome-tres east of the Bench Shaunavon Oil Pool, 22 kilometres south of Gull Lake.

This is the highest dollar per hectare in this area at $5,617/hectare

Lloydminster area The top purchaser of

acreage in this area was

Scott Land & Lease Ltd., who spent $350,748 to acquire three lease parcels.

The top price paid for a single lease in this area was $211,896 by Windfall Resources Ltd. for a 259 hectare parcel situated adjacent to the Edam East Lloydminster Sand Oil Pool, 35 kilometres north-west of North Battleford.

The highest dollar per hectare in this area was received from Sandstone Land & Mineral Compa-ny Ltd., who paid $3,113/hectare for a 16.19 hectare parcel located adjacent to the Edam East Lloyd-minster Sand Oil Pool, 36 kilometres northwest of North Battleford.

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Lloydminster – Pick a number if you are planning to enrol in an energy program at Lakeland College in Lloydminster in the near future.

Fall classes are fully booked and there is a waiting list for all of the one year certificate and two year diploma classes in 4th class and 3rd class power engineering respectively.

“I think our waiting list is at 100 qualified applicants, which is really quite unbelievable,” said Kara Johnston, director of energy, entrepreneurship and Saskatchewan programming.

The fall term begins with construction underway on the $17.5 million Petroleum Centre to help meet the growing student and industry demand for more full-time and part-time oil and gas programming.

The official sod-turning ceremony was held last September, with the construction kickoff in early July.

“I’ve been very thrilled. I’ve been patiently waiting for the construction to start,” said Johnston.

“The goal is to be in that facility in 2014, but we know how construction goes, so we’re certainly not going to bank on that. We hope that there’s no hiccups with the construction.”

The Petroleum Centre will house a large power engineering and heavy oil lab, with three steam boilers, water treatment equipment, a turbine generator

and breakout training spaces. Students will be able to simulate complete heavy oil upgrading and

steam-assisted gravity drainage (SAGD) processes from beginning to end in the lab.

Johnston said seeing the new facility under construction sends a lot of positive signals to students and industry partners regarding Lakeland’s com-mitment to heavy oil training. Page A38

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Page A37“It just shows Lakeland’s commitment to the

energy sector, to our programming here and to the future of it, and to increasing our programming to have more students come through the doors,” she said.

“It shows industry that we are serious and we are here to train people and we mean it. We are also here to help industry continue their education as well.”

The Lloydminster campus starts off the fall term with a newly renovated steam lab that stayed opened during the summer to provide accredited steam time hours for 4th class power engineering students across Canada.

“It’s really a phenomenal facility. Everyone’s been really pleased so far. We’ve had nothing but positive feedback,” said Johnston.

Johnston said the new school year will give the

college time to tweak the new lab and its two-year 3rd class power engineering diploma program be-fore the Petroleum Centre opens its doors.

“We’re kind of looking forward to this year. You need to make sure that all your ducks are in a row and that your labs are understood,” said John-ston.

“That’s our goal this year to just make sure everyone’s on the same page and we are knowl-edgeable about our curriculum and our lab, so when we are increasing services we are not putting undue stress on our faculty.”

The renovated power engineering lab is equipped with a fire tube and a water tube boiler to provide power engineering students with hands-on experience.

“This is a state-of-the-art facility,” said new energy chair and instructor Robert Jago.

Page A39

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Page A38 “All this equipment

we have currently in our lab is identical to the equipment they will work on in industry.

“There are an awful lot of changes in the operations side and the type of controls and instrumentation being used in industry,” said Jago.

“The processes haven’t changed a great deal. An upgrader is the same today as it was 30 years ago, but the tech-nology that drives it – the brain that drives the mechanics has actually changed.

“Students need to understand the process. They also have to be very technologically aware of what’s going on with the instrumentation.”

Lakeland provides students with training and qualifying time that meets both Alberta and Saskatchewan govern-ment requirements for power engineers.

Jago said there is ac-tually no shortage of 4th class or 3rd class power engineers in the industry, but there is a shortage of 2nd class power engi-neers.

“That’s creating the demand for 3rd class. There is a shortage of 2nd class that’s causing the pressure and industry to turn out fourths and thirds,” he explained.

Jago has more than 42 years of combined power engineering work and teaching experience in heavy oil, manufactur-ing, processing, power generation and thermal plants in three provinces.

He gives Lakeland’s energy programs the edge over other colleges he has taught at includ-ing NAIT in Edmonton.

“Our heavy oil pro-

gram and power engi-neering program is the only program of its kind in Alberta that provides students with hands-on heavy oil experience,” he said.

“We have instruc-tors here who have come right out of industry who have worked as field operators or as operators at the upgrader who can take that knowledge and pass it directly along to the students.”

The campus has also hired Reg Lee from Northern Lights Col-lege in British Columbia as its newest energy instructor.

More new employ-ees could be hired de-spite Lakeland’s plans to cut 40 full-time positions over the next two years at the Lloydminster and Vermilion campuses due to a $4 million deficit.

The cuts were an-nounced in April when Alberta reduced its cam-pus grant by 7.3 per cent, but the energy program is deemed a core revenue generator that is expand-ing.

“The college was rocked by some very

serious cuts as whole to our team. We were fortunate our area was left relatively unscathed,” said Johnston.

“We are an area of growth for the college. We have great wait-ing lists and it’s an area where the board has really put their support behind as a pillar on the Lloyd campus and our new wing that’s being built.

“To be able to ac-commodate the 100 on the waiting list, we need to continue to grow our faculty.

“We’re going to have to double our faculty in the next couple of years to be able to accommo-date the number of stu-dents that we’re seeing who are interested in our programs,” Johnston said.

The campus will also continue to run its introduction to heavy oil and gas program this year at the Onion Lake First Nations reserve.

“It’s a great program. This will be the third year and we’ve seen such amazing success with those Aboriginal students that have taken

that program and come into our mainstream programs,” said Johnston.

“They have been successful. Our very first group is now 4th class power engineers. How amazing is that?

“We are always working with our partners, especially on the reserve at Onion Lake, because they are the closest reserve we have in our area. We’ve got some really exciting things coming down the pipe.”

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By Brian ZinchukLampman – G. W. Trenching and Hauling

enters its 40th year in operation, having fired up in July 1974, but owner Gordon Waugh has been at it longer than that.

“I started running backhoe for my dad when I was 13-years-old. Dad had a rubber-tired hoe, a 530 Case.”

Waugh’s wife, Joanne, a recently retired school administrator, has done books for the company for roughly half of its existence. “She helps out occa-sionally,” he said.

Each of their three children have been involved as well, and one is still hanging around. At 30, By-ron is now a manager for SaskTel, looking after cell towers out of Saskatoon. Throughout university and a year afterward, he ran an excavator, drove dozer and truck.

Daughter Jenna, 28, now works for Crescent Point Energy, having formerly worked for Penn West Exploration until it divested its Estevan operations. She has a diploma in environmental sci-ence and works in Crescent Point’s environmental regulatory department.

Rylan is back in the area now, working with his father when he’s not working on his own condo-minium project, of which Gordon is a backer. He went to the University of Guelph and got a degree in commerce majoring in real estate development. Putting that to good use, at 25 he’s already wrap-ping up the first phase of a townhouse project in Carlyle. “It’s his money and my money,” said Gordon.

“All are very hard workers. My kids, right from five years old, rode with me on equipment. For the first 30 years, I worked seven days a week. To be with Dad, it was on a construction job.”

Gordon was a major contractor on the Kenosee Superslides, doing the piping and trenching. He’s also a part owner, and was president of the board until six years ago.

He also has real estate investments at Kenosee and White Bear.

“I hope to retire in a couple of years. We’re looking at investments that have some income when we retire. I’d like to my kids to take over

this business, but they’ve seen the ups and downs. They’re dramatic – either you’re 110 miles per hour, or your crawling at 10.

A dirt work contractor, G.W. Trenching worked closely with Carson Welding in its early years in the 1970s. Waugh looked after the dirt work while Carson did the welding. In 1980 Car-son took on pipelining full-bore.

The company did water and sewer work in Al-ameda, Kisbey and Stoughton in those years as well, in addition to farm water and sewer systems.

The in early 1980s G.W. Trenching started to get into more flowline construction, specializing in fibreglass line. During that time, four gravel trucks were added to take care of lease gravelling as well as construction. That’s still an active part of the busi-ness today.

The company has chain trenchers for power cable installation, running from SaskPower lines to leases.

The first wheel ditcher was added in 1981, but the two parked on the yard haven’t been used since 1998. Excavators have taken over that line of work.

A relatively new innovation has been the adop-tion of V-buckets on their excavators, making for a much quicker, and cleaner, sloped trench. Waugh said, “It’s twice as fast. You never push, you just dig.

You probably increase production 30 to 40 per cent. The production and the quality of the ditch really improved. The bottom of the ditch is as smooth as this table. It requires minimal raking.”

As a result, G.W. Trenching is able to get more chainage of pipeline done in a shorter length of time. While it’s easier on the labourers cleaning up the ditch, they end up having to hustle to keep up on the pipe assembly end, with more pipe being put together.

“We can run with one to two fewer men than a typical flowline crew,” Waugh said. “We do it a little differently than most crews.”

He’s also built a specialized hopper trailer with a conveyor for sandpadding ditch or distributing rock for weeping tile. Pulled by a tractor, it provides a nice, even distribution of material, and uses less of it.

“We do some environmental work. We work for consultants for some large oil companies. We do weeping tile and well systems to collect hydrocar-bons out of the ground.”

The 1990s to today have seen mostly pipeline work. In the last decade, they went to three excava-tors. A large chain trencher saw use for companies that didn’t require workers to go into the ditch.

Page A41

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Page A40While the Bakken boom dramatically affected

many businesses in the area, Waugh said, “The Bak-ken, in all honesty, never changed a lot of things for me. Being a smaller company, I never chased it. Regular companies gave me all I could handle.”

G.W. Trenching has remained small over the years, with a workforce varying from three to seven.

“My major problem here hiring people is find-ing people to come here, then finding accommoda-tions,” Gordon said.

“No one wants to invest in rental accommoda-tions in Lampman.”

That seems to have been a continual issue. “You can’t send people to Estevan. The rates are sky-high.”

He had one worker recently who ended up spending his weekends in Regina because he couldn’t afford to stay in Estevan.

To combat this, he even picked up a house near the shop to provide staff housing. The rent charged was minimal, but workers used to having full sub-sistence pay in Fort McMurray balk at paying any rent. The conundrum is that while oil companies are willing to dish out for living allowances for drilling and fracking operations, Waugh found that those same oil companies aren’t willing to provide those benefits for ongoing production work.

