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Released September 25, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Canada is known for its vast wealth of oil and gas reserves. For crude oil alone, it ranks among the top nations, with an estimated 171 billion barrels of reserves, according to Canada's government.
Yet Canada falls behind several other producing countries in the development of its reserves, with capital investments dropping during the past few years, according to reports. The COVID-19 pandemic has caused those investments to drop even more.
The Canadian Association of Petroleum Producers (CAPP), which describes itself as the voice of Canada's upstream oil and natural gas industry, said this month it expects exploration and production capital expenditures to be C$23 billion (US$17 billion) for 2020, a 33% downward revision from its January forecast of C$37 billion (US$27 billion), as a result of the "COVID-19 effect." Capital expenditures were estimated at C$34 billion (US$25 billion) for 2019, and C$29 billion (US$22 billion) for 2018.
Industrial Info is tracking US$33.4 billion worth of Oil & Gas Production, Pipelines and Terminals project activity in Canada that has been affected by COVID-19. The effects can range from temporary labor force reductions to delays, to projects being put on hold to cancellations.
Click on the image at right for a graph showing the COVID-19 project activity by industry sector.
By value, liquefied natural gas (LNG) production makes up the bulk of the project activity impacted by the pandemic. In March, LNG Canada temporarily reduced by half the size of the workforce on its Kitimat, British Columbia, megaproject due to COVID-19 concerns. LNG Canada still plans to complete the project in 2024. The facility will have two LNG trains, each capable of producing 7 million tons per year, destined for export to Asian markets.
LNG Canada is a joint venture by Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, The Netherlands), Petroliam Nasional Berhad (National Petroleum Limited (Petronas) (Kuala Lumpur, Malaysia), PetroChina Company Limited (Beijing, China) and Mitsubishi Corporation (Tokyo, Japan). For more information see Industrial Info's project report.
The Kitimat facility is to be fed natural gas via TC Energy Corporation's (NYSE:TRP) (Calgary, Alberta) 416-mile Coastal GasLink pipeline. For more information, see Industrial Info's project reports.
A number of pipeline projects have seen delays as a result of the pandemic. Among them is TC Energy's planned NOVA Gas Transmission Limited (NGTL) pipeline expansion, which would help natural gas producers in the Western Canadian Sedimentary Basin (WCSB) get their product to other markets. The 214-mile expansion was approved by the Canada Energy Regulator, but Canada Natural Resources Minister Seamus O'Regan said in May that a final regulatory decision on the project would be delayed until no later than October 19, due to health and safety concerns caused by the pandemic. Some indigenous groups had sought additional time to take part in consultations on the project, O'Regan said.
As a result of the delay, TC Energy said on September 8 that "construction did not begin in summer 2020 as originally planned and the critical winter construction season has been substantially reduced. In anticipation of GIC approval, we continue to refine the project's construction schedule and advance construction planning."
Construction of the expansion is planned to kick off in first-quarter 2021, with completion in first-quarter 2022. For more information, see Industrial Info's project reports.
Oil production projects also have felt the impact of the pandemic.
Husky Energy Incorporated (TSX:HSE) (Calgary) recently placed its West White Rose offshore crude oil platform project under review following the suspension of major construction activities in March due to the pandemic, and the company's capital re-prioritization following the global economic downturn.
"A full review of scope, schedule and cost of this project is critical, given the minimum one-year delay to first oil caused by COVID-19, and our priority of maintaining the strength of our balance sheet with ample liquidity," said Husky Energy Chief Executive Officer Rob Peabody in a September 9 press release. "Unfortunately, the delay caused by COVID-19 and continued market uncertainty leaves us no choice but to undertake a full review of the project and, by extension, our future operations in Atlantic Canada."
Located in the Atlantic, more than 200 miles east of Newfoundland and Labrador, West White Rose would produce 52,000 barrels per day (BBL/d) of light crude and would have a peak capacity of 75,000 BBL/d.
