Weyburn– To say there was strong contractor interest in the proposed Dominion Energy Processing Group Inc. Stoughton refinery would be an understatement.
The contractor meeting, held in Weyburn’s McKenna Hall on Feb. 15, was nearly full save the first couple rows of seats. Executive director of Weyburn Regional Economic Development Twila Walkeden pegged attendance at around 300.
Keith Stemler, CEO of Dominion, spent nearly an hour describing the $600 million proposal, and took another hour answering numerous questions from the contractors present, a who’s-who of Saskatchewan oilfield construction firms. He was accompanied by Adil Kaderi, who is looking after engineering.
After a brief discussion on the emphasis on safety, and specifically, not using cellphones while driving, Stemler launched into his presentation. He emphasised, “This project is in proposal stage,” and there was a lot that had to be done to get to project status.
Stemler talked about policies on spills and drips, and other environmental procedures. He said the design will reduce emissions and will be well-maintained.
“We will own and operate this facility,” he said, adding they will have contracts for things like vac trucks and snow clearing.
Stemler spoke about a triple bottom of social, economic and environmental benefits. On the environmental side, the site will have an emergency dump pond or tanks, and will not use a disposal well. “Everything will be contained above ground,” he said.
The site will have segregated internal and external drainage systems.
For the social aspect, he spoke of developing and supporting the local community. Roads into the site will need to be looked at, with huge modules expected to be brought in. There will be one or two more town hall project updates in Stoughton, as well as meetings with neighbouring First Nations.
Economic benefits include things like usage of local hotels for paid accommodations. Education for plant operators has been broached with Southeast College.
“We want to look at local hire first before we bring in external help.”
“We’re looking at long term. The plant is scheduled for 90 years of operation, that’s the feedstock supply we’re working with currently. This isn’t a one- or two-year project, this is 90 years of development,” he said.
Turnarounds would happen every few years for 21 to 28 days.
Stemler also spoke of expansion in 2021 which would run until 2025, adding a second train. “I can’t disclose what that is at this time, but this is a large development that would be progressing to 2025.”
Meat and potatoes
Getting into the “meat and potatoes” for the contractors, Stemler said, “Based on schedule, we have 29 months from the time we receive the permit to the time of first oil. I feel we can do this – put the kit together, complete civil, all the underground and above ground structure, and achieve first oil in 29 months. To do that, we’re looking at a craft staff of basically 24 hours a day 180 guys for 24 months to get it done.”
That roughly 180 workers will change in makeup as the project progresses through its various stages.
“The schedule seems pretty tight, I don’t disagree. But we have commitments for first oil for 2019. The longer we drag this out, the more pressure there is on operations to get this done.”
There would be six management staff on site plus the engineer of record. In plant operations, there would be three 20-person shifts, with management.
Civil contractors would be looked at initially for road work, laydown yard prep and the like. He would like to start moving dirt in late 2017.
“Everybody’s probably wondering, ‘Why Stoughton?’ We looked at it to do our land evaluation. It’s a very critical thing for long-term investors to make sure that we’re doing the right thing, we’re making the right decisions.
“One of the land evaluations was, first of all, transportation in and out, regional support, water and product. That’s why we chose Stoughton. All the identified risks in the risk assessment came back that Stoughton would be the prime location because it has the four main ingredients – water, power, land and supply.”
The clay is good, but they haven’t done hydrology or CPT testing yet.
He specifically referred to processing Bakken sweet crude, which means it requires a less robust kit to process. It would be a 42,100 bpd facility at 95 per cent efficiency, producing unleaded gasoline, diesel, jet fuel and other products.
There would be a minimum of 200,000 bbl. of storage tanks for the upstream portion of the facility and four downstream tanks of about 100,000 bbl. each. The site would include ice-free ponds for process water and firefighting water storage. There would be 450,000 cubic metres of water storage on site. Dirt from the pond construction would be used for other parts of the facility.