As with any long-term company in the patch, there have been ups and downs. “This spring was my slowest in 15 years,” he said. “Everyone had issues with it being too wet where they want to lay pipe.”

After a heart attack six years ago, Waugh decided to ease up on the hard-charging pace. They now work five days a week. “It’s way better. The guys are happier. They work a lot better. It’s often 12 hour days, but it’s better than seven days a week and no time off.”

At 63, he still plays hockey on a 45 and over team in Estevan. He used to be the young guy on

the team, now he’s the oldest, but, “not the slowest.”When he’s not on the ice, he’s flying or fishing,

with a Cessna 185 Amphib and a Comanche PA24-

260B. A close call with an engine failure last spring meant just barely making it into Regina. It could have been a field landing, instead.

Rylan Waugh was away at the University of Guelph studying real estate and housing when he saw from afar the boom in southeast Saskatchewan and the tremendous need for accommodations. That inspired the now-25-year-old to return and set up his own development company, WaughWho Devel-opments. It is currently working on Moose Ridge Estates in Carlyle, with two bungalow fourplexes.

He aimed at the senior's market. “It frees up other housing in the community for younger people to buy,” he said, adding, “A lot of people have been waiting for a maintenance-free lifestyle.”

The company was founded in 2010 while in his last year of university. There’s been plenty of challenges, going through three contractors in the process.

He kept trying to convince his classmates to come here for work, but with little success. “Every spring I would try to convince friends to come out here to work. You’d make so much money. They’d be lucky to work for two months in the summer. Some of my friends never worked in the summer. They couldn’t fathom the money you could make (here).”

The whole project has been modular, with large boxes put together on site. Once completed, they are indistinguishable from stick-built construction. When he’s not working on the project, Rylan helps out his dad’s trenching business, G.W. Trenching.

He’s looking at Estevan, Carlyle, Oxbow and Arcola for the next housing project. “Any opportu-nity we can find.”

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By Geoff Lee

Lloydminster – Entrec Corporation can write the book on moving super-wide loads on Alberta’s highways with the contract to move 14 huge inclined plate separators from Foremost Industries in Lloydminster to Fort McMurray.

The second of 14 loads 11.4 metres wide, 12.7 m high and weighing 362,150 kilograms left Foremost at 7 p.m. on Aug. 20 on a five night journey to Canadian Natural Resources Horizon oilsands project.

The series of loads, which began on July 30 and will go well into 2014, are touted by Entrec as the widest and highest “over the road” transport in Al-berta’s history.

“We moved the first one successfully and now we’re on to number two,” said Dan Killin, Entrec’s project manager on Aug.17.

The Inclined plate separators made by Foremost are used to clean water after it is used in the process to extract bitumen from oilsand.

Foremost said the vessels are a $20 million project, with a projected completion date of August 20.

The tank heads are manufactured at the Calgary shop and shipped to Lloy-dminster for assembly.

Northern Crane Services from Edmonton brought 250, 275 and 360 tonne cranes to the Foremost yard to begin the process of loading the inclined sepa-

rator onto Entrec’s heavy hydraulic platform trailer.The trailer is a 14-axle four file Goldhofer with 16 wheels per axle for a

total of 248 wheels. It has automatic steering capabilities, raises and lowers hydraulically, and weighs about as much as the vessel does.

It is pulled and pushed by three trucks.“We utilize three trucks every time. We’ll have one power unit in the front

to pull and steer and two behind it to push,” said Killin.The convoy travels with an RCMP escort in front and behind the load that

is guided by six pilot trucks.“The RCMP helped us immensely with the first one,” said Killin. “Since we are doing all this travelling at night, having those red and blue

lights out there is essential to make sure the public general is aware that we’re coming.

“Everyone worked extremely well together. I could not say anything bad about anyone on these roads. It was just absolutely incredible.”

In the wintertime, Entrec will likely take a gravel truck along to sand the roads to prevent slipping.

The load takes up the entire width of a two-lane highway including the shoulder with portions of the highway temporarily closed to traffic.

Portable electronic signs are placed at intersections and access points to warn other motorists of the closure. Page B2

Page B1“In our transportation route study, we found wide sites that would be safe

enough to pull over,” said Killin.“As traffic begins to get congested behind us, we will pull over and allow it to

pass.“Our goal is about every half hour. if it starts to get congested, we will pull

over. Basically it’s like a rolling closure.“During that first move, people were extremely collaborative with us and

scheduled around our move. We have had no accidents.“We’ll be travelling anywhere from about 50 kilometres per hour all the way

down to walking speed.”Alberta Transport issues a special permit to move loads heavier than the

maximum or any load wider or higher than standard.“What the permitting process does, it allows us to work with the carrier to

select a route and select a schedule and the times that things can be moved,” said Trent Bancarz, Alberta Transport spokesperson.

“We’re trying to do two things – we’re trying to ensure the safety of the load itself and, of course, the travelling public.

“We’re trying to balance that and try to minimize the disruptions to traffic,

which is partly why this load is moving at night.”Bancarz said the advantage of moving at night is there are not a lot of

vehicles around which reduces the potential for safety issues to arise.All of the loads will travel along Highways 16, 36, 29, 28 and 63 which are

designated as high-load corridors.On the newly twinned portions of Highway 63 into Fort McMurray, the

shoulder and the shoulder lane are wider than the standard lane to allow other traffic to pass on the left.

On other corridors, power lines have either been raised or buried. Some traffic signs and lights are on rotatable bases to swing them out of the way as the load passes by, while some routes feature removable guard rails.

“We are developing these corridors to help with the moves of these very large loads so they can safely get to their destination and minimize disruptions to traffic,” said Bancarz.

Killin said getting out of Lloydminster and onto Highway 16 and navigat-ing through Fort McMurray are the most challenging sections of the route.

“We’ve had to remove stop signs and a lot road signs where we are going around things because we are so wide,” he said.

“We have even had to remove railroad cantilevers to allow us to get through because we are such a wide unit.

“Because we are so wide, we have to drive over centre medians so we have to use curb ramps to drive up over them.”

Bancarz said Alberta Transport has permitted loads up to 500,000 kilo-grams, but he said the load being moved by Entrec in Lloydminster is defi-nitely one of the widest.

“It’s not often we have a load that’s wide enough that it literally takes up the whole highway,” he said.

“These types of loads are unique. An ordinary tractor trailer weight limit is 69,000 kilograms. You can’t really call this thing a tractor trailer. It’s nothing like a tractor trailer. ”

Entrec has one of the largest, newest and best maintained fleets of Gold-hofer THP/HL hydraulic platform trailers in North America for large loads.

“The key is the weight per axle. Even though a load like this is really heavy, if you put it on enough axles, the damage to the road is minimal,” explained Bancarz.

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Macklin – It was definitely not business as usual for MRC Canada ULC in Macklin over the August long weekend.

Just about every oil and gas customer of MRC in the area participated in the World Bunnock Championship from Aug. 2 to 4 as event sponsors, players or volunteers.

On the Friday of the tournament, customer orders for MRC’s line of pipes, valves and fittings for the oil and gas industry were mixed with talk about bunnock that is played with horse ankle bones.

“I think this year they have over 400 teams. It brings a lot of people into Macklin. It doubles the size of the town for a weekend,” said Bast who opted to skip this year’s event in favour of a family outing.

“If you don’t want to be tired when you come to work on Tuesday, it’s a good weekend to be gone!”

A normal workday at MRC in Macklin is devoted to filling and delivering orders for pipes, valves and fittings mostly pertaining to oilfield completions.

“It’s probably 50 per cent walk-in business,” said Bast. “A lot of crews will come to pick up their stuff in the morning then the remainder we deliver in the field.

“At the store, usually it’s the maintenance crews coming in to pick up their pipes, valves and fittings for the day’s work.

“We provide anything to do with oilfield completions. We do downhole stuff as well.

“We do progressing cavity pumps, sucker rods, tubing, top drives, surface equipment – hydraulic skids all that kind of stuff – anything you need to do to get oil out of the ground,” Bast said. Page B4

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Page B3Pipes, valves and fittings are typically used for tying in wellheads to tanks

and batteries or into flowlines.“There are all kinds of pipe nipples, switches, valves and that kind of stuff,”

said Bast.MRC has access to more than 150,000 products on their integrated global

supply network including stainless pipe and fittings to deal with corrosive H2S in the regional oilfield.

“As well we keep a lot of internally coating fittings – IPC coated which is a Teflon coating,” he said.

“MRC has a wide range of products and approved manufacturers’ lists that we can draw from.

“Usually, we get daily freight out of Edmonton. As long as we get an order by 4 p.m. it’s usually here at 6:30 the next morning.”

Midfield is coming off a banner year in 2012 for local business but demand has slowed somewhat through the first half of 2013.

“This year has pulled back, but I think the entire industry has pulled back a little bit projecting about 20 per cent off of what it was last year,” said Bast.

“The biggest player in the area in Northern Blizzard and they’ve been very busy, but all in all it seems to be flatlining for this year.

“The area is still busy, and 2014 is supposed to be a busy year in the first and third quarter.”

Macklin, itself, is on a growth spurt with the recent opening of a new Rona hardware and a Co-op grocery store fronting Highway 14 near the junction of Highway 17.

Those businesses and others coming soon are helping oilfield service com-panies like MRC to attract new employees, but housing is tight.

Page B5

Regina – What sort of impact will the Lac-Mégantic rail disaster have on Saskatchewan shortlines, the origin for much of our current crude-by-rail activity?

“Our thoughts have been with the residents, and the community of

Lac-Mégantic, dealing with this tragic loss. It’s a long road back, rebuilding to a sense of normalcy,” said Sas-katchewan NDP deputy leader Trent Wother-spoon.

“It’s almost impos-sible to comprehend the

loss that that commu-nity and families have faced. What we need to make sure comes from tragedy like that is thoughtful analysis; meaningful action to make sure communities are protected as it relates to rail transportation.

“The rail transpor-tation connected us as a country, and defined in many ways who we became as a nation, and has an important role into the future. But we need to make sure that we’re addressing con-cerns about safety. We need to make sure that recommendations of the Transportation Safety Board aren’t brushed off and ignored by the federal government. We need to make sure that when the auditor gen-eral makes recommen-dations about safety, those aren’t brushed off by the federal govern-ment. And we need to

make sure, as it relates to regulation of rail lines and safety of commu-nities, we don’t brush off the responsibility of government, where we’ve seen a significant agenda of deregulation of rail over a number of years.

“What we should be doing is making sure our rail transporta-tion network is set for a generation forward, and that it’s regulated in a way that is safe for communities and our environment,” he said.

Short lines in Sas-katchewan are provin-cially regulated.

