Flint wins $500M oilsands contract
Estimated contract
Ashok Dutta
Calgary Herald
Wednesday, April 18, 2007
Calgary-based Flint Energy Services has been awarded an estimated $500-million construction contract to fabricate and install a froth treatment unit to serve the phase 1 expansion of the Albian Sands project in Fort McMurray.
Albian Sands is part of the Athabasca Oil Sands Project (AOSP) expansion -- a 100,000-barrel-per-day increase in bitumen mining and upgrading facilities. AOSP is a joint venture between Shell Canada Inc. (60 per cent shareholder), Chevron Canada Ltd. (with 20 per cent stake) and Western Oil Sands Ltd. Partnership (the remaining 20 per cent interest).
The order was placed with Albian Sands Energy Inc., which operates the facility on behalf of AOSP.
"Scheduling work has been largely completed with the client and lead operator, Shell," Flint Energy's director of investor relations, Guy Cocquyt, said on Tuesday. "Onsite mobilization will start in June 1 and fabrication of the process equipment modules will commence on July 1."
The contract calls for the fabrication of 150 modules over a 10-month period. It also entails the manufacture of pipe racks and carrying out foundations, site preparations and electrical, mechanical and instrumentation works.
"We have a 70-acre facility at Sherwood Park, Edmonton and within that area there is a 150,000-square-feet under-roof module fabrication facility. The remaining area is available for onsite assembly and loading the process equipment for transportation to Fort McMurray," he said.
The facilities are due to be installed by early 2010.
Mark Friesen of Calgary-based FirstEnergy Capital said that the Albian Sands project is a significant project, with Shell Canada being fully committed to the expansion.
To keep pace with a growing order book, Flint Energy last year doubled the capacity of its fabrication yard at Sherwood Park. "Depending on contracts, we employ 300-to-500 people in our facility," Cocquyt said.
In late March, Flint Energy announced that its subsidiary - Flint Transfield Services Ltd. -- was awarded an estimated $1-billion asset management services contract by Suncor Energy for its oilsands projects in Alberta and the refinery in Sarnia.
The contract, which was awarded on a cost reimbursable basis with performance incentives, is the first of its kind to be awarded in the province's oilsands patch.
"The liability for Flint Transfield is marginal," commented Kevin Lo, energy services analyst with FirstEnergy. "They have the capability, but will need to hire more workers. That should not be a problem since the tightness (we saw earlier) in the availability of workers in Alberta has eased in the past few months."
Peter Bell, vice-president of strategy and development with Flint Transfield, said on Tuesday that by the end of 2008 his company will be looking at a work force of 1,500 through a a ramp-up from existing capacity.
"Typically, we take up orders worth $50 million-$100 million. The Suncor contract is our biggest in Canada and we will not be bidding for any more jobs until we deliver," Bell pointed out.
Flint Energy's shares were traded at $26.16 on Tuesday, 16 cents higher than the previous day.
adutta@theherald.canwest.com
© The Calgary Herald 2007
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