The project's longer-term fundamentals remain attractive, Peabody said: "However, sustaining project costs through a long delay in a negative economic environment is not an option," Peabody added. The project has had a planned completion in third-quarter 2022. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Yet Canada falls behind several other producing countries in the development of its reserves, with capital investments dropping during the past few years, according to reports. The COVID-19 pandemic has caused those investments to drop even more.
The Canadian Association of Petroleum Producers (CAPP), which describes itself as the voice of Canada's upstream oil and natural gas industry, said this month it expects exploration and production capital expenditures to be C$23 billion (US$17 billion) for 2020, a 33% downward revision from its January forecast of C$37 billion (US$27 billion), as a result of the "COVID-19 effect." Capital expenditures were estimated at C$34 billion (US$25 billion) for 2019, and C$29 billion (US$22 billion) for 2018.
Industrial Info is tracking US$33.4 billion worth of Oil & Gas Production, Pipelines and Terminals project activity in Canada that has been affected by COVID-19. The effects can range from temporary labor force reductions to delays, to projects being put on hold to cancellations.
By value, liquefied natural gas (LNG) production makes up the bulk of the project activity impacted by the pandemic. In March, LNG Canada temporarily reduced by half the size of the workforce on its Kitimat, British Columbia, megaproject due to COVID-19 concerns. LNG Canada still plans to complete the project in 2024. The facility will have two LNG trains, each capable of producing 7 million tons per year, destined for export to Asian markets.
LNG Canada is a joint venture by Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, The Netherlands), Petroliam Nasional Berhad (National Petroleum Limited (Petronas) (Kuala Lumpur, Malaysia), PetroChina Company Limited (Beijing, China) and Mitsubishi Corporation (Tokyo, Japan). For more information see Industrial Info's project report.
The Kitimat facility is to be fed natural gas via TC Energy Corporation's (NYSE:TRP) (Calgary, Alberta) 416-mile Coastal GasLink pipeline. For more information, see Industrial Info's project reports.
A number of pipeline projects have seen delays as a result of the pandemic. Among them is TC Energy's planned NOVA Gas Transmission Limited (NGTL) pipeline expansion, which would help natural gas producers in the Western Canadian Sedimentary Basin (WCSB) get their product to other markets. The 214-mile expansion was approved by the Canada Energy Regulator, but Canada Natural Resources Minister Seamus O'Regan said in May that a final regulatory decision on the project would be delayed until no later than October 19, due to health and safety concerns caused by the pandemic. Some indigenous groups had sought additional time to take part in consultations on the project, O'Regan said.
As a result of the delay, TC Energy said on September 8 that "construction did not begin in summer 2020 as originally planned and the critical winter construction season has been substantially reduced. In anticipation of GIC approval, we continue to refine the project's construction schedule and advance construction planning."
Construction of the expansion is planned to kick off in first-quarter 2021, with completion in first-quarter 2022. For more information, see Industrial Info's project reports.
Oil production projects also have felt the impact of the pandemic.
Husky Energy Incorporated (TSX:HSE) (Calgary) recently placed its West White Rose offshore crude oil platform project under review following the suspension of major construction activities in March due to the pandemic, and the company's capital re-prioritization following the global economic downturn.
"A full review of scope, schedule and cost of this project is critical, given the minimum one-year delay to first oil caused by COVID-19, and our priority of maintaining the strength of our balance sheet with ample liquidity," said Husky Energy Chief Executive Officer Rob Peabody in a September 9 press release. "Unfortunately, the delay caused by COVID-19 and continued market uncertainty leaves us no choice but to undertake a full review of the project and, by extension, our future operations in Atlantic Canada."
Located in the Atlantic, more than 200 miles east of Newfoundland and Labrador, West White Rose would produce 52,000 barrels per day (BBL/d) of light crude and would have a peak capacity of 75,000 BBL/d.
The project's longer-term fundamentals remain attractive, Peabody said: "However, sustaining project costs through a long delay in a negative economic environment is not an option," Peabody added. The project has had a planned completion in third-quarter 2022. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
