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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange) -- Ignore unavailable to you. Want to Upgrade?

To: R. M. Rosenthal who wrote (2426)	4/29/1998 8:55:00 AM
From: david james	Read Replies (1) \| Respond to of 2841

From the Sable page soep.com Check the part in bold. Still can't figure out why they call this site the MM Industra/Brown and Root yard. This is the MM Industra/American Eco yard - all the project is a joint project with Brown and Root. Apr 20/98 Speech--"We're Off and Running" ******************************************************************* The following remarks were made by Paul Bennett, Vice-President, Nova Scotia Exploration and Producing, Mobil Oil Canada, in a presentation to the Eastern Canada Natural Gas Conference of the Canadian Energy Research Institute in Halifax, April 20, 1998 ******************************************************************* "WE'RE OFF AND RUNNING" Mr Chairman, ladies and gentlemen. I'd like to pick up from the macro view of east cost oil and gas development offered by Jerry Anderson, a few moments ago to give you a micro view of the Sable Offshore Energy Project. Mr Chairman, much of what I have to say will not be new to you as it will reflect the regular updates we give you as head of the CNSOPB. But if you will bear with me I hope it will give others some idea of the scope of the project, where we are at the moment, as the real time pressures we are facing and what we might expect in the near future. A year ago we were only in week two of the public regulatory hearings and we all know how they stretched on till mid-July. The Joint Review Panel handed down its recommendations at the end of October and we received our final federal and provincial approval just after Christmas. The proponents gave their official sanction on February 11 when we also inked the Facilities Alliance Agreement. The regulatory process was prudent and thorough. Without prejudging the outcome of the hearings the proponents had the difficult task of making significant commitments before final approval if they were to keep to the deadline of having gas into the Maritimes and New England markets in late 1999. PROJECT SCHEDULE Our project schedule has changed very little from the day we first showed it back in 1995. We have made some minor revisions though to the construction schedule to ensure we could meet our targets within the ever-shrinking time available. We had to take risks involving millions of dollars as we brought together our Facilities Alliance group to work with the engineering and design teams to find new ways of integrating activities to provide the best solutions. Under ideal circumstances we would need around 27 months to bring a project of this nature together. We have just 19 months left. FACILITIES ALLIANCE With our seven alliance partners in place by last Fall, the proponents stood to lose millions of dollars if these pre-sanction contracts were not validated by December 31, 1997. You can imagine what was happening in the last week of December when serious decisions were being made to allow the global telephone calls to go out on the last day - even the last hour in one case - to say that the owners would standby the post sanction contracts even though the owners had not made their final decisions. But that is behind us now. Within the first hours and days of the 1998, full commitments were made to Nova Scotian, Canadian and international companies for construction contracts, services and supplies of materials and equipment worth around $1.5 billion. Many of you will remember that we announced project go ahead in the freezing rain at Goldboro on January 8 and that a month later on February 11 all the owners had made their project approval decisions and the Facilities Alliance Agreement was signed here in Halifax. That was just nine weeks ago. SAIPEM S7000 Jerry Anderson mentioned the Saipem S7000 in his talk a few moments ago. This giant heavy lift vessel was in this harbor just over a month ago to pick up the Venture and Thebaud drilling jackets which had been fabricated across the harbor from here in Dartmouth. THEBAUD JACKET I am very happy to say that these jackets are now in place on location near both the east and west ends of Sable Island and the vessel is now steaming back to the North Sea to meet other contractual commitments. It will be back in August for more installation work at the Thebaud central production platform location and the North Triumph drilling jacket. Saipem's excellent work in very difficult weather and sea conditions was the first major offshore assignment in the life of the development of this project, and it was completed successfully. At this stage of the journey we are close to 10 per cent along the progress chart for fabricating, constructing and installing the facilities. By Christmas we should be near the halfway mark. We remain on schedule and within our budget. All our alliance partners are fully mobilized and with many of the subcontractors are starting their activities as well. ROWAN GORILLA 2 As you have probably noticed, the Rowan Gorilla 2 jackup drilling rig is over at Dartmouth being outfitted for a tour of duty to drill five wells at the Venture field. This rig is being sublet to PanCanadian so they can