construction | Northwest Coast Energy News

Bish Forest Service Road reopens to the public on March 1, 2015

The Bish Forest Service Road will reopen to the public on March 1, 2015. With the upgrades created by the Chevron-led Kitimat LNG project, the single lane logging rough logging is now a high quality gravel “resource road.”

The first 12 kilometres of the road will be open “to provide public access to connecting roads, recreational areas and natural hiking trails,” Chevron says.

“In terms of Kitimat specifically we’ve completed a number of key projects,” said David Molinski, Chevron’s lead for Regulatory and External Affairs. “We’ve made the upgrades to the Forest Service Road, and the Early Works we’ve been doing on site at the Bish Cove site.

Bish FSR — A construction check point on the Bish Forest Service Road during a media tour, October, 2014. (Robin Rowland/Northwest Coast Energy News)

“So we’ve been for the past couple of years putting a lot of effort on advancing that part of the project. We’ve completed the key elements of the Forest Service Road upgrades over the past four years,” Molinksi said, “When we got there it was essentially a single track logging road and it was very difficult to access the Bish Cove site. So we wanted to make sure we had a road that would help support the project. That means having an all weather access all year round. That’s a very substantial development.

“It’s a public road, it’s always has been a public road, in fact it’s owned by the Crown.

“It’s time now for us to reopen that road. We had it closed for safety reasons. We wanted to make sure we completed the work on the road. There was blasting, moving rock, breaking down rock, stabilizing slopes.

“We had to make sure we could that work done in a safe way. Now that’s done, we’ve completed the road upgrades and we’re very happy to reopen it to the public. We look at it as being a long term legacy for the community.

Safety poster — Safety rules for travelling on the Bish Forest Service Road. (Chevron poster)

“The road is available for people in the community to use. There’s a number of recreation sites people in the community have used for many generations. So we’re pleased we can turn that road back into being publicly available and they can use it safely so they can get access to the areas they love around this community.”

In 2015, Chevron says, some work may continue on the road and “may include power line installation, paving and other construction activities.” There is also a need for the road to “stabilize” Molinksi said. “We’ll come back down the road and make a decision about what the right timing is to cap that road. Right now we don’t have a specific schedule It’s good for the road to stabilize and settle over the next couple of seasonal cycles.”

The decision about the future of the road will depend on the uncertain investment climate, due to the downturn in the energy industry.

In a panel at the open house on Feb. 24, Chevron said that projects like Kitimat LNG “are significant, very large and extremely complex with multiple moving parts that must all come together through hard work and perseverance in order to be successful.”

Chevron will continue to make a capital investment on the Kitimat side of the project but “the pace of field work in Kitimat at the LNG Plant will be decreasing as we focus capital spending on other aspects of the project.

For 2015, Chevron will concentrate on exploration in northeast British Columbia, Molinksi said, “That’s where the Liard Basin and the Horn River Basin are located and that’s where we’re developing the natural gas, substantial natural gas resources to support this project… This year we’re going to focus on getting additional data on the natural gas that we have a number of rigs that are running right now. We’re going to be drilling wells over 2015 and make sure we have a good understanding of those wells that are going to be supplying gas to this project. We have to know as much about that resource as this site here.”

“As a result there will be a decrease in site preparation work associated with the Kitimat LNG project and the Pacific Trails Pipeline during 2015,” the Chevron panel said.

LNG, Clio Bay construction superintendent contract position posted on job sites

A job for a “construction area superintendent” for both the Kitimat LNG plant and the Clio Bay restoration appeared on job sites in the world wide web on October 1. The posting expires on December 31.

The job was originally posted by Brunel Energy, a consulting firm that describes itself as a company that “provides specialist personnel to the international oil & gas, petrochemical, power generation and construction industries.”

The contract job, which, requires 20 years experience and will pay between $1,500 and $2,500 a day, calls for someone who would be “developing project level execution plans for EW&I, LNG Plant & Clio Bay restoration program, and implement/control against these plans in accordance with Project Management System (PMS) processes, procedures and standards.” That superintendent will eventually turn over “functioning facilities to LNG Plant or operations staff.”

