Released on September 3, 1998
Natural Resources Canada Minister Ralph Goodale, Saskatchewan Economic
and Co-operative Development Minister Janice MacKinnon, Saskatchewan
Energy and Mines Minister Eldon Lautermilch and University of Regina
President David Barnard today announced the establishment of the
Petroleum Technology Research Centre (PTRC) in Regina.
The $11 million centre, to be located in the new Regina Research Park
adjacent to the University of Regina, will undertake research to
enhance the production and value of Saskatchewan's oil resources, with
a particular emphasis on heavy oil. The Saskatchewan Research
Council's petroleum research group and the University of Regina's
petroleum engineering group will be the two partners in the PTRC,
which will house 50 researchers and staff initially and grow to 100,
including graduate students, in several years.
"With all this expertise under one roof, the Centre will become
one of the premier petroleum research groups in North America and
an important training ground for the industry," Minister Goodale
said. "The new science and technology partnerships that evolve
will boost our efforts to sustainably develop this important
Saskatchewan resource and will support job creation in
Saskatchewan's oil sector that already employs 20,000 people."
Ministers Goodale and Lautermilch signed a Memorandum of
Understanding at today's ceremony committing five-year operating
funding of $5 million from Natural Resources Canada and
$1 million from Saskatchewan Energy and Mines. The provincial
government is also contributing $7 million through funding to the
Saskatchewan Research Council and up to $1.8 million through
support from the new Saskatchewan Petroleum Research Incentive.
The building is expected to cost $10.8 million. Minister
MacKinnon announced that the Saskatchewan Opportunities
Corporation (SOCO) will construct and own the building and
contribute $4.8 million in capital costs. Ministers MacKinnon
and Goodale also announced the PTRC will receive $6 million in
capital funding as the first project approved under the recently
signed Canada-Saskatchewan Western Economic Partnership Agreement
(WEPA).
"This project exemplifies the innovative research-driven activity
the WEPA is designed to encourage," Minister MacKinnon said.
"This is also an exciting initiative for SOCO as developer of the
new Regina Research Park, which will help keep our economy
growing and create jobs for Saskatchewan."
"Western Economic Diversification is pleased to contribute,
through WEPA, toward a vital project for both the Saskatchewan
research and development sector, and its oil industry," said Ron
J. Duhamel, Secretary of State for Western Economic
Diversification. "The PTRC will be a source of innovative
technology that will mean growth for the oil industry both here
and in Western Canada. It will add to Saskatchewan's reputation
as a significant oil industry player and bring value-added
economic spin-offs, not to mention highly skilled jobs."
"Industry linkages hold the key to the PTRC's success," Minister
Lautermilch said. "Our petroleum research incentive could
trigger up to $4 million annually in private industry laboratory
research expenditures at the Centre. Strong industry guidance
and support at the Board of Directors level will go a long way to
ensure that research activities have practical applications and
ultimately provide significant economic benefits to the people of
Saskatchewan."
"The PTRC will enhance collaboration, increase economic
development, create job opportunities and provide new challenges
for faculty and students at the University of Regina,"
University of Regina President David Barnard said. "The Centre
and the Research Park provide new avenues for the university to
serve the province and its people."
The Centre will be run by a 10-member board of directors, chaired
by retired Wascana Energy president Frank Proto. Five members of
the Board will represent Saskatchewan's petroleum industry.
Construction on the PTRC is expected to start next spring, with
the building expected to open in 2000.
Funding for NRCan's contribution was provided for in the 1998
federal budget and is therefore built into the existing fiscal
framework. This announcement is an example of how the Government
of Canada is prioritizing its spending so that it can better
serve Canadians by making efficient use of their tax dollars.