“Short line rail has

been vital to our com-munities and province with the distribution of goods and commodities. As it relates to any con-cerns about the trans-portation of oil, as may flow out of the crisis in Lac-Mégantic, what we need is for government to provide a leadership role in a measured way, to make sure that the risks are understood and communities are pro-tected,” Wotherspoon said.

Noting that short lines, in many cases, are made up of local mem-bers who have pooled their resources together, Wotherspoon said they need to be enabled to step up to the challenge of meeting new regula-tions while protecting communities.

“If risks need to be mitigated to protect communities, then certainly government needs to be there to step up and be an active partner with short line rail to be able to meet those challenges. It’s very important commu-nities are safe,” Wother-spoon concluded.

Page B4“One of the things

we really struggle with when new people move into the community is rental housing. There’s isn’t a lot of rental hous-ing,” said Bast.

“Anything that comes for sale in the lower end of the market is usually snapped up within a couple of days.”

MRC opened the shop in Macklin in 2006 and has grown to nine employees and two con-tractors.

“We get our fair share of the business. We are the only pipes, valves and fittings supplier in Macklin,” said Bast.

“We do have lots of competition in Provost. Being the only company situated here, it works well for us.”

MRC has three salesmen on the road and three mechanics in service trucks who do every from installations to equipment oil changes in the field.

Equipment is also trucked back to the shop and rebuilt for the customer.

As the branch man-ager, Bast’s top priority is to make sure employees come to work and do their jobs well and in a safe manner.

He is also mindful for the shop to provide a product and a service to the customer that they are happy with while allowing the company to make money.

“That would be kind of the way it flows,” he said.

“We try to make sure our customers have what they want when they want and priced accordingly.

“This is my 20th year in the business so I have dealt with a lot of them over the years. There are some pretty good rela-tionships there.”

Bast also knows a lot of guys at the Lloydmin-ster shop.

“Lloydminster just seems to be steady, steady, steady. They’ve got guys like Husky. They do so many wells every year whether it’s good or bad. They just keep drilling.

“Macklin is cyclical with the oil industry. It’s primarily oil and farm-ing. Neither one of them has been super duper. It’s always one or the other that’s getting beat up.”

Bast also works as Macklin’s volunteer fire chief who typically sends a crew to the bunnock

championship to water the dusty roads at the Macklin Lake Regional Park.

A lot his employees were also helping out at the event, which the oilfield supports, to raise funds for non-profit groups in town.

“Everyone kind of pitches in and works a shift here and there for sure,” said Bast.

“For a lot of service organizations, it is their one and only good fund-raiser that they manage to have throughout the year.”

Northern Blizzard presented $73,000 to the Macklin and District Health Foundation and $15,000 the fire depart-ment a month before the bunnock tournament.

Northern Blizzard raised $168,000 for or-ganizations in Macklin, Kerrobert and Neilberg at its invitational vendor golf tournament held in Lloydminster on June 6.

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Lloydminster – Heavy oil programming resumes at Lakeland College in Lloydminster in September, but there was no summer recess at the newly reno-vated 3rd class power engineering lab.

Th e campus used the break to run two fi ve-week steam labs to provide 4th class power engineering students from across Canada with 200 hours of ac-credited steam time for certifi cation.

“Because our lab is now a 3rd class lab and has more capacity, this is the fi rst year we’ve run it,” said Kara Johnston, energy director on July 31 during the second lab.

“All of the students in there have been successful in their 4th class techni-cal portion. All they are missing to be fully accredited is the 200 hours in the lab.”

Most of the students in the summer intakes studied power engineering online or took distance training, then came to Lakeland with oil industry jobs or career changes in mind.

“I hope to get my 4th class ticket, then hopefully get into power engineer-ing back home,” said 24 year Jarrod Gauchier from High Prairie, Alta.

“I want to be a heavy oilfi eld operator, then hopefully go for my Class 3 after that. I am a heavy equipment contractor and I kind of wanted something else, so I got into power engineering.”

Th e Lakeland steam lab is an effi cient alternative to an industry practicum that could be unpaid and take up to 900 hours to complete.

“Every lab is structured and has specifi c outcomes, so that’s why it’s an advantage to come here,” said Johnston.

Th e lab is equipped with a high tech water tube boiler that was installed last fall to go along with an existing teaching fi re tube boiler and a small once-through generator.

“It’s nice. Everything is hands-on here,” said Gauchier, who hopes to work in a heavy oil thermal project in the Seal Lake area northwest of High Prairie.

Page B7

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Page B6“They need steam to

get heavy oil out of the ground in the oilsands up in Seal Lake.”

Mohit Sharma, an 18 year-old power engineering student from Edmonton, is also eyeing a career in the heavy oil industry once he is fully certified.

“I want to work in the oil and gas indus-try too – anywhere I can find a good job in Alberta. I want to stay in Alberta. It doesn’t matter if I am close to Edmonton or not,” he said.

Energy program chair and instructor Robert Jago said there’s a demand for up to 5,000 power engineers in Canada, just to cover attrition.

“A lot of it is growth in the oil and gas industry. There’s a bit of a demand everywhere in Canada for power engineers,” he said.

“In the heavy oil industry, it’s age. There’s going to be a huge turn-over in the next four or five years because a lot

of people are approach-ing retirement age.

“Most students recognize Lakeland College for the heavy oil program and they recognize the heavy oil program as an entrance into the oil and gas industry.

“It’s a stepping stone for students. If they want to get into heavy oil, this is the place to be.”

A career change was top of mind for 33-year-old Teresa Lawrence, a nurse from Penticton B.C.

“I’ve always wanted a trade underneath my belt. My family comes from a trade back-

ground,” she said.“I have been in

the medical field for the past 15 years, and I wanted to change. I am going to try to get into the oil and gas industry after I write my two exams.”

The steam lab is approved by the Alberta Boiler Safety Associa-tion and the Technical Safety Association of Saskatchewan as a requirement to write the 4th class Part B exami-nation.

Students who want to work as power engi-neers in other provinces have to also write exams in those jurisdictions.

Page B8

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Page B7Lakeland also provides training

in 4th class and 3rd class heavy oil power engineering, but the summer steam lab covers only the 4th class power engineering portion.

That’s okay for now, according to 48 year-old Stephen Lacoste, who is being trained by Millar Western Forest Products Ltd. in Whitecourt, Alta., to maintain their dry kiln boil-ers.

“I’ve been a saw filer for 30 years and decided it would be something new to try and something to chal-lenge my mind again,” he said.

Lacoste also realizes that having a 4th class power engineering ticket could give his some added career op-tions in the energy sector.

“With the interest in the oil industry the way it’s going, I thought this would be something different to try instead of saw filing for all those years,” he said.

“For now, I’m thinking with this company and the way they’ve treated me – I want to complete this course and help them out by taking care of the kilns and drying the lumber.”

Lacoste said Millar Western is building a new cogeneration plant on site that will require power engineer-ing expertise.

Twenty three year-old Evan Nygren from Lloydminster certainly knows the value of a 4th class power engineering ticket in the heavy oil sector.

“Every job I have had since I was out of high school has been in the oil industry. You are definitely surround-ed by it when you are here,” he said.

“I’ve been operating oil wells for

the past couple of years and that’s basically what I’m trying to continue doing.

“This course just helps me get to the next level and opens me up to more opportunities with more companies.

“It applies to what I did before too in just operating your basic oil wells.”

The steam course is a combina-tion of hands-on training as well as submitted assignments to be com-pleted on site during lab hours. 

Jago said the technology being used in the industry is mostly com-puter based these days and Lake-land’s teaching lab is no exception.

“This lab is state-of-the-art. It’s ideal for teaching. The students here get hands-on experience with equipment that they will work on in industry,” he said.

“All this equipment we have currently in our lab is identical to the equipment they will work on in industry.”

Johnston said there “there is a huge demand for lab time” in the in-dustry and believes the summer labs will help ease pressure on industry to create student work placements for steam time.

“It helps pay to keep our doors open and helps pay to keep our lab running, so that’s a bonus as well,” said Johnston.

“If we have a major breakdown, we have funds available to fix that.”

The summer lab costs $5,500 per person not including accommodation in the student dorms. There were 10 students in the first lab and 20 in the second one.

By Brian ZinchukWinnipeg, Churchill,

Man. – The Port of Churchill, Manitoba, is working on its first shipment of Western Canadian crude oil, hopefully to be sent out this fall.

Efforts have been underway to get landlocked Western Canadian sedimentary basin to tidewater via the proposed Enbridge Northern Gateway Pipeline to Kitimat, Kinder Morgan’s planned Trans Moun-tain Expansion to Van-couver, TransCanada’s stalled Keystone XL to the U.S. Gulf Coast, and the recently an-nounced TransCanada Energy East project to St. John, New Bruns-wick. But the closest tidewater to the WCSB is in fact Churchill, Man., and by rail it’s literally all downhill to get there.

Jeff McEachern, executive director of the Churchill Gateway Development Corpora-tion (CGDC), spoke via phone to Pipeline News on Aug. 15. while on the road doing com-munity consultations.

“We’re doing some community information sessions right now,” he said.

That’s a key point for a project that will depend on crude-by-rail to get to the north-ern port, especially with the tragedy that struck Lac-Mégantic, Que., where a runaway train carrying crude oil killed 47 people in July.

They had just spoken to a community meeting in Churchill, where approximately

100 people turned up. That’s a very large number when you consider the town only has around 900 people. At The Pas, approxi-mately 40 people came out. Thompson was the next on the list. Both The Pas and Thompson are on the Hudson Bay Railway, which services the Port of Churchill.

“We’re still working through the process, working on the infra-structure buildup of the port, working with in-dustry partners. We’re talking to communities right now about our plans and what we’re looking toward, try-ing to provide as much information as we can,” McEachern said.

Asked about the impact of the Lac-Mégantic disaster on their discussions, McEachern replied,

“Well, there’s obviously heightened awareness of the risk involved. Part of this tour we’re on is to talk about how the railway intends to handle this is a very safe, environmentally friendly manner, and how they’re going to do things different than in Quebec.”

Page B11

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Page B9“There’s been sup-

port on one side, and concern on the other side. I think everybody’s concerns and heightened awareness is because of Lac-Mégantic, concerns which are natural. But there’s also understand-ing that diversification is an important thing to the Port of Churchill to continue to be viable in the future. It’s a real mixed response in the feedback from the com-munity. We’re going to provide them with as much information as they need, and it’s gone very well.”

Operations and maintenance of Mon-treal, Maine & Atlantic Railway have been called into question with regards to the Quebec disaster. Asked about the Hudson Bay Rail-way’s track, McEachern said, “The line is in as good a shape as it ever has been. There’s been significant investment put into the line in the last couple of years and there will continue to be.