As well as standard requirements for a giant construction job of this nature, the requirements include:

• Represent the Company in all interfaces with BC and Kitimat agency associated with EW&I construction activity. Maintaining a positive relationship with the agency by conforming to all regulations and resolving areas of uncertainty in a mutually agreeable manner.
• Maintaining positive relations with the First Nations Haisla representative, recognizing them as a partner and owner of the overall Kitimat LNG Project Development.

Chevron and Apache are partners in the development of the KM LNG project at Bish Cove.

Kitimat approves building permit for KM LNG construction camp

Ron Link of KM LNG addresses District of Kitimat Council on a building permit for the work camp. (Robin Rowland)

District of Kitimat Council tonight (March 4, 2013) approved building permits for the KMLNG work camp at the old West Fraser Eurocan paper mill site.

The first phase of the camp, called 1A will have 155 beds, followed by a second camp, called 1B with 145 beds. Council also approved a second phase, Camp 2, which will have an additional 300 beds. The camp will consist of single-storey, 44 bed dormitories, similar to those now being used at the Rio Tinto Alcan Kitimat Modernization project, a couple of kilometres away.

“This camp will support the construction of the LNG terminal,” KM LNG’s Ron Link told council, “the focus right now is a 600 man camp. Beyond that, if the final investment decision is approved, it will eventually grow to 2,800.

To build the camp KMLNG will have to demolish some of the remaining blow pipes and chip screening facilites that are there.

“Under the regulations it is a contaminated site and we have a company called Constega Rovers that are participating in sampling the site. It is certainly our attention to clean it up.

If the full 2,800 bed camp is built, the remaining part of the facility will be directly west of the current proposed campsite.

Later in the meeting council continued to debate the contenious issue of an over all camp policy for the District of Kitimat and voted to instruct district staff to “bring back a calendar with the process and dates for discussing camp policy.”

Staff would prepare a document indicating where camps are presently permitted within the District of Kitimat followd by a committee of the whole meeting dedicated to the pros and cons of camps within the district and perferred locations, services provided by the district and size limits.

There will likely be both a public town hall and a “public meeting” of council to discussion the issues later in the spring,

The debate was prompted bya proposal from the PTI Group to build a large “lodge style” work camp within the boundaries of the residential part of Kitimat, near the hospital and City Centre Mall. The PTI proposal would require amendments to both zoning and the Official City Plan. The KMLNG and RTA camps are in areas zoned for industrial use and would not be affected by a change to the official plan for the residential area.

Apache posts job for Kitimat LNG construction manager

The Apache Corporation website has a posting for a construction manager for the Kitimat LNG project.

The posting says the job will initially based in Houston, Texas, with the manager coming to Kitimat sometime in the future.

The posting calls for the manager to provide an overall construction plan, co-ordinate and control the construction project from inception to completion aimed at meeting the Project’s requirements in order to produce a functionally and financially viable safe project that will be completed on time within the authorized budget and to the required quality standards.

Some of the job requirements give hints of the project to come:

Previous LNG Project experience including construction
Experience of modular and stick built construction
Working knowledge of safety system and management to maintain world class safety performance
Working knowledge environment system and management to maintain world class environmental performance
Knowledge of logistics in remote sites
Knowledge of heavy haul and lift works
Proven ability with advanced project management principles
Proven ability with people management
Experience in Canadian labor law and have deep experience working with unionized labor
Experience in working through cold weather climates

The site also has a posting for a Contracts and Procurement Manager.

Both postings expire on May 2, 2012.

Although Apache and its partners, Encana and EOG Resources now say that they have postponed the final go-ahead decision on the KM LNG project until the fourth quarter of 2012, as negotiations continue with Asian natural gas customers, the postings are indication that the project is progressing.

Not just energy: Asia’s demand for aluminum brings $2.7 billion upgrade for RTA Kitimat smelter

Aluminum
Rio Tinto Alcan president primary metals, Jean Simon, announces the go-ahead for the Kitimat Modernization Project at ceremony at the plant in Kitimat, Dec. 1, 2011. (Robin Rowland/Northwest Coast Energy News)

“It’s a go.”