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For more information contact:
John Embury Marg Moran McQuinn
Press Secretary Communications
Natural Resources Canada Saskatchewan Energy and Mines
Ottawa Regina
Phone: (613)996-2007 Phone: (306)787-2567
Joanne Mysak Irene Rau
Western Economic Diversification SOCO
Saskatoon Regina
Phone: (306)975-5942 Phone: (306)787-8576
NRCan's news releases and backgrounders are available on the
Internet at http://www.nrcan.gc.ca/
BACKGROUNDER
THE PETROLEUM TECHNOLOGY RESEARCH CENTRE (PTRC)
Total capital costs
Total capital costs are $10.8 million. The capital cost of the facility is divided as follows:
$6 million non-repayable contribution for capital construction, cost-shared by the federal and provincial governments through the Western Economic Partnership Agreement, administered by Western Economic Diversification Canada and Saskatchewan Economic and Co-operative Development; and
$4.8 million for capital construction financed by Saskatchewan Opportunities Corporation (SOCO). This funding will be recovered by SOCO in rental charges paid by building tenants.
Annual operating budget:
The annual operating budget for the PTRC and its partners will be $5 to 7.5 million, divided as follows:
Natural Resources Canada will provide up to $1.2 million per year in funding, including support for at least 6 research professors at the University of Regina;
Saskatchewan Energy and Mines will provide $250,000 in annual funding to the PTRC;
Industry will provide up to $4 million to support research at the PTRC. Saskatchewan Energy and Mines will provide up to $500,000 to industry through the Saskatchewan Petroleum Research Incentive to support this research;
The Saskatchewan Research Council (SRC) will have a budget of about $1.5 million; and
The University of Regina will have a budget of approximately $500,000.
The Facility:
The facility is a development of Saskatchewan Opportunities Corporation (SOCO).
It will be approximately 55,000 square feet.
Plans include the construction of an energy-efficient building built to C2000 standards.
It will be located on Research Drive in the Regina Research Park, across from ISM.
It will house 50 staff/researchers initially (growing to 100, including graduate students, in two to three years) and include the Saskatchewan Research Council's petroleum research division and
the University of Regina's petroleum engineering group, with affiliations to the SRC's pipeline technology centre.
Timetable:
Board appointment October 1998
Design complete January 1999
General manager hired early 1999
Tenders issued March 1999
Building opens Spring 2000
Operations:
PTRC will be a separate legal entity.
Ten Members of the Board, including the Chair, will provide strategic direction and promote industry support of research projects.
There will be a minimum of five industry representatives (including the Chair), and senior officials from Natural Resources Canada, Saskatchewan Energy and Mines, the Saskatchewan Research Council and the University of Regina.
Frank Proto, former President of Wascana Energy, will be the first Chair of the Board.
A group of technical experts will advise on the allocation of funds to research projects and the development of new research proposals.
A PTRC manager will be hired to help the partners develop research projects, coordinate participants activities, market the PTRC's services and ensure that the technology researched and
developed in the Centre is communicated to industry.
Saskatchewan's Petroleum Sector:
Saskatchewan's Petroleum Sector employed approximately 20,000 people (directly and indirectly) in 1997, making it a leading sector of the provincial economy.
This sector forms an important part of the tax base of rural municipalities and provides considerable off-farm income for rural residents.
As of December 31, 1997, 1,164 million barrels of recoverable oil reserves remain and 2.7 trillion cubic feet of recoverable gas reserves; there are 24,800 oil wells and 8,575 gas wells capable of producing.
In 1997, the oil industry made $1.7 billion in capital investments in Saskatchewan.
The resource is marginal, compared to that in Alberta or abroad; recovery in some fields is as low as five to seven percent.
On average, only 15 percent of Saskatchewan's discovered oil can be recovered using current technology; much of this has already been produced.
The estimated 18 billion barrels of heavy oil in place in the Kindersley-Lloydminster area of the province represents the greatest potential for future reserves additions.
A previous successful new technology was horizontal wells, which have paid over $400 million in provincial royalties since 1990, generated $525 million in investment and sustained 4,300 jobs.
Depending on the success of enhanced oil recovery mechanisms employed throughout the province, a further 2 to 3 billion barrels of recoverable oil could be added in the future.