“A unit train on the Hudson Bay Railway is 80 cars. It’s most likely they will be unit trains that come up, and that’s what we’ve been com-municating to the com-munity.”

That size of unit train, based on a 600-barrel load per tanker car, would carry approximately 48,000

barrels of oil. The port was

originally built to ship grain, with the rail line completed in 1929. But in the early days of the Cold War, Canada and the United States and built a substantial army base at Churchill, resulting in substantial petroleum storage tanks being built at the port. At one time tankers were to bring in fuel, but now that comes in by rail. Just a fraction of the tank farm’s capac-ity is currently used for refined products – diesel, jet fuel, gasoline. But it can also be used for crude. The system can both receive and ship petroleum products.

The tankage has a total capacity of 250,000 barrels. McEachern said last December they anticipate approximately 200,000 barrels could be used for unrefined product. The remainder is used to service the community.

“We are in the midst of making modifi-cations to ensure we can transload the product from rail to vessel effi-ciently, and safely. We’re going through certifica-tion of the existing in-frastructure and making modification to enhance the throughput.”

The initial plan is to load from rail directly to ship. Eventually modifi-cations would be made to the tank farm to al-

low oil to be transferred from rail to the tank farm, and then the tank farm to ship.

“Storage will be a factor for growth in the future. We’re focused on running an initial shipment first, a pilot shipment.

“We’re working through that process right now, potentially as early as October,” McEachern said.

Since the shipping season ends at the end of October or early November, there would be only time for one shipment. But if that doesn’t work out, the plan would be to look at the 2014 season for the first shipment. Due to ice, Churchill’s shipping season is from July 31 to Oct. 31.

The tanker vessels would be in the 250,000 to 300,000-bbl. size.

“The growth will be driven by the market. In our community meet-ings, we’re talking about growing slowly. We’d like to see 10 vessels per year in the coming years.

“It’s going to be a phased approach.”

That would put total export capacity via Churchill for a year at approximately 3 mil-lion barrels. In contrast,

that’s less than the proposed TransCanada Energy East pipeline would ship to Eastern Canada in a long week-end, or the proposed Enbridge Northern Gateway pipeline would export in six days. West-ern Canada currently produces roughly 3.5 million barrels per day.

As for spill response should an oil tanker get into trouble in Hudson Bay, McEachern said, “There’s a very extensive emergency plan put

in place. We’ve been discussing that with the community and work-ing with leading experts in the industry to assist us to not only make plans that meet industry stands but exceed the standards of the indus-try. We’re very conscious of the environment we’re in and the ecosys-tems. We’re going well beyond industry norms to ensure everything is done very safely.

“The spill response and emergency plan

have all been laid out in our plan, which has been reviewed and approved by Transport Canada. We’ve been working closely with regulatory agencies to ensure the plan is above standard.”

A “significant in-vestment” is being made. It’s a private company, OmniTRAX, that’s the asset owner and mak-ing the investment. Churchill Gateway De-velopment Corporation is the marketing arm for the Port of Churchill.

By Brian ZinchukRegina – When you

pull back the curtain on many Saskatchewan oil and gas ventures, you will find that PFM Capital Inc. of Regina is often a financial backer.

PFM just conclud-ed commitments and placement of approxi-mately $20 million in the oil and gas sector this past summer, in addition to $23 million in placements and com-mitments earlier in the year. PFM Capital is Saskatchewan’s largest private equity firm with $485 million in assets under management. Approximately $100 million of that figure is currently invested/com-mitted in the oil and gas sector.

“It’s been a busy but good summer,” said Jason Moser, senior investment manager with PFM.

PFM is the man-ager of the SaskWorks Resource Fund, Sask-Works Diversified Fund, and Apex Invest-ment Limited Partner-ship, among others.

Moser sat down with Pipeline News earlier in the summer to discuss their various in-vestments in the patch.

“We see more service companies than producers based on the quantity of service companies in the basin. You see a lot of them, but you have to be disciplined. You have to think about the exit and being properly capital-ized amongst other criteria.

“There are still good opportunities out there as there are many talented management teams. However, insti-tutional investors need to be judicious in where we put capital.

“We see a lot of owner-operator compa-nies for sale given their demographics.

He said that com-panies that do a good job in building for suc-cession are of interest. “If it’s a one man show and he or she is taking all of their chips off the table, then that’s less desirable for us.”

The fund man-ager usually looks for investments to last five to seven years, until it

is time to exit. Exits are situation specific, according to Moser and depend upon company and market specific circumstances.

“We go into most investments with the expectation that we may be in there for five to seven years,” he said, adding, “As long as there’s value being created we’re happy to remain involved and help grow the company”

“You have to bal-ance continued growth with monetizing a gain. We won’t exit just for the sake of exiting.”

PFM’s investments discussed here are either done through APEX LP or the SaskWorks funds, so references to PFM should be con-sidered to be through either or, sometimes both, funds. Plains Environmental

Plains Environ-mental is a waste disposal operation that was purchased by Rotex Energy, a company that PFM had invested in. Rotex then took on the long-established Plains Environmental name.

Regarding Plains, Moser said, “It’s a space we like, especially on the cavern side. It’s difficult to replicate the facilities they currently have.”

With more oner-ous environmental regulations, the result is a good market for waste disposal opera-tions. Funds managed by PFM invested $6 million in April 2011, and followed that with a further $1.6 million investment in Septem-ber 2012.

CanElson DrillingWhen it comes

to CanElson Drill-ing, Moser said, “We were in at the inception when it was private, prior to the CPC trans-action.”

“It’s a well-run company, basically, from top to bottom.”

“They kept their nose clean during the recession and have been opportunistic and selective in what they acquire. Just like they have through the cycles in various predecessor companies They’re one of the premier drillers in the space.”

CanElson has 14 rigs in Saskatchewan.

Through its share-holdings in CanElson, PFM has indirect expo-sure to CanGas Solu-tions, owned by CanEl-son. They are seeking to capture natural gas that would otherwise be flared, as well as use compressed natural gas to fuel drilling rigs.

Stampede DrillingEstevan-based

Stampede Drilling is a new player to the game, drilling its first well in November 2012. The company has two rigs.

“We liked the depth of the man-agement team, with financial, marketing, safety and operational backgrounds. They’re a little better rounded than some other small independent teams,” Moser said.

Bill Devins looks after operations, Jackie White takes care of health and safety, and Darrin McKay does sales and marketing.

Praising Stampede’s environmental and safety background, he said, “The quality and comprehensiveness of your safety program can dictate who you can and can’t work for in today’s environment.”

“We did one-third of a $15 million raise,” he said, adding there was “good management participation, which we always look for.”

Crusader DrillingYorkton–based

Crusader Drilling now has three rigs, Moser noted. “They have good utilization, and good contacts. They’ve kept their crews active and working throughout the cycle due to the quality

of the equipment and management.

Funds managed by PFM have a $7.0 million investment into Crusader.

Steel Reef Infrastructure

PFM’s largest investment in the oil and gas sector is Steel Reef Infrastructure Corp. Funds managed

by PFM made a $20 million commitment at the end of March.

Steel Reef is a pri-vate midstream start-up company out of Calgary whose senior manage-ment team was previ-ously at Keyera

Such a company likely won’t see the same return as a start-up oil and gas company,

but it also has a differ-ent level of risk, with use or pay contracts over a fixed period of time and operating costs flowing through to the producer, he noted. There’s room for something with those characteristics within their investment portfo-lio.

Page B14

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Page B13Steel Reef is looking

at a number of greenfield and brownfield oppor-tunities in southeast and southwest Saskatchewan. “Right now they are evaluating a number of proposals,” Moser said, noting the company is

looking at gas processing plants, blending facilities, batteries and pipelines amongst other assets.

With a lot of pro-ducers forced to make difficult capital alloca-tion decisions, using Steel Reef on existing or new assets can be an

attractive alternative. Sun Country Well

ServicingEstevan-based Sun

Country Well Servicing saw a $1 million invest-ment in March 2010.

“We were looking at this space and spoke with some other insti-

tutional investors who knew it quite well and they actually recom-mended this manage-ment team. They said if they were looking at Saskatchewan, there are two people they would be looking at and one of them is Brad Bennett.”

Bennett is the vice- president of operations for Sun Country, head-ing up things on the ground in Estevan, and one of three partners, the others being Tony Hodges, president, and Rob Wasylyniuk, vice-president of finance. Sun Country is one of the larger independent service rig operators in

Saskatchewan. They cur-rently have 10 rigs with number 11 set to arrive this fall.

ProducersPFM’s funds have

made numerous invest-ments in small oil and gas producers. Moser said, “In general, we are seeing a lot of emphasis on cost control and ef-ficiencies. The market is making producers more disciplined.”

With regards to southeast Saskatchewan, where the “Bakken Boom” has somewhat cooled, he said, “It’s not a grow-at-all-costs basin anymore.

Page B15

&

Page B14“At a high level,

Crescent Point or PetroBakken (now Lightstream Resources) are forecasting modest production increases over the next four to five years. If the big produc-ers aren’t going to see huge increases in this region, overall, it’s prob-ably not going to (hap-pen.) Still, there’s decent activity, and producers can realize good returns. It’s not the hockey stick growth trajectory that was seen 10 years ago, but it’s still an attractive place to invest.”

Moser said these are the signs of Bakken becoming a mature field, with companies like Crescent Point Energy looking at secondary recovery methods such as waterfloods.

Avalon Oil & GasAvalon is the third

iteration for this heavy oil management team who has achieved two successful liquidity events. Funds managed by PFM made a $10 million commitment in Avalon in August as a part of a larger equity raise. Moser said, “We believe Avalon is well capitalized and can be opportunistic to benefit from some attractive asset and land packages for sale.”

Caltex ResourcesCaltex Resources

has operations concen-trated near Druid, south of Lloydminster. Col-

lectively the Funds have $8.3 million invested in Caltex

“They acquired a heavy oil producer of ours, concurrent with an equity raise,” he said.

Moser described the company as well financed, with good institutional investors.

“This is the third iteration with this management team. They know heavy oil and have had good returns before. These guys are good at driving down costs and are very efficient,” Moser said. “Being private, they can grow at their own pace and can be op-portunistic with their acquisitions given the strength of their bal-ance sheet and ability of investors to follow-on.”

Elkhorn ResourcesElkhorn is a very

focussed company with all assets concentrated in the Northgate area in southeast Saskatchewan. They secured their land position early and are one of the larger private producers in the area.

“We participated in a follow-on last fall with a $4.0 million invest-ment,” Moser said.

Firesky EnergyFiresky Energy Inc.

is a “carve out” of family owned T. Bird Oil in Estevan.