The “go” meant that the Rio Tinto Alcan board had finally approved spending $2.7 billion for the long awaited Kitimat modernization project that would update the 60-year old aluminum smelter, increasing production capacity by 48 per cent to 420,000 tonnes a year.

Rio Tinto Alcan primary metal president Jean Simon made the announcement Thursday, Dec. 1, 2011 to cheers at a theatre (converted from the dining hall) at the new construction camp at the Kitimat smelter.

That money is in addition to expenditures already approved, bringing the total investment in the modernization project to $3.3 billion US.

“This will help us put Kitimat and Canada at the forefront of the 21st century global aluminum industry,” Simon said. “It is a truly transformational project.” He said it was in line with RTA’s long term strategic objective of long life, large scale, low cost assets. The project, Simon said, will take advantage of Rio Tinto Alcan’s competitive advantages: clean self generated hydro power and leading edge technology.

If all goes as expected, the first new metal will be poured in the first of half of 2014.

The new smelter will use a RTA proprietary smelting technology that reduce carbon dioxide emissions by 50 per cent.

The long planned project had been put on hold in 2008 as the world weathered the financial meltdown.

Kitimat mayor Joanne Monaghan said at the ceremony, “This is something our community has been waiting a very long, long time for….Kitimat has suffered through some very had economic times over the last several years and this announcement means we have the certainty that the aluminum business will be here for the next 35 to 50 years… We’ve seen a lot of industry disappear from Kitimat over the past few year and its been hard on our community. In fact, with Methanex leaving, with Eurocan leaving I felt like the mayor of doom. And then, all of a sudden, all of these things are happening. And I feel like the mayor of boom.

“We know the importance of that first initial investment to show that Kitimat is the strategic place to invest. And when RTA began its expansion, and its construction camp, then all of a sudden three LNG plants came on stream. We had a biomass plant ready to come in. So thank you Alcan for starting that whole trend for people coming into our community.”

It is Asia is fueling Kitimat’s new boom, and not just in natural gas, but also in aluminum. When Kitimat was planned and built 60 and more years ago, Asia, China, Japan, Korea were in ruins, devastated by the Second World War. Now it is Asia, and the short great circle route from Kitimat harbour to the market ports, that is one reason that the Kitimat modernization project was approved.

“Most of the aluminum is going into Asia. Korea, Japan and other countries,” Simon said in a post-ceremony news conference. “We’ve been producing here for 60 years and Kitimat has always been recognized as a very solid, reliable and good quality producer of aluminum so our customers from Asia are demanding the metal from Kitimat. So this is good news for them too.”

Paul Henning, RTA vice president of BC operations, is not only a corporate manager. He was the very entertaining master of ceremonies for the announcement. (Robin Rowland/Northwest Coast Energy News).

Paul Henning, VP BC Operations and strategic projects Western Canada, was asked if Kitimat can handle the demand and possible bottle necks with, as well as Kitimat modernization, three LNG projects, possibly the Enbridge Northern Gateway pipeline and perhaps other projects in the coming couple of years.

“The good news is that we’re first,” Henning said. “The folks who grab the ball usually have a chance. We’re working with those folks. People availability will be the key. I think there’s a lot of common sense going on, these are mega projects. Mega projects need lots of people. I wouldn’t call it coordination, but there is an understanding. They understand our timing, we understand their timing.

“All being equal we’re not competitors. It’s going to be an extended boom for the region. And of course, the projects are stacked, all trying to happen at the same time.

“It’s challenging, just for resources and infrastructure. If they can be spread, it’s a win, win, win. At the end of the day Our business drives what we do in the timing. Their business care drives their timing. At the end of the day, we’re first in.”

Thursday wasn’t the best day to show Kitimat off to the world, with a cold wind driving sleet, snow and rain all at the same time. BC Premier Christy Clark’s plane was turned back from Terrace Kitimat airport and a second aircraft with RTA CEO Jacynthe Cote was redirected to Prince Rupert.

