LARICINA ENERGY LTD. STONY MOUNTAIN PIPELINE PROJECT DESCRIPTION DOCUMENT FEBRUARY 2012
01 STONY MOUNTAIN PIPELINE Laricina will develop and follow an environmental protection plan that meets or exceeds regulatory requirements and industry standards. About Laricina Energy Stony Mountain Pipeline Environmental Stewardship, Health and Safety Laricina Energy Ltd. (Laricina) is a privately held, Calgary-based company that is creating value by developing Canada s oil sands using innovative in situ technologies. Laricina has a portfolio of targeted oil sands assets containing a variety of reservoir environments and geological character. These assets range from the familiar oil sands of the McMurray Formation to the developing Grand Rapids and Grosmont Formations, all of which offer significant resource potential. Laricina s diverse portfolio of oil sands assets are at varied stages of development. Development is underway at Saleski and Germain, Laricina s two core properties in the West Athabasca Oil Sands region. At Saleski an 1,800 barrels per day (bpd) pilot project is in operation and at Germain a 5,000 bpd commercial demonstration project is under construction. Laricina is a responsible energy company that will respond to the growing demand for crude oil through in situ oil sands development. Laricina proposes to construct a new 24-inch, 184 km blended crude bitumen pipeline to transport production from its Saleski Steam-Assisted Gravity Drainage (SAGD) development, located in the West Athabasca Oil Sands region of Alberta, to the Enbridge Pipelines Inc. (Enbridge) Cheecham Terminal, located approximately 70 km south of Fort McMurray. A second 12-inch diluent pipeline is planned for the same right of way. Diluent is a light petroleum liquid used to dilute bitumen and heavy oil so it can be shipped through a pipeline to domestic and export markets. Laricina is currently planning to install the two pipelines along with required tankage and associated facilities over two winter seasons in order to manage project timing and meet business commitments. The initial capacity of the blended crude bitumen pipeline, scheduled for completion in mid-2015, will be 200,000 bpd. The initial capacity of the diluent pipeline, scheduled for completion in 2016, will be 70,000 bpd. To mitigate the impact on environmentally sensitive areas, the proposed pipelines are routed south of both the Grand Rapids and Stony Mountain Wildland Provincial Parks commencing from Laricina s Saleski lease located at Townships 84 and 85 and in Ranges 19 and 20 W4M (approximately 70 km northeast of Wabasca, Alberta) to Enbridge s Cheecham Terminal located at 06-08-084-06 W4M. (See map on page 3). Laricina has named this development the Stony Mountain Pipeline. Laricina is committed to carefully assessing and mitigating potential impacts on the environment, to considering socio-economic issues related to the pipeline and to protecting the health and safety of Aboriginal communities, the public, contractors and our employees. The commitment to stakeholders is to ensure facilities are designed, constructed and operated with these results in mind. We will seek input from those who may be affected by construction activities and will work together to address their concerns early in the process as we work through the regulatory process for the Stony Mountain Pipeline. Through studies and ongoing dialogue with Aboriginal communities, regulatory agencies and other stakeholders, we will identify the potential effects the pipeline may have on the various land, air, fish, bird, wildlife and freshwater environments along the route and will utilize existing and proven mitigation measures during construction and operations. Laricina will develop and follow an environmental protection plan that meets or exceeds regulatory requirements and industry standards. Construction work will be conducted in accordance with Laricina s environmental, health and safety standards. Prior to going into service, the pipeline will undergo a rigorous inspection process to ensure that it is safe for use. The pipeline will be operated in an environmentally safe and responsible manner.
Horizontal Directional Drilling (HDD) HDD is an established and extensively-used pipeline boring technique which is particularly effective for water crossings. 02 A bore hole is drilled under the water body and the pipeline is then pulled back through the bore hole to the other side. HDD rig section of pipeline direction of pipeline pull Pipeline Need Preliminary Route Selection As new in situ projects are being developed, additional pipeline capacity is required out of the West Athabasca Oil Sands region. Laricina is currently operating a pilot at Saleski which has an approved 1,800 bpd capacity. Regulatory approval for the Phase 1 10,700 bpd expansion at Saleski is being sought which will increase the proposed production capacity to 12,500 bpd. Phase 1 will be the first of six expansion phases expected to increase Saleski s production to more than 270,000 bpd over a 30-year period. While pilot production is currently being trucked to market, the increased production from the planned expansion at Saleski will require a connection to existing pipeline infrastructure. The Stony Mountain Pipeline will initially serve Saleski, however, it is expected that other neighbouring projects may also use the pipeline. To meet the full development potential of Saleski and other potential neighbouring projects, the initial pipeline capacity of 200,000 bpd will need to be expanded in the future. Expansion options will be considered in the context of balancing overall operational requirements with protecting sensitive environments and mitigating new land disturbance. Laricina s preliminary route planning and selection for the pipeline has undergone careful consideration consisting of desktop reviews of topographical maps, land use and tenure information and land disturbances in the vicinity of the region, as well as route and site inspection by helicopter. Our primary pipeline route selection is founded on our commitment to manage potential impacts to wildlife and to the local environment, through mitigation, both during and following construction activities. Route selection criteria included the environment, construction cost and timing, existing linear disturbances, river crossing feasibility and right of way reclamation. As the Athabasca River crossing is a critical control point for the overall pipeline routing, Laricina conducted a preliminary assessment of the proposed crossing location in spring 2011. A geotechnical borehole investigation was executed during June and July 2011 and through this investigation Laricina determined that a horizontal directional drill (HDD) under the Athabasca River was a viable crossing option. Using HDD for pipeline crossings of roads, rivers and other obstacles is an established and commonly used technique. Additional geotechnical investigations will be conducted at the Athabasca River, and other watercourse crossings along the proposed route, as warranted, to gather the information required to ensure the pipeline is installed in a manner that minimizes potential impacts to the environment. Development of the proposed pipeline is contingent upon receiving regulatory approvals. Laricina will consult with regulators, Aboriginal communities, stakeholders, and land users on routing.