Firesky is headed by Warren Waldegger, who has been the gen-eral manager of T. Bird Oil since its inception. Firesky represented an

opportunity to bring in outside investors, and funds managed by PFM made a $5 million investment in the June 2012 equity raise.

“They had a ‘starter kit,’ of some existing production and unde-veloped land which can be more desirable than starting from scratch,” said Moser.

“Fire Sky has had a good first full year of operations. They’ve completed a few ‘tuck-in acquisitions’ and are growing internally.”

Some family-run companies are good with stretching a dollar, and Fire Sky has many of these attributes, Moser added.

High Rock Energy Ltd.

The fund’s $4.5 mil-lion investment in High Rock Energy came about indirectly, through High Rock's acquisition of Bulldog Oil & Gas in 2012. The company has southeast Saskatchewan operations with a good mixture of lower risk plays and some explora-tion prospects.

Villanova 4 Oil Corp.In a case where in-

vestment funds tend to follow successful man-agement teams, PFM’s involvement with Villa-nova 4 Oil Corp. is their sixth team-up with the Villanova crew through successive companies that have been built up and then sold.

“They have the

infrastructure in place. There’s very little turn-over over there. If you have consistency and quality in the manage-ment team, and good access to capital then the likelihood of a good outcome is increased.”

The company is a southeast Saskatchewan conventional producer. Funds managed by PFM

have a $5.2 million investment.

Spur ResourcesThe funds’ 2011 $5.1

million investment was part of a larger equity raise used to acquire some legacy assets in SW Saskatchewan. Moser said they are quite happy with Spur’s cost control, capital efficiency and produc-

tion growth and have subsequently increased their exposure by an ad-ditional $5.0 million

The company has west central Saskatch-ewan assets in the Bird-bear and Viking forma-tions, with fast-payout wells and good cashflow.

“They’re very eco-nomic (Spur’s wells),” Moser said.

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Regina – There won’t be a lot of debate in the legislature when it comes to TransCanada’s proposed Energy East project. That’s because the folks in charge of officially opposing have no opposition to it.

Saskatchewan NDP deputy leader Trent Wotherspoon told Pipeline News, “The Saskatchewan New Democrats support Energy East, the pipeline that’s been proposed. We have, as a party, championed this sort of develop-ment in Canada.

“Certainly for projects like this, the triple bottom line must be met, from an environmental, economic and social perspective to ensure there is a benefit to Saskatchewan people and com-munities. But we see a lot of benefit in Energy East. It needs to be focus for our government.

“It creates jobs in Saskatchewan. We see it getting our oil to market, very important markets, that can work towards potentially closing the oil dif-ferentials, getting us a better price for our oil. Certainly it’s my job to advo-

cate for Saskatchewan, that’s my focus, and the Energy East project would be important to Saskatchewan people and add value for all of Canada.”

While nearly all of the pipe for this project in Saskatchewan is already in the ground, with the repurposing of an existing natural gas line to oil service, the biggest impact will be the creation of a substantial new oil termi-nal near Moosomin.

“It’s important for us to get Saskatchewan oil into those pipelines and to market. In doing so, we need to ensure that whatever projects are proposed, they pass an environmental, economic and social benefit, to make sure any communities impacted are protected on the environmental front.

“This is an important project for Saskatchewan. It’s important from a jobs perspective, it’s important for get-ting a fair price for our product.”

The impacts go beyond the direct oilpatch, and include companies like Evraz in Regina, which produces pipe, he noted.

Calgary – The Lac-Mégantic disaster has had impacts on the crude-by-rail industry here in Saskatchewan.

“Obviously, it’s a horrific tragedy,” said TORQ Transloading CEO Jarrett Zielinski. “From an operational perspective, it has reduced some shipments to Canada’s East Coast from any origin that may take that route.”

Asked if any of their shipments had taken the Quebec route in question, he said, “There have been some shipments of ours, on a manifest basis, but it is not Bakken crude that was taking that route. It is heavier crude from southern Alberta and southern Saskatchewan.

“It’s not good for the industry, period.”As for what will happen in the future for crude-by-rail, he said, “It’s early

to speculate. What I can tell you is over the past four to six weeks, there’s been a slight drop in volumes. I would say the majority is associated with crude pric-ing and not the tragedy in Lac-Mégantic.

“How it’s going to impact our business in the future, my expectation is there will be higher safety controls. It extends all the way from the delivery of crude to a loading facility; the loading of it, those processes and procedures; and the actual transportation of the supply chain; then the delivery and receipt of the product as well.

“I don’t think it will be crude oil-specific, but an umbrella covering any dangerous goods.”

“Remember, the nature of most of the product we ship is heavier crude, with a much higher flashpoint. The nature of that crude is much different from Bakken crude from a dangerous goods perspective and its ability to ignite.

“I’m not an expert. I’m not a chemist. Typically crude oil does not explode.

You would not see an explosion like that. I guess I would be looking forward to understanding what caused the explosion, if it was the crude oil, or another substance that caused the explosion that subsequently lit the crude on fire,” Zielinsky said.

With the cleanup and compensation from Lac-Mégantic going well into the millions of dollars, how will this affect insurance for the short lines which service many crude transloading facilities?

“I can’t comment on their insurance. We’re going through a full review of our insurance to ensure we are covered for things that may happen further down the supply chain. If changes are significant in insurance requirements and the costs are significant as well, it may become more difficult for some of the shortlines that don’t see a lot of traffic. Or those costs may be passed on. But when you spread them across a per-car basis, it may not be as significant as one would think,” Zielinski said.

TORQ has had brief discussions with respect to a review of policy and procedure with the rail lines they work with.

“I think it’s early to make wholesale changes to our loading procedures, given we don’t know yet if it was a rail car failure, a mechanical failure ... we don’t know enough detail about the actual chain of events of what occurred and led to that disaster,” Zielinski said.

The train that caused the disaster was operated by one man. “I can comment that we don’t operate under those metrics. We certainly

have more than one person at any facility at any given time. They also have methods of communication, such as radio. We don’t actually move the tank cars, by and large,” he noted.

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Halbrite – Four years ago, Brady Oilfield Services LP saw a big jump in size. Now it’s beginning to adjust to the new realities of the oifield, including the industry’s growing usage of crude-by-rail.

Lyndon Forseth is the assistant director of field operations. He has been with Brady since 1997, first as a driver, then dispatcher. He’s been in his current position for a year.

“I look after the customer base, and do the bidding,” he said.Brady has been in business for nearly 50 years. Most of that time, it was a

family business, but in 2006 it was purchased by the Mullen Group.The Mullen Group tends to allow its subsidiaries to operated with a lot of

independence, and that’s exactly what is found with Brady.“Every (Mullen) company runs on its own individual basis,” Forseth said.

“We run right about 100 units, give or take, including our gravel division.”That’s about the same size as 2009, after a few years of marked growth.

Right now the fleet isn’t growing so much as gradually changing, with the adoption of larger units. For instance, the company now has seven sets of Super-B trailers instead of traditional straight trailers. That’s in part due to the difficulty of attracting new drivers, common throughout the industry.

“It’s easier to pull bigger units with the employees you have,” Forseth said.The company’s area of service has also greatly expanded. Brady’s home base is smack dab in the middle of the Weyburn unit, oper-

ated by Cenovus. “We used to haul within, say, a 40-mile radius. That’s now southern Saskatchewan, Alberta and Manitoba.”

One truck has a steady run hauling calcium water from northern Alberta. Calcium water is used to kill wells.

North Dakota has been a recent addition as well. Page B20

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Page B19 Crude-by-rail

Th e phenomenal increase in crude-by-rail means new markets for fl uid hauling companies. Nearly all crude-by-rail facilities to date in Saskatchewan have been fed by trucks, although recently announced unit train facilities are expected to be partially pipeline-fed.

Crescent Point currently has the largest crude-by-rail facility in Saskatch-ewan, but that is expected to be eclipsed within the next year by new facilities at Lashburn, Northgate and Kerrobert. Enough crude-by-rail projects have been announced in recent months that if they are are built, Saskatchewan will theoretically have the ability to ship all of its crude production, and then some, by rail.

TORQ Transloading’s Southall location, near Bromhead, a recently launched crude-by-rail facility, is very close to Brady’s base. Brady is now haul-ing for two larger producers in the area to that facility.

“It’s in our backyard. It’s in our turf,” Forseth said, noting the company’s eagerness to do that sort of work.

“TORQ is so close to us, we want to be the No. 1 there.”As of early August, that was the only crude-by-rail facility Brady was haul-

ing into, but it wasn’t the fi rst. Th e company had the run from Roche Percee production to Estevan, but it has been several months since they’ve hauled a load into Estevan.

Brady is currently pursuing trucking opportunities for other crude-by-rail facilities.

“You take Crescent Point. Th ey’re not going to back down on crude-by-rail, so of course you want to be a part of that.”

“Anything going to crude-by-rail, a trucking company smiles,” he said, with a smile on his own face.

“Everything going to rail has to be trucked there. Th ere’s no pipeline con-nections yet.”

Forseth noted that a lot of trucking companies hauling to crude-by-rail facilities are tied with marketers, something Brady has not done.

“As Brady’s, we haven’t got that. A marketer doesn’t own us. As far as the Mullen Group goes, I’m sure they’ve looked at it.

In addressing this shift in the business, Forseth said, “We’ll be ready.“We’ve been sitting reasonably slow right now. We have a lot of metal

waiting right now. If that’s the route it’s taking, we will defi nitely be involved in it.”

“It comes up every day at coff ee.”Th e aforementioned Super-B’s are well-suited for that sort of hauling. “You

need your Super-B’s, which we expanded two years ago. Page B21

Page B20 Operations

“We have such a variety of what we do, rail isn’t the only thing. We have 12 tri-drive body units for service rig work,” Forseth said.

Th ose units see a lot of work in the Weyburn unit, mostly hauling water, but also oil and chemi-cal. Body-jobs, as they are often called, are more nimble on tight leases than larger units.

Th e bulk of the fl eet is approximately 80 tri-axle trailers units. Th ey are big enough for crude oil transfers, emulsion, produced and fresh water hauling.

Brady’s will often assist Mullen Group sister company Spearing Service LP, out of Oxbow, with its frac water hauling, as needed. Spearing operates a large fl eet of frac trailers, but Brady does not. Th ey stick to hauling the water in those cases.

Brady’s has four pressure trucks, including one

one-ton for fl owline pressure testing. Th ese units see a lot of use in pressure testing. Two tandem units are kept full of water in case a fi re pops up somewhere in the region.

Th ree combo vac units on tri-drive bodies have been a plus, according to Forseth. “We’ve seen a big change in that. It’s been a big asset to us.”

