No thorns on this rose A multi-million-dollar mega-project is revitalizing one of Newfoundland and Labrador s coastal treasures, and giving the entire province an influx of jobs and opportunities BY DANIEL HISCOCK Image courtesy of town of Placentia NR22 Natural Resources Magazine / Vol. 20 No. 2 2018
Just a few hours drive from St. John s, and a short ferry ride from the Maritimes, sits the scenic and historic town of Placentia, Newfoundland and Labrador. Known as Plaisance to early French settlers (which roughly translates to pleasant place ), this charming oceanside landmark consisting of nearly 3,500 souls has seen several booms over the centuries from dramatic influxes of rough-and-ready Basque and Portuguese whaling fleets as far back as the 1500s, to French and English cannon fire in battles over the strategic naval location in the 17th and 18th centuries, waves of Irish immigrants in the 1800s and U.S. battleships and fighter planes during the Second World War. However, it is another kind of boom that is currently taking place in Placentia, one that stems from offshore oil exploration and production. Online extras: naturalresourcesmagazine.com NR23
Image courtesy of town of Placentia The West White Rose project is an extension of White Rose, an oil field that s located 350 kilometres east of St. John s, Newfoundland in the Jeanne d Arc Basin. White Rose has been producing since November 2005. West White Rose had been put on hold in 2014, but in May 2017 operator Calgary-based Husky Energy Inc., together with project partners Suncor Energy and Nalcor Energy, greenlighted the investment: at a cost of $3.2 billion The capital cost of the West White Rose project $3.2 billion to reach first oil date of 2022, West White Rose is a go. Following that announcement, contracts were awarded on behalf of Husky Energy, the project s primary owner (it has a 70 per cent working interest in the field), to companies throughout Newfoundland and Labrador. This was extremely good news for Placentia and its surrounding area, especially when it Photo courtesy Anaconda Mining was decided that the Port of Argentia s Your training partner for skills development in the mining industry Safety courses Custom training Short programs Heavy Equipment Operator with simulators Surface Diamond Driller s Helper Mill Operator continuum.ccnb.ca 506-547-7401 NR24 Natural Resources Magazine / Vol. 20 No. 2 2018
West White Rose development Image courtesy of Husky Energy industrial parks and seaport (the site of a former American naval base located within the Town of Placentia), would facilitate much of the project s fabrication. Husky Energy is developing a concrete gravity (CGS) supported wellhead platform to drill at the West White Rose field, the first of its kind to be used in the province. It will host drilling facilities, utilities, support services and accommodations for the 250 It will breathe new life into the economy of Newfoundland and Labrador. Trevor Melendy, president, Harold Snow Service Group and Atlantic Laundry Equipment people who will work on it. The platform will transport the oil back to the SeaRose Floating, Production, Storage and Offloading (FPSO) vessel via subsea tiebacks. A dry graving dock essentially a large ditch built into the ground for assembling this revolutionary platform was completed at Argentia in 2015 and allows for the CGS to be assembled entirely at the site and outside of ocean waters. Online extras: naturalresourcesmagazine.com NR25
73,000 cubic metres The amount of concrete that will be needed to build the West White Rose project s Concrete gravity structure platform According to Husky Energy, construction of the CGS requires more than 7.5 million person hours for engineering and construction, requiring between 700 and 800 workers at the Argentia site during peak construction. This influx of contracts, jobs and workers is great news for Placentia, a town that has seen its economy go through various changes over recent decades. The town saw a reduction in its primary sources of income and the elimination of many jobs in the area with the cod moratorium in the early 1990s and the official closing of the U.S. naval station in Argentia in 1994. Last summer, Chris Newhook, CEO for the Port of Argentia, told local community newspaper The Compass, we don t get too many mega-projects knocking at the door. We see so many benefits for our community in terms of employment and business opportunities, and second-of-all as the port authority and the property authority, the ability to showcase this tremendous asset that we have here in Argentia for these types of things. But the prosperity brought to Placentia from the West White Rose extension project spans beyond the industrial world. On an ideal perch overlooking the tranquil bay sits The Three Sisters Pub in Placentia. The pub s co-manager, Anne-Marie Martin, is excited for the project and what it will bring to her community. Martin says the work taking