By Paul Morden, Sarnia Observer
A campaign by Sarnia companies to tap into work in Alberta’s oil sands is beginning to pay off. Dave Hill, vice-president of LamSar Industrial Contractors, said it has been contracted to build 20 modules for Osum Oil Sands Corp. and ship them west to its project near Cold Lake, Alberta.
Modules are sections of industrial process facilities built in smaller pieces that can be shipped in and assembled together onsite.
“We just started on them,” Hill said. “It’s a little bit over a year’s worth of work.”
At its peak, the contract will employ about 45 people at LamSar in Sarnia, Hill said.
He added the contract with Osum may be just the beginning.
“I’ve got a lot of bids on the go for Alberta, so hopefully we’re going to be successful on some of those, as well.”
LamSar is one of 40 Sarnia-Lambton fabrication companies, machine shops, engineering firms and others that formed the Sarnia-Lambton Industrial Alliance to search out customers beyond Chemical Valley, where business had slowed in recent years.
With help from staff at the Sarnia-Lambton Economic Partnership, the alliance has taken its message to Alberta, and hosted visits in Sarnia by representatives of oil sands companies.
David Moody, with the Sarnia-Lambton Economic Partnership, said the LamSar contract is good news for the alliance.
“We understand there’s lots more in the works,” he said.
“So, we’re hoping there will be more announcements in the near future.”
The modules being built by LamSar will be transported by truck to Alberta to be part of water treatment facilities at the Osum project.
“They inject steam into the ground and the bituman and the condensate comes up, and the water is treated so it can be resent,” Hill said.
Osum is building a 35,000-barrel-per-day project near Cold Lake, but it’s just one of a number of oil sands projects that Ontario manufacturers and suppliers are hoping to do business with.
Ontario’s Ministry of Economic Development, Trade and Employment says oil sands projects are expected to generate capital projects worth $160 billion by 2020.
“This is the first time we’ve fabricated process modules for Alberta,” Hill said.
The amount of work being done in the oil sands has oil companies looking beyond suppliers in western Canada, opening the door to companies in Sarnia with experience working in Chemical Valley.
“We have the resources locally, we have the skilled trades, we have the capacity and I think we have the ability to ship certain size process modules, at a reasonable cost, out to Alberta,” Hill said.
“I think that’s the message we’re trying to get out.”
Moody said the alliance is also continuing to search for funding to create a dedicated shipping route that would allow Sarnia-Lambton’s industrial fabricators to ship large modules via the Great Lakes.
A recent study estimated street and dock upgrades needed would cost $3.4 million to $6.4 million.
“I think the next step we’re looking at is building a business plan to go along with the actual transportation route,” Moody said.
While there remain restrictions to shipping large modules west, he said, “we feel there’s other possibilities going east.”
That includes Newfoundland’s Hibernia and Hebron offshore oil projects, “as well as international destinations,” Moody said.
paul.morden@sunmedia.ca