Th ese units have a heated pressure washer and boiler for hot, fresh water, in addition to their vac capabilities. He explained, “You can wash and suck as you go.”

“We have one semi-vac unit used for bigger spill or facility turnarounds.”

Th e gravel division has 12 units, with a variety of end- and belly-dump trailers. Th ey primarily work in lease building and maintenance, especially within the Weyburn unit.

“We build leases daily,” Forseth said. When moving gravel, it helps to have your

own excavators and payloaders, as well as your own gravel pit.

Staffi ngBrady currently has about 120 people on pay-

roll. Asked if they have enough staff , Forseth said, “At the present time, yes, we do. I do communicate with other guys that are ready to come on if things did come up. Of course, being part of the Mullen Group, we have access to other Mullen companies.”

Like many of the larger operations in southeast Saskatchewan, Brady has found a need to have its own housing for staff .

“We have apartments in Weyburn the company rents full-time. I think we have 10 units.”

Th e company also makes use of the former Griffi n School, which was converted several years ago into housing.

“We have three drivers there right now,” Fors-eth said.

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2014 Kenworth T800 with 38” Sleeper - Equipped with Full Throttle - T&E Outboard Hydraulic Drive Product pump. Magnum checkerplate 1/2 fenders, Roda positive air shutdown with revguard, Cummins 525 HP engine, Eaton Ultrashift 18 speed transmission, 13.2K Front axle with 13.2K front axle with 13.2K Taperleaf Spring Suspension, 46 K Dual wall dana spicer axles with Kenworth AG460 Air Suspension, Full lock-up, 11R24.5” Michelin Tires and Polished aluminum wheels, 10-3/4” x 3/8” Steel Frame, Holland No-Lube air fi fth wheel, Center mount tow pin, Dual fuel tanks - 230 gallon capacity with 7’ HD Straps, Air, Tilt / telescopic steering column, Cruise, Navplus (Includes: Navigation, Bluetooth, Sirius and Diagnostics), Kenworth Premium Diamond Interior Package, Kenworth Premium Leather Drivers Seat with air suspension, Passenger seat high back vinyl with toolbox, Cobra CB radio, power windows and door locks, Dual Moto lighted and heated mirror and stainless steel sunvisor. Stk# 968517

Oilfi eld Picker TruckEquipped with: Full Tilt Standard Deck Package with Fassi 95 Knuckleboom Crane, Paccar PX6 300 HP Engine, Allison Automatic Rugged duty Transmission, Hydraulic Brakes - No air endorsement needed, 8K Rated front axle and 13.5K rear limited slip axle rated at 11.5K, 13.5K Rated rear taperleaf spring Suspension, 9-7/8” x 1/4” Frame Rails, Removeable front tow hooks, 90 gallon fuel capacity, Air Tilt, Cruise, am/fm/CD Radio, Electric powered RH and manual LH windows, Power locks, Heated Mirrors, High back vinyl air suspension drivers seat and high back vinyl passenger toolbox seat. Stk# 956327

2012 Kenworth T170

2014 Kenworth T800

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Halbrite – There’s something in the oil that’s chewing up truck tankers.That’s the conclusion Brady Oilfield Services LP came to, and as a result,

the company has established its own on-site repair shop.The issue has been with aluminum trailers, adopted because their light

weight allows more product to be carried within weight restriction. Problems have arisen from failures of protective lining, a coating inside the tank. Cracks in the lining, especially in the sump area, can result in the aluminum being eaten away, rotted with holes. The result looks like metal Swiss cheese.

“Your coating does crack, allowing chemicals onto the aluminum. To repair a trailer can be a $40,000 repair,” said Lyndon Forseth, assistant director of field operations.

The resultant sandblasting, repair and recoating can take weeks, allowing for the new coating to dry. That puts the unit out of service for an extended period. Many haulers are now adopting stainless steel tankers that require no coating and are thus quicker to repair.

“With ‘old crude,’ it didn’t happen as much. But with Bakken crude, there’s something in the Bakken crude that’s terrible on trailers.”

Once they get caught up with their own repairs, Brady’s is considering offering the service to third parties at some point in the future. But there’s a lineup of trailers that has to be worked through first.

“At this point, lining is the issue. We really focus on the lining. We steam them out and inspect them ourselves. If the lining is cracked, we repair it. When we do the lining in our shop, we can bring it back in a year and do minor maintenance such as touch-ups. We make sure every bolt and bracket is coated.

Thomas “T.K.” Oman is the lead hand in the repair shop. His history with tanker trailers is long. He used to build them in his native Quebec.

Oman worked for Tremcar in St. Cesaire. “I started out running a forklift with sheets of aluminum or stainless steel,” he said.

“I’ve been doing this for six years, since I was 19.“I built them from the ground up. I know what they’re supposed to look

like.Oman is one of six people working in the tank repair shop.“I moved to Western Canada in 2009, working in Weyburn.”“These tanks are aluminum alloys. The acid in the oil doesn’t get along with

it. Nothing does but stainless. Bakken oil is higher in acid. It wears down the aluminum, valves, pipes. It eats everything. Even over time, it will get stainless.

“It’s not rusted, but more like rotten,” he said of the aluminum that is af-fected.

Page B25

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Page B24To prove his point, Oman went to the scrap

storage area behind the shop and pulled out a chunk of aluminum he had recently cut out of the sump area in the bottom of the middle of the tank on a trailer he is working on. A bracket from that piece is sitting in the main office, with more holes than a block of Swiss cheese.

Similarly, the area around the sump was rotten. Part of that is due to the placement of the load line. Running from the back of the tanker, it flows to the middle of the trailer, right above the sump. The result is any sand or particulates in the oil end up effectively sandblasting the bottom of the tank below it. This ruins the coating, and allows the cor-rosion to occur.

The pressure itself doesn’t help either, and screens don’t trap everything.

To combat this, Oman blanked off the old load line ports, and installed a new external load line. One of the negatives is that it is more subject to freezing. But on the positive side, the increased visibility means the operator knows when repair is needed.

“That was a 2008 trailer,” Oman said. The sump area of the trailer was completely

cut out and replaced with all-new 5454-H32 grade aluminum. Once everything was put back together, a new lining was needed.

In other instances, solids can build up in a trailer, forming something like cement.

“It literally makes cement you have to chisel out with a hammer.”

He pulled out a black piece that was extracted from around a valve in a tri-drive body job truck. He has to throw it on the ground for it to crack.

“That’s not good for the lining. The front (of the trailer) will cake, the back will cake. If the aluminum is black, it’s done. You have to sandblast it. ”

Halbrite – When it comes to having done it all, Brady Oilfield Ser-vices driver Lee Beacock might be in the running.

Pipeline News ran into Beacock when he was working with his tri-drive body-job tanker truck on a lease near Halbrite. The truck’s hose was hooked up to the service rig set-up as a wireline truck performed a multi-fin-ger caliper logging run looking for irregularities in the casing. But what does he, the truck driver, do?

“It varies. Some days you’re feeding the well. Others, they are bleeding the well back into the truck. Some-times you’re feeding the pump (truck) while they’re circulating the well.

“Sometimes you have a kill fluid on, other times you show up empty,” Beacock said. “Some days you’re there just in case, on standby, and don’t pump a drop all day.”

Brady Oilfield Services has 12 such tri-drive trucks whose prin-ciple purpose is to work with service rigs in a similar manner. The gas scrubber on the truck is helpful, dealing with the majority of H2S that may be coming off the well.

“This well, H2S is not an issue. But other wells can be up to 18 per cent. You always have to be aware of it,” Beacock said. As such, every well is treated as if

it is sour. A gas monitor pinned to his chest is a testament to that fact.

Beacock spent his early days in Ontario, including North Bay, Ottawa, and a place north of Toronto. The 59-year-old came out West in 1972 when he was 23. He’s worked on and off in the patch for around 20 years.

“I hauled fuel and propane. I’ve built hous-es, done renovations, fire and flood restorations, and sales – giftware and meat sales.

“I used to work in steel, aluminum and cast iron foundries. I’ve worked with 12 differ-ent metals and made moulds for them all,” he added, noting he did sand-casting.

“There’s nothing wrong with that,” Bea-cock said of his widely varied career. Employers often look for people with a broad range of experience, because those people can draw upon that experience to solve problems.

Now he calls the village of Dilke, Sask., home, where he lives with his second wife. While working in the patch, he stays in a holiday trailer south of Weyburn year round. He’s hoarded it in to tolerate the -40 C win-ters, and goes through a “pig” of propane each month in the winter to keep it warm. It’s a lot cheaper than other ac-commodations, however.

His wife used to work as a journalist,

Beacock added, working for the Toronto Sun. He says she was that paper’s first ever Sunshine Girl, a fact he’s quite proud of.

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Halbrite – Adorned in heavy, bulky coveralls, Keiaunna Stokes climbs into the belly of a large aluminum tanker trailer. She’s sweeping out the detritus from her previous sandblasting job done inside the tank. With each stroke of the broom, a puff of black sand belches from a hole on the bottom of the tank.

Page B29

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Page B28Despite the thick sandblasting coveralls and face mask, it beats pumping

gas. That’s what Stokes did initially when she came to Weyburn in April. The 19-year-old from Brandon, Man., followed her brother Dustin to Saskatch-ewan for work, and that brother works at Brady Oilfield Services in Halbrite. After a few months of pumping gas this past spring, she found herself working in the tank repair shop at Brady’s, for more than twice her previous pay.

“My brother works here,” she said. “It’s fun. It’s actually a really cool job.”Working inside the confined space, she wears a motion-detecting wrist-

band paired with a similar device worn by another woman working in the shop. If either stops moving for a minute, the opposite device goes off.

Asked what her friends back home think of her working in the oilpatch, Stokes said, “A lot of them say, ‘What are you going there for?’”

“The money’s out here,” is her response.

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Bienfait – On April 1, Winacott Equipment Group set up shop in Bienfait, and things are going well so far.

Th e Western Star and Hyundai Construction Equipment dealer’s presence in Bienfait is its third location after Saskatoon and Regina. Th e company also works on Cummins, Detroit and Cat engines, in addition to other lines.

Jerrod Tedford came on as a partner in the Bienfait location, having merged his former business of Timberwolf Mechanical Ltd. with the Winacott Group. Climbing down from the roof of a fracking truck, he spoke to Pipeline News about how it’s going.

“Good, busy,” he said. Comparing the location to his former haunt on the west side of Estevan, he said there’s way more room.

“It’s nice.”“I love the location. Seven or eight out of 10 vehicles that go by are trucks.”He was doubly pleased to fi nd out the province recently announced its inten-

tions to twin Highway 39/Highway 18 from Estevan to Bienfait, saying, “Th at’s perfect.”

