LamSar Vice President Dave Hill says it has secured a contract to build 20 process modules used in the Assisted
Gravity Drainage (SAG-D) extraction which will be used by OSUM Oil at its Cold Lake, Alberta site. The units will
clean water used in the bitumen extraction process.
To extract the thick oil, steam is driven into the ground. As the bitumen comes up, so does the condensate from the
steam. The SAG-D process unit collects that and treats the water so it can be used again, says Hill, eliminating the
need for tailing ponds seen in other operations.
LamSar, a member of the Sarnia-Lambton Industrial Alliance, will build 20 of the modules which will “go together like
LEGO blocks on site.” Hill estimates the job will provide one year of work for 35 to 45 skilled fabricators, including
15 new positions.
Alberta oil producers have been scrambling to find contractors to help develop the oil sands and in the last year set
their sights on Ontario. A recent study shows Ontario businesses stand to generate $63 billion from the oil sands by
processing the crude or manufacturing equipment for Alberta companies.
LamSar set up an office in Calgary to take advantage of the boom and bring work back to Sarniawhere there are
hundreds of skilled labourers in the oil and gas industry.
Hill says this contract is just the beginning of work from the west. “This is the first major module project to come to
Sarnia,” says Hill.
“There is a lot of potential for module fabrication and module production,” says Hill. “Building them inOntario takes
away from putting men in the field (in remote Alberta) and into a controlled environment. It’s cost efficient and schedule
These units will travel to Cold Lake by transport at a cost of between $6,500 and $10,000. Even with the extra shipping
cost, Hill says Ontario shops can compete with fabricators in Alberta. He estimates building the same equipment at
the oil company’s sites in Alberta would cost 10 times more when the cost of housing and overtime are factored in.
Hill says LamSar is bidding on other projects out west and expects the oil fields will be a major source of work for
Sarnia fabricators in the next few decades.
“Alberta producers are looking to lock in contracts to supply the oil fields with standardized module units,” Hill says,
“Now contractors are finally in demand. I see a healthy future in the contracting industry for oil and gas.”