Oilsands Manufacturing Opportunities in Edmonton

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OilsandsManufacturing Opportunities in
Edmonton
May 9, 2007
Presented By Kent McMullin, Director, Business
Attraction Marketing Edmonton Economic
Development Corporation
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Edmonton by the Numbers 2006
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Solid Economic Fundamentals

• Edmonton is the service supply hub of Albertas
  oil gas industry including the Oilsands
• Strategically located between one of the world's
  most politically-stable oil supplies (the
  oilsands) the world's largest energy consumer,
  the USA.
• Size 58,000 square miles
• Reserves Comparison
• Oilsands 175 billion barrels (2)
• Saudi Arabia 262 billion barrels (1)
• Oilsands Production
• 1 million barrels/day
• Expected to reach 3 million barrels/day by 2020

Size 82 of Washinton
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Edmontons Opportunity Corridor

• Energy
• Coal Forestry
• Manufacturing
• Prince Rupert
• Port Development

Energy
Natural Resources
Grande Prairie
Transportation Corridor
Manufacturing
Convergence of Activity in Edmonton
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Major Projects in NorthernAlberta
82.8
17.1
Source Alberta Economic Development
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The Oilsands Opportunity forManufacturers

• Oilsands production to triple to more than 3
  million barrels per day by 2020
• 100 billion plus in investment
• Major capacity constraints labour, machinery,
  equipment and services
• Possibility for companies to tap into this
  unlimited opportunity
• Increase Albertas global supply chain
• Increase productivity/ technology adoption

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Announced Upgrading Projects

• Existing projects 4 Volume (bbl/day)
• Suncor 277,000
• Syncrude 301,000
• Husky-Llotdminster 77,000
• Albian-Scotford 155,000
• Project Expansions 4
• Suncor 235,000
• Syncrude 300,000
• Husky-Lloydminster 73,000
• Albian-Scotford 150,000
• New Projects 10
• Nexen/OPTI-Long Lake 70,000
• CNRL-Horizon 232,000
• Synenco- Northern Lights 100,000
• BA Energy- Heartland 250,000
• Petro-Canada/ UTS-Fort Hills 170,000

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Types of Units

• Process Unit
• Diluent Recovery
• Vacuum
• Deasphalt
• Coking
• Hydrocracking
• Hydrotreating
• Gas Recovery Unit
• Gas Sweetening Units
• Sulphur Recovery
• Hydrogen Production
• Sour Water Stripping
• Coke Gasification

• Offsites and Utilities
• Electrical Distribution
• Cooling water
• Flare System
• Fuel Gas
• Effluent Treating
• Boiler / Power
• Control Rooms (I/C)
• Buildings
• Interconnecting Pipes
• Tank Farm
• Blending/Loading Racks
• Plant Air

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Upgrader Equipment Requirements

• Assume cost for building a 100,000 bpd upgrader
  is
• 1 billion
• Equipment represents 70 of total cost 700
  million
• - Pressure vessels, industrial furnaces, cooling
  towers/ heat exchangers
• is 43 300 million CDN
• - Instrumentation control systems is 12 84
  million CDN
• - Pumps gas compressors is 6 42 million
• - Engines is 2 14 million CDN
• - Steel Pipe Tube is 1 7 million CDN
• - Valves is 1 7 million CDN
• - Other Equipment is 5 35 million CDN
  (includes construction cranes, construction site
  prefabricated camps, waste water treatment
  systems)

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Pressure Vessels Heat Exchangers

• Alberta market in 2005 for boilers, pressure
  vessels heat exchangers is estimated at 802
  million per annum
• Market growth of 17 per annum from 1994-2004,
  and 23 from 2004-2005
• Imports from U.S., Italy, Japan, Korea and India
• Alberta has limited capabilities to fabricate
  reactors
• Demand is very high for heat exchangers, with
  limited capacity to supply

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Instrumentation Control Systems

• Alberta market for instrumentation control
  systems is estimated at 600 million per annum
• Imports have been growing at 6 per year
• The U.S., U.K. and Germany account for the
  majority of measuring controlling devices
  imports
• Margins in Alberta have been healthy, but lag
  U.S. benchmarks
• Opportunities exist to enhance Albertas supply
  chain and lower costs by introducing new products

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Pumps Gas Compressors

• Alberta market for pumps and compressors is 1.2
  billion and has been growing at approximately 6
  per year
• The U.S. followed by Germany are the largest
  source of imports for pumps compressors
• Large pumps for pipeline stations and upgraders
  are imported
• Pumps utilized in Alberta
• - Progressive cavity pumps, centrifugal pumps,
  electric submersible pumps

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Steel Pipe Tube

• Alberta market for steel pipe tubulars is
  estimated at 1.1 billion per annum
• Market growth at 5 per year
• Imports account for 1/3 of the Alberta market
  with U.S. being the main source
• Venezuela and Argentina are a significant source
  of tubular products (seamless OCTG)
• Much of the high strength steel for large
  diameter pipe is sourced from Europe Japan
• Northern gas pipeline potential

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Valves

• Alberta market for valves is estimated at 400
  million per annum
• Growth has been slower than other segments of oil
  gas industry, due to downturn in pipeline
  construction
• Imports account for large share of the Alberta
  market
• The U.S. and Italy are the largest source for
  Alberta imports
• Emerging countries such as China, India and South
  Korea account for a significant share
• Majority of smaller valves are manufactured in
  Alberta

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Study Results

• Major Equipment Needs
• 50 of Contracts Have NOT Been Awarded
• Pipelines Not Included

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Heat Exchangers
Annual Expected Equipment Orders
Total 6,073
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Process Vessels and Towers
Annual Expected Equipment Orders
Total 3,251
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Pumps
Annual Expected Equipment Orders
Total 5,585
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Control Valves
Annual Expected Equipment Orders
Total 19,705
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Safety Relief Valves
Annual Expected Equipment Orders
Total 15,836
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Flow Instruments
Annual Expected Equipment Orders
Total 10,714
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Other Opportunities

• Housing
• Building Materials
• Infrastructure
• Labour

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Edmonton Powerhouse Redefined
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More Information
For More Information Contact Kent
McMullin Director, Business Attraction
Marketing kmcmullin_at_edmonton.com Visit
www.edmonton.com/statistics for all your
marketing and information needs.