Sales are still handled out of Regina, but there’s a truck, trailer, loader and excavator on site for customers to check out.

Th e location is the former Prairie Western Reclamation site, which sold out this past spring when the owners retired.

Th e fi rst shop had four trucks in it. Th e second shop has four large bays with room for ten regular tractor units. It’s large enough to pickers, cranes or service rigs in.

“Shop 1 is our heavy components – engines, transmissions, generators, load-ers,” he said.

In Bienfait they have two parts people, one service writer, four mechanics and Tedford, who, in his coveralls, said, “I’m still turning wrenches myself.”

It was a big day for him, as he had to pick up a recently acquired service truck. “We’ve had a lot of requests to make our service mobile, so we made it happen.”

“I’m running it, because the shop’s full.”He added the staff has grown enough in their experience that he doesn’t need

to be there 24/7. Th e addition of a parts manager will make a diff erence. Th ey are still in expansion mode, hiring in numerous positions.

“I still like being out there and interacting with customers. I’m way too hyper for a desk job,” Tedford concluded.

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Estevan – PTI Group opened the largest temporary accommodations facility in southeast Saskatchewan on Aug. 1 with the start-up of its Bound-ary Lodge near Estevan.

The camp has 346 beds, all equipped with private washrooms. There are 324 private “superior” rooms, 22 “deluxe” rooms, also known in the industry as VIP rooms, and four barrier-free “access” rooms.

Sean Crockett, vice-president of business development, spoke to Pipe-line News by phone on Aug 16.

“Our business model is based on servicing multiple clients and multiple projects in high-growth areas,” he said.

Oil and gas, as well as power, are the biggest drivers for this project.

Run as an “open camp” concept, anyone can book rooms, from indi-viduals to large companies.

The facility is located approxi-mately six miles northeast of Estevan, two miles north of Highway 39 and approximately one mile east of the planned route of the Estevan truck bypass.

The facility is substantial, with numerous wings connected by arctic corridors. All of it is on a veritable forest of steel screw piles to maintain

long term stability. The main arctic corridor runs east-west, with the vari-ous wings running north of it. South of the facility is a substantial parking area.

Dirt work began last winter.Just as every room has its own

washroom, every wing has its own laundry. Double-bed equipped “deluxe” rooms are 149 square feet, including washroom, and standard “superior” rooms are 121 square feet, with single beds.

Rooms each have a desk, satellite TV, lockable storage and individual climate control.

Quality accommodations make a big difference for companies’ work-forces, according to Crockett.

Every exterior door has its own boot room.

The recreation area has a mug-up room for snacks and drinks for when the kitchen is not open. It will include items like cookies, baking, coffee and tea. Once numbers warrant its open-ing, there’s a commissary area that will be a small store.

A theatre room has 24 very large, very comfy recliners and a large projection screen. In addition to recreational use, it can also be used for safety or orientation meetings. Out-side this room are two pool tables, an air hockey table and a foosball table.

Page B33

Harvey King & staff are eager to bring you the same quality service you have become accustomed to when dealing with:

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Page B32Eight computer workstations are also found in the recreation area. The

entire facility is wi-fi Internet capable, and wi-fi is free to patrons.There are two workout areas, one that has more aerobic machines, while

the second has more of a strength-training focus with racks of free weights in addition to numerous machines.

The kitchen facilities are large enough for a lodge almost twice the size, so if the Boundary Lodge ever needs to be expanded, they’re ready for it. There’s seating for over 200 people.

As is standard for such facilities, three meals a day are included. In addi-tion to a hot breakfast and a substantial dinner, there’s the bag-up room with numerous tables to prepare lunch. A large variety of sandwiches is offered, as well as “micro meals,” meals that can be warmed up in a microwave. These will vary from lasagna and spaghetti to enchiladas and stews.

A wide variety of fruits and salads are available as well. The cooler is well-stocked with drinks.

Rig box meals are also available. Not everyone goes out into the field at noon, especially if they’re working

shifts, so the kitchen provides a hot lunch at noon as well. Dinner is a big spread. When Pipeline News toured on Aug. 1, large racks

of ribs were being prepared in the commercial kitchen, and deserts filled the cooler.

PTI is trying to move away from the ‘camp experience,’ to a more ‘lodge experience,’ with better food, better facilities and a better all-around experience.

TimingHousing has continued to be an issue for the oil sector in southeast Sas-

katchewan for the last five years. Numerous hotels have sprouted up, new housing is being built, but it still doesn’t appear to be enough. Almost every story Pipeline News has covered in the region during that time has noted the intertwined issues of housing and labour shortage. However, there may be some relief in sight as the Boundary Dam Carbon Capture Project, which employed a peak of approximately 1,100 workers, is nearing completion.

Crockett said, “Timing is everything. We have seen a lot of ongoing de-mand.”

“Our model is to be there for the long term, not the short term.”For this project he said PTI is looking at five to 10 years as a “minimum

outlook.”Asked why PTI chose a location some distance from pavement, Crocket

said they consulted with the RM of Estevan and felt it would be an area well-suited in the long run. A combination of land price and availability were other factors. Page B34

Page B33PTI has a number of camps in the region now. Th ere was a short-lived

facility at Weyburn that was only in position for about a month and a half between December 2009 and January 2010. But their other facilities since then, in Redvers and Waskada, Man., have fl ourished. Redvers has a 49-bed dormitory-style unit with common washrooms, a 42-bed Jack-and-Jill wash-room dormitory, and a further 12 private rooms.

A camp just north of Waskada was crucial in the region becoming one of Manitoba’s hotspots for drilling in recent years. Th e tiny village had next to no temporary accommodations until the camp was set up.

Now PTI has a facility in the works for the east side of Melita, Man. Numerous camp unit modules are sitting on blocks, and dirt work has been done nearby. Crockett said as PTI was a public company, he couldn’t make forward-looking statements regarding Melita at this time. He called it “a future project development still in the engineering phase.

“We have been active in that area for a number of years,” he said.At Estevan, the Boundary Lodge will eventually employ approximately

35 people. “We’ve been in conversations with a number of clients in the area,” Crockett said. “We’ll be fully operational in September and we’re an-ticipating a strong run in the region.”

Estevan – Everything in the field needs maintenance. That’s where companies like Estevan’s Endurance Oilfield Supervi-sions and Construction come in. They’re the ones in the crew trucks, heading out each day, keeping things running.

Owned by Mike Irvine and his wife Heather, who acts as of-fice manager, Endurance started operations in May 2011. Their initial projects included building several batteries for Gibson En-ergy at Stoughton and Oungre. They still work out there, per-forming all sorts of maintenance.

Endurance does general oilfield maintenance. Servic-ing tanks, for instance, involves cleaning them out, inspecting them visually or having a certi-fied inspector come out. Similar work is done with treaters.

“Lots of times we’re the sec-ond crew on treater work, pulling pipe while another crew services it,” said Irvine.

Endurance does a lot of tank and pipe work. Setting tank farms and hauling light towers are other examples.

“It’s basically all pipefit-ting. We do pumpjacks once in a while,” Irvine said, noting that some companies have focused on

pumpjack service. “We do lots of vapour

recovery systems. We started tak-ing on some pipeline work too, working with another contractor. We’ll pressure test it and tie it in.”

“My guys are all certified for installation and building with AOS pipe,” he said, adding that such certification is not common in the area.

The certification includes red and green thread, as well as silver streak pipe.

“We do a lot of structural welding now, too – pipe stands, catwalks and barrel stands,” he said.

Six people work with En-durance besides the two owners, running three crew trucks. Two are Ford F-550s, and the third is a Topkick 5500, added last December. Two have pickers, one has a small crane.

Much of the work is done close to home, in the Midale, Oungre, Lampman and Stough-ton areas.

One of their highlight projects was setting up the tank farm for the Aquistore project last year. Aquistore is a carbon dioxide injection project that will send captured CO2 from Bound-

ary Dam Power Station into deep saline Aquifers. The Aquis-tore injection and observation wells are the two deepest wells in the province.

Crews usually know the night before where they will be heading the following day. “A lot of the consultants go di-rectly through my foremen, Kyle Scholpp and Jason Berg, and I don’t need to be a third wheel. I still oversee projects. I still crew a truck, too.

“We usually plan ahead the day before. There’s always those phone calls in the morning that change everything.”

One crew generally follows one company, another follows two other larger clients. “And I pick up everything in the mid-dle,” Irvine said.

In the spring of 2012 the company moved into larger quarters on the west side of Estevan, taking over the building they previously only had a bay in.

In the future he’d like to perhaps add one more truck, but Irvine would like to keep the staff number under 10. That’s the magic number between SECOR and COR certification. SECOR, or small employer certificate of recognition, cuts off at 10.

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Macklin – Dirt roads and flying rocks generate plenty of windshield replacement jobs at T+T Collision Repair, a Macklin company that is owned by Tony Hauck.

Unfortunately, some of those broken windshields belong to the two Macklin Vac trucks that he and Brad Berezowski co-own as a separate business.

“It’s a constant process out here doing your safeties – you always have to have good glass. That seems to be a constant business,” said Hauck at his T+T Collision shop.

“It’s another business that we ser-vice the oilfield with. We’ve been here for 32 years and certainly the growing oilpatch has always been a part of our business, but it’s not all we have.

“We work with everything from the smallest Toyota up to the largest vac trucks, oilfield haulers, semis – lots of Peterbilts.

“We do lots of windshields and fibreglass work for all different types of trucks – Kenworth and Western Star.”

The Macklin Vac trucks are main-tained and parked at another business location and are sub-contracted to Prospector Oilfield Services which is based in Provost, Alberta.

By running under the Prospector name, Macklin Vac saves the expense of obtaining a Certificate of Recog-nition for safety and hiring its own dispatcher.

“They do a whole range of pres-sure trucks, vac trucks, steamers hot oilers and combo units. They are the biggest competition around here for Clean Harbors,” said Hauck.

“We were running by ourselves for awhile, but it got to the point where oil companies were telling us we had to have certain courses.

“There’s larger dollars in that side of the business in safety, and if you’re doing it just for two trucks it doesn’t pay. If you have a safety co-ordinator

for 30 trucks, you pay.”Hauck said they also gener-

ate dispatch business as Prospector trucks, but he credits Berezowski for gaining the bulk of vac work and clients in the area over the years.

“Brad’s built a solid reputation for his work ethic and his knowl-edge. This is transformed into a lot of business on our own, but we do still depend on Prospector to get work for us,” said Hauck.

Hauck said he started the busi-ness specifically to provide Ber-ezowski with a job when his previous

employer moved out of the area. “A guy by the name of Terry

Gramlich phoned and said, ‘Hey Brad’s liking the area and wants to stay around. Why don’t you get a vac truck going and put him to work and partner up with him?’

