Willbros Group to Construct Williams Energy Canada Boreal Pipeline in Alberta

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Researched by Industrial Info Resources (Sugar Land, Texas)--Global energy-services provider Willbros Group Incorporated (NYSE:WG) (Houston, Texas) has announced that the company's Canadian business unit, Willbros Canada (Fort McMurray, Alberta), has been awarded the contract to construct the Williams Energy Canada Boreal pipeline for Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma).

The 420-kilometer pipeline will carry high-vapor-pressure liquids from Williams' liquid extraction plant north of Fort McMurray to the company's olefins fractionation plant in Redwater, north of Edmonton. Because of the climatic conditions in the area, the pipeline will be constructed over three seasons, beginning in autumn this year, with final completion scheduled for spring in 2012.

The feasibility study for the pipeline project was undertaken in early 2008, and the official application was submitted to the Alberta Energy Resources Conservation Board (Calgary, Alberta) in June last year. In the application, Williams requested approval to construct the 12-inch-diameter steel pipeline to transport the high-vapor liquids extracted from the thermal cracking/coking facilities operated by Suncor Energy Incorporated (NYSE:SU) (Calgary).

The oil sands deposits in Alberta contain an estimated 1.6 trillion barrels of bitumen, a tar-like substance that is too viscous to flow through pipelines. The Suncor thermal cracking facilities in Fort McMurray processes the extracted bitumen to produce usable oil, with a byproduct consisting of a sour gas, which is rich in natural gas and olefins.

Williams constructed a liquid-extraction plant adjacent to the Suncor facilities to process the sour gas. Currently the natural gas liquids such as ethane, ethylene, propane and butane, and olefins, such as propylene and butylene, are batch-shipped to the Redwater facilities via the Suncor Oil Sands Pipeline. Williams intends to replace this batch-shipping process with the new pipeline.

With no guaranteed access to transportation facilities for the production output at the liquid-extraction plant and no transportation facilities for liquids produced from alternative sources, Williams is keen to construct its own pipeline to allow the liquid-extraction plant to reach full operating capacity. The new pipeline will add a further 12 million cubic feet per day to the liquid-extraction plant's production capacity.

Willbros was formed from the original Williams Brothers Company, which dates back to 1908. The company provides engineering, construction and procurement services to more than 400 global clients in more than 55 countries. The company operates in two distinct business divisions: Upstream Oil & Gas and Downstream Oil & Gas.

Willbros Canada has a more recent history. The original company was established in Alberta in 1988 and was known as MSI Energy Services. It was acquired by Willbros in 2001. Willbros Canada works closely with major oil sands companies, including Suncor and the world's largest producer of light, sweet crude from oilsands, Syncrude Canada Limited (Fort McMurray). The company provides pipeline construction and maintenance services, including welding and fabrication, through locations in Fort McMurray and Edmonton.

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