Heartland Sulphur Terminal Project Newsletter 1 September 2015 Introduction Heartland Sulphur LP ( Heartland ) is an Alberta Limited Partnership proposing to construct and operate a sulphur forming and transloading project (The Project) in the Industrial Heartland of Strathcona County. This industrial development site is located near the intersection of Highway 15 and Range Road 212 (on SE 27 TWP 55 R21 W4th). The project site is approximately eight acres and part of a larger land parcel owned by Gibsons. Heartland aims to lease this land from Gibsons and establish an agreement to use an additional part of their land for rail and transportation access. (See Figures 1 & 2 for site area). Pending approvals and public consultation, Heartland is planning to commence construction in Spring 2016 and start operations in January 2017. Figure 1: Proposed Site Location in proximity to towns About Heartland Heartland is a joint venture company between: Inter-Chem Canada Limited (Inter-Chem), an Alberta corporation that is a wholly owned subsidiary of International Chemical Company (ICC), a diversified industrials company based in Tulsa, Oklahoma, and; Lion Sulphur Inc., a wholly owned subsidiary of Petrosul International Ltd. (Petrosul), a privately held sulphur marketing company with offices in Calgary, AB and Vancouver, BC.
With over 25 years in the sulphur industry, Inter-Chem has become a leading North American marketer of liquid sulphur whose primary market is the Di-Ammonium Phosphate plant foods industry. Inter-Chem actively serves other industrial users of sulphur through its relationships with major oil and gas producers. Petrosul is Canada s most experienced sulphur company with over forty years as a sulphur aggregator and marketer. During this time, Petrosul has built, owned and operated three sulphur forming plants (two in British Columbia and one in Alberta). The company has sulphur storage (100,000 tonnes) and loading capacity in the port of Vancouver. Figure 2: Proposed Site Location close up Sulphur 101 Where does Sulphur come from? Sulphur occurs naturally as the pure element (native sulfur) and as sulfide and sulfate minerals. Today, almost all elemental sulfur is produced as a byproduct of removing sulfur from natural gas and petroleum such as bitumen upgrading and refining in the Oilsands. What is Sulphur used for? Sulphur is a key ingredient in fertilizers and an important nutrient for crop growth. Liquid/Molten Sulphur: Liquid sulphur in pure elemental form (at 120-160º C, or 248-320º F). Sulphur Prill: Formed, solid sulphur in spherical shape; produced by cooling liquid sulphur with water. Sulphur Forming Facility: a facility that receives liquid sulphur and cools it into small solid balls called prills for transportation. Sulphur Transloading Facility: a facility that receives sulphur by truck and transfers that sulphur into rail cars.
PROJECT OVERVIEW Project Need Sulphur supply is increasing in Alberta and there is a need for additional sulphur forming facilities to service this growing market. According to a 2011 report from the Energy Resources Conservation Board, bitumen refining is expected to increase by 56% by 2021 which means a large increase in sulphur as bitumen contains about 5% sulphur. As refining capacity increases, producers will be required to move more sulphur to maintain refinery operations. In addition, there are approximately 10 million tonnes of sulphur on blocks in the Oilsands that will require future reclamation. Sulphur is generally marketed internationally on a dry bulk basis for the purpose of safety, reliability, and maintaining the integrity of the product characteristics. In order to move product to the port and participate in overseas markets, Canadian sulphur producers must have access to sulphur forming facilities. Site Location The proposed Heartland plant location was selected based on several parameters: Proximity to transportation networks and emergency services: The site is strategically located adjacent to CN Rail. It also adjoins Range Road 212 and is within 300 meters of Highway 15. The local fire station is only 4.7 km away and is trained in all manner of industrial emergency response by virtue of the multiple industrial facilities already operating in the area. Environmental conditions: The site is located in a growing industrial area surrounded by existing and proposed industrial development. The development will be located on what is currently agricultural land and will avoid major disruptions to sensitive environmental ecosystems and water features. The property is currently in the application process for rezoning to heavy industrial under Strathcona County Land Use Bylaw 6-2015. Employee base and services: The Industrial Heartland area has numerous professional services for the facility and a has large and skilled work force. Proximity to supply: The site is close to sulphur production points in the Edmonton area and also closer to the oil sands sulphur supply than any other sulphur forming facility. Distance from residents: The site is approximately 13 km to Fort Saskatchewan, 6.6 km to Josephburg and 6.9 km to Bruderheim. There are about five residences within 1.5 km of the site. Site Development and Operation This forming facility will be designed to process 700,000 tonnes of liquid sulphur (sourced from Alberta oil sands and gas plants) each year, with a reasonable expectation of moving approximately 600,000 tonnes per year through the facility. The liquid sulphur will be delivered to the site primarily by B-train trucks with future potential for rail delivery. A B-train truck consists of two trailers linked together. Approximately two-thirds of the sulphur received will be formed into small sulphur prills and loaded into rail cars for shipment to West Coast export facilities. The remaining amount will be processed into liquid sulphur and loaded into rail cars bound for the US market.