place at Argentia is a great way to boost revenue for her business, as the eatery will provide catering for onsite executive meetings and brownbag lunches for site workers. Restoring more than property BELFOR is the largest Canadian disaster recovery and property r estoration company for residential and commercial properties. BELFOR is a long established company that accepts its leadership role in terms of doing the right things the right way and for the right reasons. Our commitment to ethical standards and environmental responsibility combined with our support of our staff and concern for the public interest has allowed us to build a sustainable business. BELFOR continually takes steps to make our business more environmentally friendly. Our promise to our partners is simple to do our very best, each and every time; to ensure your best interest is always at the forefront; to stand behind our word and give you our all 24/7/365. RESTORATION ENVIRONMENTAL HVAC CLEANING CONSTRUCTION FIRESTOPPING CABINET & MILLWORKS Saint John 506-847-4169 Moncton 506-853-0006 Dartmouth 902-860-2425 Corner Brook 709-785-5505 Labrador City 709-280-5453 St. John s 709-781-3264 Gander 709-651-4909 Marystown 709-279-3012 www.belfor.com Anne Marie Martin Three Sisters Pub, Placentia *** In fact, West White Rose will benefit not only Placentia, but contractors, companies and workers throughout the province as well. Once the drilling rig is operational, there will be more than 18 million person hours for wellhead platform operations, creating approximately 250 new platform jobs (with) indirect employment for another approximately 1,500 people, Husky says. Marystown is another Newfoundland and Labrador community NR26 Natural Resources Magazine / Vol. 20 No. 2 2018
seeing work opportunities as a result of West White Rose. The community is where the wellhead platform s living quarters are being built by Kiewit Offshore Services. Marystown mayor Sam Synard says the contract will employ a few hundred people in the area. [The contract] keeps Marystown in the game, allowing the town to continue playing a role in offshore oil exploration in Newfoundland and Labrador, Synard says. St. John s-based companies Harold Snow Service Group and Atlantic Laundry Equipment are two examples of how an offshore oil and gas project has an employment impact beyond the men and women who will work on the platform. The two firms have been awarded contracts from Husky Energy to supply equipment for the wellhead platform s galley the area where food will be prepared and served to the offshore workers. Trevor Melendy, president of each company, told Natural Resources Magazine that this is a significant contract for both of his organizations. Melendy also discussed the significance of the project for all other contractors involved and that the West White Rose extension is a big economic boost for the province. It will breathe new life into the economy of Newfoundland and Labrador, Melendy says. While construction of the CGS is occurring at Argentia, Newfoundland and Labrador-based contractor Pennecon Limited, in partnership with SNC Lavalin and Dragados Canada, will be carrying out the building phase on behalf of Husky Energy. The contract is the kind of work that provincial firms like Pennecon dream about. And Pennecon has plenty of experience completing heavy industrial projects having worked on the Voisey s Bay project for Vale and the Henry Goodrich offshore drilling rig refit at Bull Arm. Building the platform for West White Rose will be a huge undertaking. The CGS will be 145 metres in height and have a base diameter of 122 metres. It s estimated that 73,000 cubic metres of concrete will be required during its construction. Pennecon says the CGS will be completed by 2021 and then be installed [The contract] keeps Marystown in the game, allowing the town to continue playing a role in offshore oil exploration in Newfoundland and Labrador. Sam Synard, Marystown mayor Online extras: naturalresourcesmagazine.com NR27
Cumulative effects SINCE HIBERNIA ushered in the offshore oil era in Newfoundland and Labrador, a lot of oil has been produced. As Husky Energy develops the West White Rose project, a look back at the province s other producing oilfields illustrates just how many billions of dollars and thousands of jobs the offshore oil sector is responsible for. Major oil exploration off the coast of Newfoundland and Labrador began in the Jeanne d Arc Basin of the Grand Banks, approximately 315 kilometres from St. John s. The initial spot of exploration became what is now known as the Hibernia field, with a gravity based structure (GBS) towed to the site in 1997 and first oil produced in November of the same year. This began a new chapter of natural resource development in the province, one that moved away from the fishing that had sustained the island for centuries. With the development of this valuable resource came a new prosperity, and offshore oil revenue