“So that’s what happened. That was 1996, I guess,” said Hauck.

Hauck said his role in the com-pany as the manager is “just to keep everything going and pay the bills and make sure the tickets are all in” so everyone gets paid.

Page B38

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For more information please contact Scott Nichol @ 306-461-8336

Shop area is approximately 2200 sq.ft., as

well as negotiable office space of 500 sq.ft. with

1.5 acres of yard space.

Page B37“Brad’s the guy in the field and always has been.

He does a hell of a job. He’s been at it for 20 years – very sought after because of his thoroughness and experience,” said Hauck.

Mike Flanagan drives the second truck that is parked at his home in Unity during the summer months.

By Hauck’s estimate, the two Prospector

Oilfield trucks work for as a many as 46 different companies in the area.

“It’s mostly infield stuff and the disposal stuff will go to Unity CCS. Mostly, its fluid transferred within the batteries, but if there is disposal stuff it has to go out,” he said.

Berezowski was hosing down his vac truck in the shop while there were hundreds of visitors in town for the start of the 21st annual World Bun-nock Championships on Aug. 2.

“I had some mud on it and just wanted to make it a little clean – more respectable,” he said.

“I’m taking it out to Pengrowth to do a mud can for a guy I work with quite a bit. They phone me direct a lot of times too.

“We get dispatched out, but a lot of guys just phone me direct. I have to co-ordinate with the dis-patcher at the same time.”

Berezowski gets a lots of calls from Pengrowth, Penn West and Plains Marketing and a host of smaller companies like Black Shire Energy and Arsenal Energy.

“We do all kinds of things like oil spills and transfer fluid and stuff like that. There is always something to do. It keeps a guy out of trouble any-way,” he said.

“It’s pretty steady, but it’s got its downtimes too. It picks up and it kind of slows down a little bit. Occasionally, you get the rains and whatever else.

“We’re out pretty much every day. Some days aren’t big hours and some days are big hours. It var-ies from day to day and job to job.

“Sometimes the jobs overlap so much that you can’t catch them all.”

Berezowski originally hails from Yorkton, but has lived in Macklin for the past 20 years.

He has yet to try his hand at bunnock, a team

game played by tossing horse ankle bones at the opposing team’s bones.

“I got to try it one of these years, but it seems like every time I want to get in there, it’s either booked up or I’m on call for the weekend,” he said.

When Berezowski is busy, Hauck’s easy going smile widens, but as a business owner and a former mayor, he’s seasoned to the ups and down of the oilfield in the Macklin area.

“This is probably a good time,” he said. “You get the lows when it’s hard to keep employees and keep everybody generating work, so those are the times you don’t like.”

“The oilpatch is always exciting – not necessar-ily all good excitement. Sometimes it can get a little scary, but it’s been good.

“I’ve enjoyed every minute of it and working with Brad. He’s been great. He’s experienced and knowledgeable. It makes my job pretty easy.”

In the current uptick, accommodation is scarce in Macklin, but Hauck had the foresight to pur-chase a few rental duplexes and fourplexes for his employees, including a Filipino worker who is expected to arrive soon.

“Housing is tight. You get about 10 calls a week,” he said.

Hauck said Macklin has managed to retain its core oilfield service businesses over the last few years without a lot of noticeable growth.

“We have some big players with Clean Harbors and supply companies with Weatherford, MRC and Kudu – those type of businesses have been here for long periods of time and sustained it,” he said.

“There hasn’t been a large influx of oilfield companies, but we’ve managed to maintain what we have and keep a presence in the oilfield which has helped the town.”

Cordell JanssenDistrict Manager

Downhole

93 Panteluk Street, Kensington Avenue NEstevan, Saskatchewan

PHONE: 306-634-8828 • FAX: 306-634-7747cordell.janssen@nov.com • www.nov.com

24 Hour Service

Reservations: 306-453-2686

For more information or to apply online, please visit our website at: www.tervita.com/careers

Tervita is a leading environmental and energy services company that provides the energy

industry with a comprehensive suite of services that include waste management, drilling

and coring, well servicing and other environmental services that cover every stage of the

production lifecycle from development to reclamation.

We are looking for a permanent full-time Landfill Operator for the Lomond Landfill site

located 40 km South of Weyburn. We’re seeking self-motivated individuals with attention

to detail who thrive in a team environment. To qualify you must have a valid driver’s license,

a strong mechanical background and heavy equipment operating experience. D6 Cat and

excavator experience would be an asset. Our ideal candidate will also have a proven track

record in health and safety performance with, at minimum: first aid, CPR, WHMIS, TDG, and

valid tickets. You must also have excellent customer service skills as you will be interacting

with customers, truck drivers and other Tervita departments.

LANDFILL OPERATOR – Weyburn, SK

Competitive Wages OfferedHealth Plan, RRSP’s & Bonuses

OILFIELD LABOURERS

REQUIRED

TO ASSIST WITH OILFIELD TUBULAR

INSPECTION.

SUCCESSFUL APPLICANTS MUST PASS PRE-EMPLOYMENT

DRUG & ALCOHOL TESTING AS WELL AS PHYSICAL FITNESS

TESTING.

CLASS 5 DRIVERS LICENSE PREFERRED. PREVIOUS OILFIELD EXPERIENCE PREFERRED, BUT NOT

REQUIRED.

DROP OFF RESUME AT

341 IMPERIAL AVENUE, ESTEVAN

OR FAX: 306-634-2606

OR EMAIL: ESTEVAN@GUARDIANOIL.COM

NO PHONE CALLS PLEASE

Hunting Titan (Canada)

Warehouse Supervisor

A world-class manufacturer of Perforating Gun Systems, Wireline Hardware and Accessories, Shaped Charges, and Electronic Logging Tools for the oil and gas service sector. Hunting Canada, puts people at the center of everything we do - from protecting the safety and health of people and the environment to helping you succeed.

The Warehouse Supervisor is responsible to supervise and coordinate the management of the Estevan warehouse for all product lines.

Requirements are:

• Familiar with all OH&S, DOT, and AFT applicable regulations as well as • Meet all applicable regulations in reference to handling hazardous material such as receiving, storing and delivery of explosives• Minimum 2 years of related experience and/or equivalent training

Please email your resume in Word format todoug.ford@hunting-intl.com

Class A or B boom ticket or apprenticeship required.

1A drivers license required

Safety tickets an asset, but we will train and invest in the right individuals.

1*34

Shaw Earth Moving is a family owned business in South East Saskatchewan. Shaw Earth Moving offers an array of equipment and services that caters to both the needs of Oilfield construction and RM road building. We are a diverse company looking to hire heavy equipment operators and 1A operators for both divisions. We offer competitive wages based on experience and ability. Valid driver’s license is a must. Safety tickets and training are an asset but not crucial. As well as competitive wages we offer a group benefit plan.

We are now accepting applications for the following positions: Cat Operators, Grader Operators, Track Hoe Operators, Scraper Operators, Tandem Gravel Truck (3A), Heavy Equipment Haulers(1A).

Please fax or email resumes to: 306-685-2267 rhonda.shaws@sasktel.net

101 Supreme St. (Shand access road)

Class 1A & 3A PreferredAbove Industry Wages

Benefits PackagesOpportunity for AdvancementEmail: sleibel@suncountrywellservicing.ca

Fax 306 634 1200 • Cell 306 421 3418

SERVICE RIG PERSONNEL

Applied Industrial Technologies LP. a group of industrial distribution companies located throughout Canada, and we are currently seeking qualified individuals to fill the position of:

Customer Service RepresentativeEstevan, Saskatchewan

Responsibilities include but may not be limited to:

• Providing service to branch customers and managing assigned product lines or customers. • Active involvement in company’s Quality Management process as evidenced by continuous improvement in processes directed toward reducing costs, increasing sales/gross profit and customer satisfaction. • Carries out policies and procedures as defined in the company policy manual. • Continuous development through reading, seminars and on the job training. • Provide a high level of customer service to branch customers including timely, accurate responses to inquiries. • Cross train to assist or fill in when fellow team-mates are absent or their workload volume is high • Work with distribution centre to expedite special requests as necessary • Engage in direct sales actives • Provide telephone support for outside sales force • Meet or exceed sales performance targets • Ensure accurate, timely order processing through the computerized order processing system • Maintain cooperative and productive inter-departmental relationships • Attend branch meetings as required • Take personal responsibility for and actively engage in product systems and skills training and development • Maintain highest regard for safety and housekeeping • Perform other similar or related duties as assigned by the branch manager or supervisor.

Preference will be given to candidates with the following qualifications and attributes:

• High School or equivalent • Related industry experience or 3-5 years industrial inside sales experience preferred • Bearing and power transmission experience is a definite asset • Proficient computer skills, experience with SAP is an asset • Sales and customer service experienced • Mechanically inclined • Ability to work independently • Analytical and problem solving capability • Enthusiastic and exhibits a positive attitude and desire to succeed

Applied Industrial Technologies offers competitive salary, comprehensive group benefit plan, company sponsored RRSP/DPSP, ongoing opportunity for training and development and promotion within the company. Send your resume to aithire@aitcanada.com or fax attn.. Chris Babyak 403-214-1423.

Interested in joining our team:Email: info@denmax.ca

Fax: 780-842-3385

Benefits you

can count on!

Eagle Well Servicing knows that

supporting your family is a

priority! Eagle offers a very

competitive health and dental

benefits package combined with a

great hourly pay rate and

excellent opportunities for growth.

You can’t go wrong with a rig job

with Eagle Well Servicing!

Apply today!

Email resumes to:

Estevanrigjobs@iroccorp.com

Or call: 306.634.8235

www.eaglerigjobs.com

Floorhands

Derrickhands

Drillers

Rig Managers

Well Servicing

Darren Williams - VP Of Sales Tremcar Inc. Sales (306) 361-5559Northern Saskatchewan - Jason Hugo (306) 551-8265

Southern Saskatchewan - Suzanna Nostadt (306) 861-2315

Tremcar West Inc. offers our customers a certified

repair shop with qualified workers specializing in:

• Tank Trailer Repair • PIVK B620 Inspections

• Auto Greasing • SGI Inspections

• Trouble Shooting ABS Systems

• Stock and Sell Parts • Leasing Available

• Titan Gauge Repair and Calibration

Suzanna Nostadt - Vice President (306) 861-2315Bruce Palmer - Service Manager (306) 861-2841Bill Hunter - Parts Manager (306) 842-6100

NEWLOCATION

#216-20th Ave SEWeyburn, SK(306) 842-6100

NewsPiPeliNe seCTiON C

September 2013

Pipeline News is two sections this month. stayed tuned for

Automation/instrumentation