03 STONY MOUNTAIN PIPELINE 89 Development of the proposed pipeline is contingent upon receiving regulatory approvals. Laricina will consult with local 88 regulators, Aboriginal communities, stakeholders and land users on routing. Grand Rapids Wildland Park 87 Athabasca River 86 MUNICIPAL DISTRICT OF OPPORTUNITY NO. 17 REGIONAL MUNICIPALITY OF WOOD BUFFALO 21 85 19 KP 0 Saleski 18 KP 10 17 16 15 14 13 84 KP 20 LEGEND KP 30 Kilometre Post Proposed Stony Mountain Pipeline Highway KP 40 Railway Watercourse Waterbody Bovin Creek Municipal Boundary City / Town Park or Protected Area Proposed Conservation or Recreation Area First Nations Land Athabasca River KP 50 KP 60 KP 70 63 KP 80 KP 79 LAC LA BICHE COUNTY
Fort McMurray 04 N 89 Grand Rapids Wildland Park Clearwater River Clearwater 175 88 63 Gipsy Lake Wildland Park 87 Gregoire/Willow Lake Expansion Gipsy - Gordon Wildland Park 86 Hangingstone Provincial Recreation Area Gregoire Lake 176 Gregoire Lake Provincial Park 12 11 85 9 8 7 6 5 4 Maqua Lake Provincial Recreation Area 881 84 63 Stony Mountain Wildland Park KP 184 KP 180 Cheecham 83 Engstrom Lake Provincial Recreation Area KP 170 82 KP 160 81 90 KP 100 KP 110 80 KP 120 KP 130 KP 140 KP 150 Janvier 194 SCALE: 1: 500,000 km 05 10 15 20 79
NITY NO. 17 05 STONY MOUNTAIN PIPELINE 19 KP 0 eski 18 KP 10 KP 20 Right of Way Width K Community Involvement Given that the terrain poses challenges with respect to wetlands and access, we recognize how important it is to optimize working space and safety on the right of way. Laricina has determined that safe installation of the pipeline project will require an approximately 35 metre wide right of way (30 metre permanent and 5 metre temporary). Additional temporary workspace may be taken in areas of challenging slopes, wet terrain, road and water course crossings and other infrastructure such as existing pipelines. Laricina is committed to transparent consultation with all stakeholders and nearby communities in the areas in which we operate. Our public consultation program is designed to reflect Energy Resources Conservation Board (ERCB) Directive 56 to ensure that we: engage with Aboriginal communities in the area to learn and understand how our proposed pipeline project may impact their rights and traditional uses; build and maintain transparent, mutually beneficial and respectful relationships with Aboriginal communities and our stakeholders; listen effectively and seek to understand the Aboriginal communities and stakeholders perspectives, requests, and recommendations and give them every consideration in light of our business requirements; review our progress and learnings with potentially impacted Aboriginal communities; seek input into the design of the consultation process and practices to ensure we respect and meet the communications and consultation needs of participants in the area; provide timely, accurate information in a manner that is conducive to promoting understanding of the information we are sharing; provide Aboriginal communities and stakeholders with the opportunity to understand our plans and operations and provide feedback on how their input will be incorporated in our plans and operations; and establish and maintain open communication and a high level of inclusiveness by identifying and including those who may have an interest or potentially be impacted by our activities and proposed activities.
TE CU XE ACK B T R O CO STA M E RE P Laricina s Commitments Communications Model will be adopted to promote open dialogue and integrate stakeholder feedback into our consultation program. EN T IS R OU T TE ITMEN M Laricina will seek input into the design of the consultation process and will inform Aboriginal communities and stakeholders of proposed Stony Mountain Pipeline developments. We will provide all communities with the opportunity to understand our plans and operations, as well as provide feedback. L 06 Schedule Laricina intends to file regulatory applications in mid-2012. Pending regulatory approval, construction would start in late 2013 with right of way clearing. Based on Laricina s current plan, the blended crude bitumen pipeline will be completed by mid-2015, with the diluent pipeline completed a year later. 2012 2013 2014 2015 2016 2017 Aboriginal and public consultation process Application preparation Application filing Regulatory review Engineering Blended crude bitumen pipeline Construction Start-up Diluent pipeline Construction Start-up Final clean up
WE HOPE TO HEAR FROM YOU PLEASE CONTACT US We will listen to you and to what matters most to your community. Your voice will be heard through direct dialogue with our team. By understanding your priorities, we can work together to minimize the impact of the Stony Mountain Pipeline. FOR MORE INFORMATION Laricina welcomes input from local communities, Aboriginal communities, land users, and stakeholders and can be contacted for questions or comments. Yvonne Walsh Manager, Community Engagement Laricina Energy Ltd. T: 403.718.9370 East Tower, 5 th Ave Place F: 403.263.0767 Suite 800, 425 1 st St. SW pipeline@laricinaenergy.com Calgary, AB T2P 3L8 www.laricinaenergy.com