The main site facilities will include: Truck off-loading, Liquid Receiving and Rail Car Loading area to receive and deliver product to market Sulphur Forming Unit to form liquid sulphur into prills Sulphur surge area to aggregate surplus sulphur prills (in the event of logistics disruptions) Storm Water Management System to collect and treat surface runoff and process water Truck Off-loading, Liquid Receiving and Shipping In the off-loading area, trucks will unload the liquid sulphur into a liquid receiving vessel. This unloading area will be designed to allow for two B-train trucks to unload both trailers simultaneously. B-train truck Once received, the liquid sulphur will be pumped to one of three areas: a heated 5,000 tonne liquid tank; a 2,000 tonne/day sulphur forming facility; or a liquid rail car loading facility. The sulphur holding tank will enable the facility to maintain consistent sulphur operations (forming and liquid rail car loading) during periods of low incoming sulphur volume from trucks. The tank will be designed specifically for holding liquid sulphur and take into account requirements for heat maintenance, level measurement, and safety. Venting and fire prevention/suppression will also be included in the detailed design. Additionally, Heartland will consult with Strathcona County and Alberta Transportation in regards to truck traffic limitations and impacts through the County to ensure Heartland fully meets all requirements and mitigates any impacts from operations. Sulphur Forming The facility will have the capacity to form 2,000 MT per day of solid sulphur. Wet prill technology will be used to convert liquid sulphur into sulphur prills. This process has been used in facilities around the world and forms sulphur by dripping very fine streams of liquid sulphur into a large water tank. As the sulphur sinks to the bottom of the tank, the sulphur cools and solidifies into small, spherical prills of solid sulphur. The prills and water exit the bottom of the tank and are separated Sulphur prills using vibrating screens. The prills discharge to the transfer conveyor and the water is recycled. This wet process significantly reduces the probability of creating sulphur dust by producing a prill with a higher moisture content. Solid Sulphur Loading/Surge Area Once sulphur is formed into solid prills it will be transported by conveyor directly into open rail cars for transport to the port of Vancouver. The facility s rail capacity will depend partially on the railroads level of service; however, a maximum of six industrial tracks are anticipated including (up to) three loading tracks and three inbound/ outbound tracks. As the facility will be able to produce 2,000 MT per day of solid product, approximately 20 rail cars will be needed daily. Since rail cars may not be available every day, the facility will have the ability to load at least 40 rail cars per day. Conveyor loading rail cars
In the event rail cars are temporarily unavailable for loading, the conveyor system will transition the product to the solid sulphur surge area. This short-term pile of solid prills may be necessary (less than 90 days) until rail cars are available. The surge area will be outside and will use both dust suppressant and wind screens to minimize dust generation. The facility will use front end loaders to transfer solid sulphur from the surge area to the rail car loading equipment when rail cars are available. Environment / Socio-Economic Environment This project will be designed, developed and managed to meet or exceed all applicable health, safety and environmental (HSE) regulations established by governing bodies. In addition, it will safeguard the natural environment and minimize any negative impacts upon the human environment. Heartland is committed to ensuring that sound and suitable procedures, equipment, training and resources exist throughout the company and are being utilized to comply with all HSE requirements. Water The plant will have minor process water requirements compared to many industrial applications because the water is only needed to cool the sulphur and can be recycled. The plant only requires approximately 2.5 m 3 /hr of make-up water to account for evaporation and a small amount of