Big Deals: A sampling of billion-dollar babies
August 1, 2015 by On-Site Magazine
Billion-dollar projects related to the energy industry have become commonplace, and two of the biggest are LNG terminals planned for B.C.
Petronas’s $11-billion Pacific Northwest project is a proposed natural gas liquefaction and export facility on Lelu Island. The facility would process and export natural gas produced by Progress Energy Canada Ltd. TransCanada Pipeline Ltd. will design, construct and operate a natural gas pipeline that will carry gas to the facility.
The project has received a conditional financial investment decision from the Malaysian energy firm’s board. Following selection of an engineering, procurement and construction contractor, the company has announced that it will be on the lookout for a variety of contractors, including: civil and earthworks; mechanical; electrical; marine; pre-engineered building design; fabrication; and concrete foundation and wall constructors, among other specialties.
Another super megaproject is the LNG Canada project, a partnership of Shell, KOGAS, Mitsubishi and PetroChina. It has an estimated value of more than $25 billion. Being considered for the site of a former methanol plant in Kitimat, B.C., it has not yet reached a final investment decision. The plant will process, store and transport LNG.
LNG Canada must first ensure the project is economically viable and meet several significant milestones related to gas supply, engineering and cost estimates, supply of labour and regulatory approval. CFSW LNG Constructors, a partnership of Chiyoda, Foster Wheeler, SAIPEM and WorleyParsons, has been named as the main contractor for construction. Phase 1 construction could take five to six years.
Electrical generating and transmission megaprojects seem to be popping up like weeds across the country as consumption grows and existing electrical infrastructure ages.
The biggest hydro project on the books is B.C. Hydro’s $8.3 billion Site C Clean Energy Project. The project involves a third dam, reservoir and hydroelectric generating station on the Peace River in northeast B.C. Part of the project includes the realignment of six sections of Highway 29 over a distance of 30 km.
Approved by the provincial government at the end of last year, construction is expected to begin in the summer of 2015 with completion in 2024. The project is currently the subject of protests by the B.C. Government and Service Employees’ Union, First Nations and environmental advocates.
Site C is not the only Big Hydro project on the books. In Newfoundland, Nalcor Energy is behind the Muskrat Falls development on the lower Churchill River in Labrador. The project includes an 824-MW dam and more than 1,500 km. of transmission facilities. Significant procurement activity for the project is already underway. The project is expected to generate more than $1.9 billion in income to businesses in Newfoundland and Labrador, $2.2 billion in Atlantic Canada and $4.7 billion across Canada, according to Nalcorp Energy.
Quebec Hydro’s Romaine Complex on the Romaine River has been estimated at $6.5 billion. It will ultimately consist of four generating stations, three of which will be operational by 2017.
The Keeyask Hydropower Limited Partnership is composed of Manitoba Hydro and four First Nations. The Keeyask Project includes infrastructure, generating and transmission components. The first generator unit in-service date is targeted for 2019, with all units being commissioned by 2020 at a total cost of $6.5 billion.
Ontario Power Generation’s Lower Mattagami Hydroelectric Complex, $2.6 billion, involves new generating capacity and upgrading of existing plants on the Mattagami River. The project is in the approvals phase, and it will take an estimated minimum of four years to complete these projects.
ROADS AND BRIDGES
Roads and bridges are the poster children for infrastructure renewal, and two bridge megaprojects are in the offing.
The New Champlain Bridge Corridor project is a $2.15-billion P3 deal signed with consortium Signature on the Saint-Laurent Group (SNC-Lavalin, Flatiron and Dragados Canada). SSL will operate and maintain the bridge for the duration of the concession period, until October 2049.
The 3.4-km bridge will replace the existing Champlain Bridge and includes two vehicle corridors and a transit corridor. It will also have a multi-use path for pedestrians and cyclists.
In addition, the federal portion of Autoroute 15 is to be reconstructed and widened. Completion is expected to be completed by the end of 2018, with the balance of the project scheduled for completion in 2019.
Another iconic crossing is at Windsor/Detroit. The Windsor-Detroit Bridge Authority (a not-for-profit Crown corporation) has launched the first phase of the procurement process to build the $2.1 billion Gordie Howe International Bridge project. The WDBA will manage the procurement process for the design, construction, operation and maintenance through a public-private partnership (P3) and will be responsible for project oversight as well as setting and collecting tolls. The overall procurement process is anticipated to be up to 18 months in duration.
The roster of highway megaprojects keeps lengthening, too. The $5-billion Southwest Calgary Ring Road, for example, is planned to consist of 31 km. of six- and eight-lane road, 46 bridges, a rail underpass and 14 interchanges. It is planned as a P3. Following the completion of land-transfer agreements, Alberta’s provincial government recently pledged to complete construction within seven years.
Another massive megaproject is the Turcot Interchange in Montreal: the provincial government recently signed a $1.54-billion contract with the KPH-Turcot consortium (Kiewit Canada, Parsons Canada, Holcim Canada and WSP Canada Inc.) The project is expected to take five years.
In B.C., a bridge replacing the George Massey Tunnel is under study at a cost estimated at $3 billion. Construction could start in 2017.
While buildings seldom reach the high valuations of other infrastructure in Canada, some are noteworthy in terms of their price tags.
While it is now substantially complete, Halton Healthcare’s Oakville Hospital was a marquee project, with a $2.27 billion price tag. The 148,645 sq m. hospital will have a capacity of up to 457 inpatient beds on opening day in December.
In Montreal, the $2 billion Centre hospitalier de l’université de Montréal (CHUM) hospital development is under construction, with completion of the 268,000 sq. m. hospital set for 2016 and the administration building complete in 2019. The hospital is aiming at LEED Silver and will offer 772 beds and 39 operating rooms.
A federal Public Transit Fund is planned for 2017 to grease the wheels of billion-dollar transit projects. There should be no shortage of applicants.
Toronto’s Metrolinx agency is behind several transit megaprojects, the largest being the $5.3 billion Eglinton Crosstown LRT. The 19-km. project includes 25 stations and stops, connections to three subway stations and several GO Transit lines and a 10-km. underground portion.
The project is a 30-year DBFMO P3, awarded to Crosslinx Transit Solutions (EllisDon, ACS Infrastructure Canada, Aecon, and SNC-Lavalin) in June. Construction is underway, with completion set for 2020.
Other big jobs on Metrolinx’s plate include the Scarborough Subway Extension ($3.3 billion) and the Spadina Subway Extension ($2.6 billion), along with several smaller megaprojects.
The federal government has committed $1 billion to the proposed $3 billion second phase of Ottawa’s transit expansion plan. At present, the provincial government has not yet committed to supporting the plan. With completion tentatively scheduled
for 2023, Stage 2 will add 19 new stations and 30 km. of rail to Ottawa’s O-Train system.
In Alberta, Calgary’s Green Line will get 27 new stations and an additional 40 km of track, nearly doubling the size of the system, at an estimated cost of $4.6-billion. Construction should start in 2017.
Any list of Canada’s billion-dollar babies is something of a moving target. In many cases, the final costs are not known and the current price tags are only estimates. It is revealing in itself that we have to be selective in an article listing Canada’s billion-dollar construction megaprojects these days. It has become clear that a project has to be worth multiple billions before it makes the megaproject “A” list, and the era of the gigaproject (defined as projects worth more than $10 billion) is dawning.