As Equinor advances Bay du Nord, worried labour group launches 'Build Right Here' campaign
Energy minister says Bay du Nord oil will 'stay in the ground' if a satisfactory deal cannot be reached
As Equinor continues to advance the massive Bay du Nord oil project, labour groups worried about losing out have launched a lobby effort to ensure as much construction work as possible is done in Newfoundland and Labrador.
Trades N.L., an umbrella organization that represents 16 building and construction unions with more than 18,000 members, says it launched the "Build Right Here" campaign in hopes of rallying businesses and citizens behind the provincial government as it negotiates a benefits agreement with Equinor.
Equinor is now actively engaged with contractors and is looking for the right partner to design, engineer and build the massive ship-like production vessel for Bay du Nord.
Trades N.L. CEO Darin King said Equinor is sending strong signals that it wants to build all the components for the floating production, storage and offloading vessel for Bay du Nord outside of the province.
"When you read these expressions of interest it's very clear that their intention is to do the entire work outside the province … and limit the work in the province to the subsea modules and and associated tiebacks," said King.
Such a scenario would be "economically devastating" for the province and erode the skills of a workforce that has a long and proud history of fabricating topside modules for the offshore, said King.
The Bay du Nord production vessel will be similar to those used in the legacy Terra Nova and White Rose offshore oil fields. King said between 70 and 90 per cent of the modules for those vessels were fabricated in places like Bull Arm and Marystown, creating between 1,000 and 1,500 jobs during the construction phase.
He said a similar scenario should be required for the Bay du Nord production vessel, known as an FPSO, for floating production, storage and offloading.
"We've proven ourselves and our ability to do the work here in the province on multiple projects," King said.
Bay du Nord is a collection of oil discoveries in the Flemish Pass basin, 500 kilometres northeast of St. John's. The amount of reserves has grown dramatically following new discoveries in recent years, with some estimates as high as one billion barrels of oil, with the potential to deliver billions in revenue to the province. The discoveries are located in water depths ranging from 650 to 1,200 metres.
The project received federal environmental approval last spring, and Equinor has said final sanction could occur in the next year or so, with first oil by the end of the decade.
Before it can proceed, however, Norwegian energy giant Equinor must agree to a benefits agreement with the Newfoundland and Labrador government.
Those talks are ongoing, and Industry, Energy and Technology Minister Andrew Parsons was tight-lipped Tuesday when asked about the status of the negotiations.
But he said the province is taking a firm approach.
"This is not a Norwegian project, this is a Newfoundland and Labrador project," said Parsons. "The oil stays in the ground if it's not the right benefit for us."
The hull for the production vessel must be built internationally, but when Parsons was asked if the province would allow Equinor to complete the vessel elsewhere, he said, "The goal when it comes to topside modules and other works; we want what we can have here."
No one from Equinor was available for comment Tuesday. However, the company issued a statement saying, "It's too early in the development for Equinor to have concluded on project construction and fabrication planning."
Equinor is "committed to investing in the communities where we operate," the statement added. "We understand the criticality of maximizing local benefits, as well as compliance to the Atlantic Accord, while ensuring a project that is competitive for a final investment decision."
Equinor and the province reached a framework benefits agreement for Bay du Nord in 2018, but the project was derailed by the global pandemic.
Nearly five years later, the project is much larger because of the new oil discoveries. Equinor says that means the amount of fabrication work related to the project will also "significantly increase."