RTA employees and guests watch a slideshow of historic photos of the early days of Kitimat before the official ceremony announcing the go-ahead for the Kitimat modernization project. (Robin Rowland/Northwest Coast Energy News)

As the audience and guests waited for the arrivals that were not to come, there was a slideshow of historic photos on giant LED screens, showing the early days of Kitimat, the construction of the dam, transmission lines, townsite and the potlines.

Then the elaborate ceremony began, with Paul Henning acting as master of ceremonies, introducing the Haisla Spirit of the Kitlope drummers before Simon made the “go” announcement.

It was good community relations that helped the RTA board give the go-head, Simon said.

“We will also honour the landmark Haisla Nation, Rio Tinto Alcan Legacy Agreement and are proud of this partnership to provide opportunities and training and that is resulting in increasing numbers of Haisla Nation members working on the project,” said Simon.

Haisla chief councillor Ellis Ross had been flying up with Christy Clark, so Councillors Henry Amos, Alex Grant and Keith Nyce were at the ceremony on behalf of the Haisla. “On behalf of the Haisla Nation, we offer you a warm welcome to our Traditional Territory. The Haisla Nation has worked very closely with RTA and supported the reality of this important and exciting decision. Together with RTA, our Nation is very proud of the legacy agreement we have reached.” Nyce said.

The Haisla are not only our closest neighbours but our best friends,” Henning said at the news conference. “It hasn’t always been like that. I think leadership from the Haisla, starting with Steve Wilson, transferring to Ellis Ross. Ellis has taken it to another level. The recognition of wanting to engage in the future was the key. We had to recognize and respect that past, to learn how to work together and build for the future.

“It’s actually a cohesive joint approach to economic development and sustainability within the Haisla First Nation and the plant. It actually betters the plant because we have employees that live here, work here, there are 120 Haisla folks who are working within the operation. That to me is sustainability in real time.”

Henning is also confident that the company will successfully negotiate a new contract with the Canadian Auto Workers local. Henning said that 2007 contract was designed to get the company through to first hot metal but then the financial crisis struck.”The good news gives us certainty.”Henning said. “We know what we have to drive for. We’ll get a contract, we’ll get a contract, we always do. Some are prettier than others. The confidence from this is a great start. The union were here today, I am confident that we will get through and get a contract that really fits this program.”

After he took the podium, Michel Lamarre, director of the Kitimat Modernization Project joked. “We often say that when we get married, and it’s raining, the marriage is very strong and I think this is going to be the case for the KMP project.” He said Kitimat management had made a very solid case for a very solid project to the RTA board.

Michel Lamarre, director of the Kitimat modernization project, talks about the challenges of the next two years until first metal in 2014. (Robin Rowland/Northwest Coast Energy News)

“We are building a state of the art facility which will be a jewel. This is something we can all be proud of… The next two years will be very busy and very exciting. Let’s build the project with zero harm, zero harm to the people who are building it and zero harm to the environment.”

The weather was just too nasty for an official ground breaking ceremony at the construction site, so it was moved indoors, with RTA executives and employees, the Haisla representatives and Mayor Monaghan turning the shovels into a ceremonial pile of dirt.

The indoor groundbreaking ceremony marking the approval of the Kitimat modernization project. Left to right Michel Lamarre, director KMP, RTA operations employee Ron Leibach, Brent Hegger, VP major projects, Kitimat mayor Joanne Monaghan, Jean Simon, RTA president primary metals, Paul Henning, VP BC operations and Henry Amos, Councillor, Haisla Nation. (Dwight Magee/RTA)

Kitimat Methanex dismantling contract cancelled by Chinese buyer

Kitimat

Updated Nov. 15, with Shell statement
The Chinese company that bought the plant and equipment at the Methanex site in Kitimat has cancelled the dismantling contract according to the company that was doing the work.

Blue Horizon Industries of Red Deer, issued a news release early Monday, Nov, 14, saying that Ko Yo Development had issued a termination notice of the contract.