moisture that remains with the sulphur prills. Water supply will come primarily from a local utility provider with potential supplemental supply from the storm water pond or trucked in water. Storm Water Heartland recognizes the importance of appropriate industrial storm water management and will ensure that the project has a suitable and compliant plan. Storm water will be collected through a series of open ditches and culverts and discharged to a lined storm water pond to prevent groundwater contamination. If possible, Heartland plans to recycle and reuse all, or some, of the water from the pond as process water to reduce water requirements. Any water discharged from the site will be treated and tested prior to discharge. The quality of water discharged will be set by Alberta Environment in the Approval issued to the company under the Alberta Environmental Protection and Enhancement Act (AEPEA). Noise The site has been strategically located away from populated areas to avoid impacts from noise. Noise sources from the plant will be enclosed within a building with the exception of a conveyor system, some pumps and the front end loader. The primary noise source associated with the plant will likely be the backup alarm on the loader unit and will be mitigated to the extent possible without compromising employee safety. Heartland is undertaking a noise study to assist in managing any possible noise issues. To mitigate noise, Heartland will also consider various options such as landscaping (i.e. berms, trees, etc.) and noise controls such as back up cameras instead of beepers.
Air/Dust Air emissions will be limited to comply with the Approval from Alberta Environment and will include hydrogen sulphide (H 2 S) and carbon dioxide. Odours will be controlled through the installation of a degassing unit and scrubbing unit which will reduce the H 2 S content in liquid sulphur to a maximum of 10 parts per million and remove H 2 S from the vent air. Sulphur dust emissions will be mitigated based on the results of the Air Quality study using a combination of wind screens, dust suppressant, and minimizing material handling touch points. Traffic Traffic into the site is estimated at 60 vehicles per day (45 sulphur B train trucks and 15 employee vehicles). This represents a 1.7% increase in traffic on Highway 15 east of Highway 830 (7,230 vehicles/day in 2014). A Traffic Impact Assessment conducted by Associated Engineering concluded that due to the low percentage of traffic this project will represent, no road improvements are required at this time. With this said, they also concluded that even if this project were not to proceed, a left turn intersection treatment is warranted based on existing traffic volumes at the intersection of Highway 15 and Range Roads 211 and 212. Emergency Response A Quantitative Risk Assessment and Emergency Response Plan have been undertaken according to regulatory standards to address the potential for, and mitigation of, emergency incidents. The Major Industrial Accidents Council of Canada (MIACC) criteria have also been employed to determine the positioning of equipment on the site. The nearest fire station, Heartland Hall-Station #4, is located some 4 km from the site at Highway 15 and Highway 830. This 24-hour service fire station is staffed with seven full-time personnel, all with advanced fire and Emergency Medical Service qualifications. Company personnel on site will also have training in emergency response procedures unique to the sulphur forming and transportation industry. An RCMP detachment is also located within the Heartland Hall - Station #4. Sanitary and Solid Wastes All sanitary waste will be directed to holding tanks and trucked off site to an approved municipal waste treatment facility. Similarly, all solid wastes will be separated and trucked offsite to licensed landfills and recycling centres. Socio-Economic Construction Total project construction costs are estimated at $25 million. The construction stage will employ an anticipated 30-50 people over a six to nine month period. This represents some $1.4 million in wages and salaries. Major expenditures will be associated with the construction of a six-track rail yard and the installation of the sulphur forming plant.