became the primary contributor to Newfoundland and Labrador s economy. In 2015 it was estimated that this valuable resource represented 16.7 per cent of the province s GDP. The Hibernia project pumped its billionth barrel of crude oil on December 21, 2016 and, of the 1,939 people working on the project that year, 85.4 per cent of them were residents of Newfoundland and Labrador. Located to the southeast of Hibernia is the Terra Nova field, the second offshore oil discovery in Newfoundland and Labrador s waters to reach production. It achieved first oil in 2002. Terra Nova uses a floating production, storage and offloading vessel (FPSO) to extract oil from the ocean s floor. Recent estimates of the field s reserves were over half a billion barrels of crude oil, as opposed to the estimated 400 million in the early stages of the project. Since first production to December 31, 2016, the Terra Nova field produced approximately $27.4 billion worth of oil. In addition, as of December 31, 2016, the Terra Nova project saw 749 workers in Newfoundland and Labrador, of whom 695 were residents of the province. The White Rose field was Newfoundland and Labrador s third offshore oil and gas project. Like the Terra Nova field, White Rose uses a FPSO, the Sea Rose, to produce oil. First oil was achieved at the field in November 2005 and, in addition to the West White Rose extension, includes two other satellite areas, North Amethyst and the South White Rose extension. As of 2017, the total estimated reserves for the White Rose satellite areas were 479 million barrels of crude oil. From 2002 to the end of 2016, the estimated value of the oil produced from the White Rose field was $23.7 billion. Also located in the Grand Bank s Jeanne d Arc Basin is the Hebron oil field. It s estimated to contain over 700 million barrels of crude oil for production. The Hebron project was officially sanctioned on December 31, 2012, with construction of a gravity-based structure beginning at a dry dock site in Bull Arm that same year. Jobs at the Bull Arm site also became a significant employer within the province. Other components of the project were fabricated at sites in Newfoundland and Labrador, including Port aux Basques, Marystown and Mount Pearl. In July of 2014, the GBS was placed in the ocean for continued assembly. It was towed to the Hebron field in June of 2017, with first oil produced in November. By the end of 2016, the project had employed 3,419 Newfoundland and Labradorians 91 per cent of the project s workforce in the province. Image courtesy of town of Placentia at the West White Rose site so it s ready to pump oil by 2022. Peak production at the field will be approximately 75,000 barrels per day. Although the financial terms of these contracts are rarely made public, it s safe to say it will be a lucrative one for Pennecon. So it s no surprise Pennecon Limited executive chairman Larry Puddister expressed enthusiasm for the project. We look forward to being a part of such an important venture that reinforces the value of our offshore industry and will significantly contribute to our provincial economy, Puddister said in a press release announcing the awarding of the contract late in 2017. It s even possible the added momentum from the West White Rose project could position Placentia to be the next major visitor s hub for NR28 Natural Resources Magazine / Vol. 20 No. 2 2018
Newfoundland and Labrador. That an offshore oil mega-project could make a community like Placentia a tourism mecca seems like a stretch. But with close proximity to the capital of St. John s, easy access from the mainland via ferry, rich history and stunning ocean scenery, the essential ingredients are already in place. An increase in business and people in the area could then see a host of other attractions spring to life, such as art spaces and independently-owned boutique franchises. Anything is possible when projects like West White Rose come to town. nrm FEEDBACK * dcampbell@naturalresourcesmagazine.com a @NRM_Editor; #WestWhiteRose Image courtesy of town of Placentia School of MatheMatical and computational ScienceS We re unique in Atlantic Canada for offering a comprehensive suite of traditional and emerging programs, including the only complete actuarial degree. Our graduates have the problem-solving skills to manage, analyze, and extract useful information from data the key to progress in almost every organization! School of SuStainable DeSign engineering Our connection to industry is what separates us from most other universities as our program is organized as an innovation-focused engineering consulting firm. Our graduates are ready to provide sustainable solutions to meet the challenges of today and tomorrow, at home and around the world. Check out program details and partnership opportunities upei.ca/engineering upei.ca/smcs upei.ca/apply UniversityofPEI @UPEI upei One place. Every opportunity. Online extras: naturalresourcesmagazine.com NR29