Blue Horizon’s parent firm BH Energy says it has

objected to the grounds for termination alleged by Ko Yo
and intends to vigorously enforce its rights and remedies under the
agreement and otherwise available at law against the contracting parties
for amounts owing to date as well as further damages.

Blue Horizon says it was in the final stages of dismantling an ammonia
plant and a methanol plant at Kitimat B. C. for Ko Yo and readying them
to be shipped to China. The company says that from February 2011 to date, BH Energy has been
paid and or credited by Ko Yo approximately USD $15.9 million of the
$20.4 million contract.

Donald Allan, President and CEO of Blue Horizon, said “We are
disappointed that we will not be given the opportunity at Kitimat to
finish the job for Ko Yo, who are experiencing significant logistical
issues… He added the company would proceed with other projects in other areas.

Ko Yo Chemical (Group) Limited, formerly Ko Yo Ecological Agrotech (Group) Limited, is a Hong Kong based investment holding company. According to a company profile it is engaged in the research and development, manufacture, marketing and distribution of chemical products, chemical fertilizers and bulk blending fertilizers and has a natural gas energy utilization project at Dazhou City, Sichuan Province, China. The company has a number of subsidiaries with similar names.

The contract to dismantle the old Methanex plant was signed in February, 2011 and then renegotiated in September, 2011. (pdf)

Shell purchased the Methanex site and marine terminal in October, 2011, as part of its plans for a liquified natural gas facility at Kitimat. Shell spokesman Stephen Doolan told Northwest Coast Energy News “The transaction … does not affect Shell’s purchase of the Cenovus property, nor is Shell involved in any way.”

Editorial: Any one who believes the Northern Gateway can be fast tracked is out of touch with reality

Editorial

In the past few days there has been a lot of comment from politicians, pundits, columnists and business analysts about “fast tracking” the Northern Gateway pipeline project now that the United States has postponed approval of the Keystone XL pipeline.

If anyone wanted proof that these people are completely out of touch with reality, the past three days has proven it beyond any reasonable doubt–and it has absolutely nothing to do with politics.

For the purposes of this editorial, let’s assume, just for the sake of argument, that there was no opposition, but one hundred per cent support for Enbridge’s project to build the pipeline from the Alberta bitumen sands to the port of Kitimat. Let’s assume that the Minister of Natural Resources, Joe Oliver, was successful, as he is quoted today, in expediting the approval process by the Northern Gateway Joint Review Process.

After all that, could the Northern Gateway be “fast tracked?”

No.

Let’s ignore, for this argument, any of the objections that the environmental movement has raised against the pipeline.

Let’s instead take one argument that Enbridge has used to promote the pipeline project, that the Northern Gateway is another “national dream,” the equivalent of building the Canadian transcontinental railway more than a century ago.

The problem with the majority of economists, as always, is that they think that they are dealing with a spreadsheet not the real world. Just move everything from the Keystone column to the Northern Gateway column. The bitumen goes to China instead of Texas, and the money rolls in.

The problem with cabinet ministers like Joe Oliver and Jim Flaherty, proponents of fast tracking the pipeline, is that either they are not getting the proper briefing notes or they are ignoring those briefing notes. (That is scary when it comes to Flaherty since he is supposed to be guiding the Canadian economy).

As noted earlier, the business columnists and analysts don’t even bother to read the technical studies posted by Enbridge on the Northern Gateway Joint Review site.

The bitumen pipeline is planned to cross 1,172 kilometres of challenging terrain from the bitumen sands to Kitimat. The parallel condensate pipeline is planned to cover 1,172 kilometres from Kitimat to the bitumen sands
.
Why does Enbridge call the pipelines the equivalent of the great railway construction of the nineteenth century?

The pipelines will have to cross some of the most rugged territory on this planet; mountain ranges, including the Rocky Mountains, The Bulkley Ranges, the Coast Ranges.

Even the valleys and plateaus the pipeline must cross are considered geologically unstable.