Operations The operations are designed for a minimum thirty-year economic life. Up to eight people will be on-site 24/7/365 with two twelve-hour shifts per day. This will require a total operating staff of up to twenty people and represents some $1.6 million a year in wages and salaries. Six rail tracks will form the rail loading yard and Range Road 212 (presently paved) will serve as the main access road to the entrance of the site. Site servicing will include electrical, make-up water (2.5 m 3 /hr), natural gas, trucked-in potable water and trucked-out sewage from holding tanks. Property Taxes Property taxes are estimated at a total of $290,000 per year, the majority (86%) of which will go towards Strathcona County's financials. Health and Safety All workers employed on site will be trained and equipped to meet the Alberta Occupational Health and Safety Requirements. This will include specialized training in the handling of H 2 S gas. Gas monitoring and wind socks will also be installed on site. Schedule / Approvals Required Timeline The following represents a proposed timeline for development: Project Initiation May/June 2015 Project Planning / Design / Approval May 2015 - March 2016 Public Consultation September 2015 to January 2016 Construction April - December 2016 Operations January 2017 Approvals Required Based on current project conditions, Heartland has received exemptions for both an Environmental Assessment under the federal Canadian Environmental Assessment Act (CEAA) 2012 Legislation and an Environmental Impact Assessment under the Alberta Environmental Protection and Enhancement Act (EPEA). In addition, the main government approvals and municipal planning requirements for the project are provided below. All applications will require supporting technical studies which are currently underway. Rezoning: The subject lands are currently zoned AG - Agriculture General in the Strathcona County Land Use Bylaw and will have to be rezoned to IHH Heavy Industrial (Heartland). This application is currently underway by Gibsons. Water Act Approval.
Industrial Approvals application to construct and operate under the Environmental Protection and Enhancement Act. A Roadside Development Permit from Alberta Transportation. A Traffic Impact Assessment has already been completed. Approval to Construct and Operate a rail-line pursuant to the Railway (Alberta) Act for the connections from CN Rail to Gibsons private rail yard. Amendments to Strathcona County s Municipal Development Plan (MDP), the Heartland Area Structure Plan (ASP), and Land Use Bylaw (zonings). Land use amendments to the MDP and ASP will require approval from the Capital Region Board. Public Consultation - communicate clearly - provide opportunities for input - record and share all public input and concerns - be open and transparent Once the MDP, ASP, and Zoning amendments are approved, a Development Permit will be sought from Strathcona County. Construction and building permits for site development. Public Consultation A public consultation program will take place throughout the project approval, construction and operation phases. This program will have four main goals: 1. To communicate clearly and directly about the Project and each of its significant components. 2. To provide opportunities for stakeholders to easily provide input by consulting early and often. 3. To record and share all public input and concerns with the project team to enable a true appreciation of stakeholder concerns and allow the team to address the concerns. 4. To be open and transparent, which includes reporting back to stakeholders with summaries of all public consultation feedback. This also includes posting all consultation materials and summaries of public input on the project website. Specific consultation elements will include: Landowner and stakeholder interviews. Landowners up to 1.5 km from the site will be contacted for one-on-one interviews in Fall 2015. Project website. Consultation materials and summaries of public feedback will be posted. This will include a FAQ and comments section. Newsletters. These will be posted on the project website and distributed to landowners 1.5 km from the site as well as to key stakeholders. Responses to public inquiries and/or concerns. During the course of the project, Heartland will respond to public inquiries and concerns. There will be opportunities for the public to view the newsletters and other corporate and project information on the Heartland website. Contact Information John Bennett, Project Manager Heartland Sulphur LP phone:780.455.4292 website: heartlandsulphur.com email: info@heartlandsulphur.com