BP Exits Canada's Bay du Nord Offshore Project

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

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Summary

BP has sold its stake in Canada's Bay du Nord offshore production project, leaving partner Equinor the sole owner.

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A Shift in Ownership

One of the most highly anticipated energy projects in Canada has experienced a change in ownership as BP sells its 37.2% stake in Canada's planned Bay du Nord offshore production project in the Atlantic Ocean, leaving Equinor the sole owner.

The site for the Bay du Nord project is around 300 miles from the coast of Newfoundland and Labrador. According to an Equinor executive, the basin holds at least 550 million barrels of reserves. Equinor has told investors that it expects to make a final investment decision (FID) on the project by early 2027.

The Bay du Nord development will be a floating production, storage and offloading platform. Industrial Info Resources data find that plans call for drilling around 40 development wells in five locations for the project to support 160,000 barrels per day (bpd) of oil production. First oil is expected in 2031. Industrial Info Resources estimates the project's total investment value at US$12 billion.

While BP said it is exiting the project in order to streamline its activities, the company will retain two ownership licenses for areas off the Newfoundland and Labrador coast, keeping a foot in Canada's offshore sector.

West Coast Pipeline

On the other side of Canada, Alberta's plans for an oil pipeline to the Pacific Coast in southwest British Columbia were given a boost late last week when Canada's Prime Minister Mark Carney along with Alberta Premier Danielle Smith announced plans for a 1 million bpd pipeline from Alberta to the Pacific Coast.

The project is still in its early days, but the leaders said construction could begin by September of next year. Funding details are still being sorted, and no price tag has been provided for the development. However, the companies behind the project have been revealed: federally owned Trans Mountain Corporation will take the lead on the project with input from Canada's homegrown Pembina Pipeline Corporation. The federal government and Alberta would have the majority ownership stake in the pipeline, with Pembina retaining a 10% share for its role in construction, with an opportunity to increase this after operations begin.

Pushback

One province that has not been entirely on board with a new West Coast pipeline in Canada is the pipeline's destination province: British Columbia. However, Reuters reports that British Columbia Premier David Eby appeared to have dropped his strongest objections to the pipeline, provided a ban on oil tankers along the northwest coast of the province remains enforced.

As part of the deal, Carney agreed to fund upgrades at the Roberts Bank Terminal at the Port of Vancouver. Industrial Info Resources data indicate one active project at the terminal to increase its container-handling capacity by more than 30% to 2.4 million twenty-foot equivalent units (TEUs) per year, although the project is expected to be years from starting.

While the pipeline project has been submitted to Canada's major projects office for fast-tracking, a number of details remain to be filled in, such as funding structure, input from indigenous communities and an accompanying carbon capture and storage (CCS) scheme.

Key Takeaways

• BP has sold its 37.2% in Canada's Bay du Nord offshore production project, leaving Equinor the sole owner.
• Equinor expects to make an FID on the project by early 2027.
• In Western Canada, rhetoric regarding a new crude oil pipeline to the southwestern coast of British Columbia is taking shape, with funding and ownership stakes the subject of recent agreements.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).