The weather is often terrible. Rain. Snow. More rain. Wind storms. Lots and lots of rain. The pipeline will come to close to Lakelse Lake, just east of Kitimat, that has a Canadian record for a one day snowfall, 118 centimetres.

Just ask DriveBC how difficult it is to maintain the highways in this region, highways that have been around for at least 60 years and where the engineering has improved over those decades from the tracks my family drove when I was a kid. Washouts happen, even in “mild” years.

Then there’s the possibility of earthquakes. As Enbridge, correctly, points out, the tectonic plates where the major quakes can be triggered are far off shore and at least according to the maps, the pipeline is not in a quake zone. Yet Kitimat was badly shaken by the magnitude 9.2 1964 Good Friday earthquake in Anchorage, thousands of kilometres away.

So terrain, weather (summer or winter) and even earthquakes could hold up construction.

The building of the Canadian Pacific Railway was held up, not just by the challenging terrain but by the Northwest Rebellion, financial mismanagement by the CPR, (they ran out of money) and political scandal. That was in the nineteenth century when health and safety regulations were non existent and no environmental precautions were required.

Some of the first locomotives and rolling stock were not built for crossing some of the biggest mountain ranges on Earth.

Yes the CPR was built. It didn’t come in on time and on budget. The CPR certainly wasn’t “fast tracked.”

In the end one has to wonder if any of the politicians, pundits, columnists and analysts who are so certain they can fast track the Northern Gateway pipeline have attempted a home renovation. Perhaps they should try to finish their basements before pronouncing on building a pipeline fast tracked across the west.

“Front End Engineering” begins for BC LNG

Energy

The Hart Energy E&P (exploration and production) newsletter is reporting that an Overland, Kansas based company, Black & Veatch, a multi-billion dollar, employee-owned engineering firm founded in 1915, is beginning front end engineering (FEED) for the second proposed Kitimat liquified natural gas facility, BC LNG.

Although no information appears on the Black & Veatch website, the newsletter quotes Tom Tatham, the managing director of Douglas Channel Gas Services Ltd, the company which will contract with energy firms wanting to export through the BC LNG facility as saying: “We are looking to build the majority of the LNG export facility on a standard Panamax barge to minimize the physical and environmental impact in this scenic area.”

(The name Panamax derives from the maximum size that a barge or ship can be to pass through the Panama Canal, which means the LNG from the port of Kitimat could be shipped to anywhere in the world, not just to the projected Asian market)

Black & Veatch has developed a process called PRICO which Tatham says is ideal for this type of application because of its smaller footprint and flexible operations.

Black & Veatch’s engineering planning is scheduled to be complete by January 2012 and will provide a “definitive estimate” that will be used for costing engineering, procurement, construction, testing and commissioning of the facility.

The newsletter quotes says Dean Oskvig, president and CEO of Black & Veatch “The global LNG export market is extremely cost-competitive,” and Oskvig says the company`s process will be scalable and thus allow the partnership to bring liquified natural gas to market at a competitive price.

The Black & Veatch website briefly promotes the PRICO process as simple, flexible, reliable and economic but gives few details.

The company has an Edmonton based Canadian subsidiary.

Liquid natural gas exports will need infrastructure push: DCN

Daily Commercial News and Construction Record

Liquid natural gas exports will need infrastructure push

A growing number of energy industry players are looking to connect plentiful supplies of natural gas on this side of the Pacific with ravenous demand on the other.

It will be costly and complicated to link production from northeastern British Columbia’s vast shale natural gas fields to Asian consumers, but it’s an undertaking several observers say is worthwhile.

Ralph Glass, vice-president at AJM Petroleum Consultants in Calgary, likens the task to the construction of Canada’s major railways and seaways…..

It’s clear to energy consultant Glass that there’s enough Asian demand to soak up Canadian supply, but he’s less sure about the logistics of connecting the two.

He said there currently is not enough pipeline infrastructure between northeastern B.C. and the coast to accommodate the volumes necessary for each of the proposed projects. Getting new pipelines approved and built can be a slow process.