He also mentioned rail car facilities, but did not say whether that meant building a spur line from Stewart Southern Rail’s shortline which terminates at Stoughton, or if pipelines would be built to the rail line and if a loading facility would be established there.
For the off-take, he said, “We prefer the rail method.”
Stemler noted they might end up building a pipeline south to the Canadian Pacific mainline which runs through Weyburn and Estevan.
He asked that people not go on the property as “I do not own it at this time 100 per cent.”
Stemler spoke of a one-team approach, right from the minister’s office to the local mayor.
“Have we hit any walls that are going to stop the project? Not yet. We’re very comfortable, as owners and developers of this project, that we are going to continue on this path of success. But, as you know, with any proposed project, we’re going to have those walls we hit. We’re going to find the doors that are closing. Now, we’re at those tipping points of discussion, we’re starting, not to see resistance about the development, but we’re seeing more questions to development,” he said.
In one email, he was presented with 117 questions.
On the job, he wants no barriers between craft and management.
This was a key point in several of the questions from the contractors, several of whom expressed concerns that large, unionized general contractors would get the bulk of the work and that local, non-union contractors would be left out. Indeed, Stemler referenced the fact PCL had representation in the room, and Pipeline News noted a Graham Construction truck in the parking lot.
To that he replied that the project will involve handling 460,000 tonnes of steel, and the contractors have to be capable of doing that sort of work.
Dominion has not yet announced who its engineer of record would be, but that engineering firm would be doing the vetting and contracting out of the work as the engineering, procurement and construction management firm. As a result, Stemler asked that those present leave business cards to they can be contacted, their disciplines identified and put on vendors lists. He noted he didn’t want to take home 350 pounds of binders at this time.
The engineer or record would have online bidding and drawing systems for contractors.
Stemler noted the importance of a clean safety record and being current with OH&S. A quality management system is also essential.
“Our goals are to design this plant. Our goals are to complete this plant. Our goals are to operate the plant. There’s some speculation this is way out there. I don’t feel that it is,” Stemler said. “From my perspective, as a director, I know what’s happening in the background, and I’m starting to get more and more comfortable all the time moving forward. Take that as it may, that’s my personal thoughts. All of this work over two-and-a-half years is not just smoke and dreams. We want to get this to the finish line.”
Asked by one contractor if they had built a plant like this before, Stemler responded he had worked on projects from $2 to $6 billion in scope.
Another question about cogeneration resulted in Stemler describing an 85-megawatt steam driven co-gen system using waste gas.
One person asked if Crescent Point is going to be their main supplier or if sales lines would come in from midstream companies.
“Currently we’re in negotiations with several different feedstock suppliers. We’re not in any agreement stage at this point,” Stemler replied.
Asked about structural steel, he noted a preference for Saskatchewan firms. Beyond that, he said, “On a local level, one of the things the plant needs is welders and machinists, all the time, 24/7. Is that a local opportunity? Absolutely.”
Stainless steel welders and those with certification for double-jacketed steam pipe would also be in demand.
“There will be an enormous amount of welding. An enormous amount of concrete, foundation work, piling work, civil work. We’ve probably 600,000 cubes of dirt to move. Those little pieces will probably be split up, outside the kit. And then once we buy the kit, basically that will be a fabrication outside of this area because we don’t have a fabrication shop in this area large enough to build a 200-foot tower. The reactors will probably come out of the States or overseas. The small pipe rack – there’s a lot of local kit that can be done,” he said.
That said, the boiler would probably come from Mexico, the only one they could find large enough.
They’ve had some suggestions for water supply, and are looking at a source north of Stoughton. The storage facility on site will be 450,000 cubic metres in size.
With regards to any pushback, he noted the recent pipeline spill near Stoughton did not help. “To this point, no, we haven’t seen any resistance,” but the questions they are getting more specific.
“Currently we’re in discussions with several groups in the province,” Stemler said when asked about where the refined product would go. Their market analysis says there is a market here.