economically drill a shallow well in the Cohasset-Panuke trend. The rig will be returned to SOEP in time to commence the scheduled drilling of the Venture field this summer. The Santa Fe Galaxy 2 jackup rig is due here in September/October to move onto the Thebaud drilling jacket to drill five development wells there before moving over to drill two development wells at North Triumph. This rig is in the final stages of construction in Singapore and is slightly ahead of schedule. Sable is a global project. Nova Scotia is gaining world attention and we have been fortunate in attracting the world's best to build a lasting infrastructure in this province. We have work underway in Dartmouth, Guysborough, Gulf of Mexico, United Kingdom, Texas, Japan, Mexico, Singapore and Argentina. Most of the materials and equipment we need will flow into the province this year. GOLDBORO SITE Onshore, our alliance partner subcontractors have completed site clearing and the earthwork contract needed to prepare the site is underway. The Goldboro wharf reconstruction contract has been awarded and the contractor is mobilizing to begin construction. This wharf required rebuilding so that it can handle some of the large pressure vessels needed at the gas plant which is only about two kilometers away. The new wharf will remain in place for the community's future needs when SOEP's initial work is finished. A concrete batch plant contract has been awarded to a Cape Breton firm and within the next couple of weeks we expect to award contracts at Goldboro for structural steel prefabrication, carbon and stainless steel pipe fabrication, piling and foundation work. We're in the process of finalizing land acquisition at Point Tupper and expect to call tenders shortly for the preparatory work on the site of the liquids processing (fractionation) plant. In October we should see the liquids pipeline being laid across the Strait of Canso from near Mulgrave to the Point Tupper area. FABRICATION FACILITY At Dartmouth, Mobil Oil Canada is completing a $2 million upgrading of its dock for sublease to the project as a shorebase for the drilling operations. Fabrication of the North Triumph deck will begin this month at the MM Industra/Brown & Root yard in Dartmouth, and the fabrication facility is currently being set up at Fabco for the Thebaud living quarters module. At Sheet Harbor, east of Halifax, site preparation activity has begun for the offshore pipe coating facility. Pipe has already started to arrive at the site and the concrete weighting and anti-corrosion work will probably begin in the next four to eight weeks. The work will continue through to early in the new year. The final year of the century will see 11 months of intense activity encompassing the drilling of the development wells and the installing, tieing-in and commissioning of all facilities. The key point of the year will be in July/August time frame when we install the decks at Thebaud, Venture and North Triumph. We will begin gas commissioning by October and have the first gas flowing on schedule in November. Our Facilities Alliance team is now formally off and running. Most of you have probably heard our expression of taking a step-by-step approach through the pre-development process. This enabled early engineering to grow in parallel with the pace of the regulatory process. It helped us to keep costs to a minimum and mitigate our financial risks. We brought in our Facilities Alliance team early on with the promise of bigger things to come. They took part in the risk and were able to add their very practical experience to the engineering and design and to develop their organizations so no time would be lost in mobilization once we, as owners, received all the approvals we needed to say "yes, let's do it!" That's why, we have been able to ramp up construction so rapidly once we gave the go ahead on the key contracts. It was literally only a few hours after that decision came that steel was being cut and formed in a variety of yards worldwide. MAXIMUM VALUE Sable is a seed project and our contracting strategy is designed to gain the maximum value through this first phase for Nova Scotia. It is in our interests to continue the development of an infrastructure which will enable a higher Nova Scotia content during the second phase and for future development of the industry as a whole. The Nova Scotia content is on target with our forecast to ultimately reach 43 per cent by the end of the second development phase and 55 per cent for the project life overall. In spite of all the extra challenges we have faced, we have stayed the course, Mr Chairman, and our Alliance Partnership has shown its great flexibility and its ability to deal with the unexpected. The eyes of the oil and gas world are on this small piece of the Atlantic. We will meet our deadline for first gas because of the talent and commitment we have in our people both within the project and alliance teams, within our owner companies, within government at all levels and within the communities in which we work. Mr Chairman, Sable is moving ahead at a very fast pace. I hope my comments have been helpful in providing a status report and indicating where SOEP is going in the future. I welcome any comments the audience or you yourself might have. Thank you very much.