Husky Energy held an open house for its Saskatchewan Pipeline Gathering System Project at the Wild Rose Pavilion on Nov. 2. The $80 million project will generate jobs and transport heavy oil from new thermal projects in the region to the Lloydminster Husky Refinery and the Lloydminster Husky Upgrader. Construction is expected to start next summer following approval from Saskatchewan regulators. GEOFF LEE LLS PHOTO
Husky Energy’s plans to expand its Saskatchewan Pipeline Gathering System will generate 300 to 500 direct construction jobs next summer following project approval from provincial regulators.
The company held open houses in Maidstone and at the Wild Rose Pavilion in Lloydminster last week to explain the full scope of project, as part of the environmental approval process.
“We’re planning a project to build an expanded gathering system pipeline from our growing thermal operations north of the North Saskatchewan River, connecting to our upgrading and refining operations in Lloydminster,” said Husky spokesperson Mel Duvall.
The project involves the construction of a 52 kilometre 20-inch pipeline and a parallel 8-inch condensate line that will initially connect to the Spruce Lake North and Spruce Lake Central thermal facilities that will come on production in 2020.
“The 20-inch crude oil pipeline will bring the oil from the fields to our operations here in Lloydminster and then we need to send condensate back to those operations to blend with the crude, so that it can more easily flow through the line,” explained Duvall.
“The crude will go towards Lloyd and the condensate will go out toward our operations.”
The lines will predominantly follow existing right of ways.
“The only parcel not secured is a small piece of Crown land, and we can’t do that until we have our licence in place from the Ministry of Environment,” said Duvall.
The estimated $80 million cost of the project will be incurred by the Husky Midstream Limited Partnership, which owns about 1,900 kilometre of pipelines in the Lloydminster region with Husky as the operator with a 35 per cent interest in the partnership.
The project includes replacing about five kilometres of smaller pipelines in the system.
“We are also going to be putting in a new 20-inch raw water pipeline to existing and future thermals for steam production on the same right of way,” said Duvall.
The 9.5 kilometre water line will share the same right of way.
Construction of the full project is expected to start in the summer and take about six months to be complete by the first quarter of 2019.
A variety of construction contracts will be available to local companies to bid on.
“The bids will go out early next year and the successful bidders will be rewarded at that time,” said Duvall, who stressed no contracts have yet to be awarded.
“It will create a lot of work for local companies, not only for the construction of the pipeline, but this supports more thermal projects coming on the drawing board.”
Duvall said each new project that Husky builds has several hundred construction jobs associated with it, in addition to at least 30 direct full-time jobs and some indirect jobs associated with operating each project.
“We have four new thermal projects currently under construction including Rush Lake 2, which we are now expecting to come on line in 2019,” he said.
In addition, heavy oil from Dee Valley, Spruce Lake North and Spruce Lake Central thermals coming on line around 2020 will generate about 40,000 new barrels a day of production in the next three years.
“In addition to that, we’ve previously said we hope to sanction another two new thermal projects a year for the next three or four years, but we’re looking beyond that as well,” said Duvall.
He noted people who attended the open house in Maidstone were interested in the pipeline project and what this will do for future expansion plans, whereas in Lloyd there was a lot of interest in jobs.
“Most of the questions we get here (Lloyd) tend to be along the lines of what kind of jobs will this create; what kind of businesses will you be looking to supply parts to, supply construction crews to, and supply the various components of the project,” he said.
“It is a sizeable project and it has the potential to create a number of jobs, so it’s great that as many people that have come out.”