Bull Arm for sale? Nalcor not ruling out any options for Trinity Bay fabrication site

The sprawling Bull Arm fabrication site in Trinity Bay faces an uncertain future after the Hebron project is towed out to sea, and Nalcor says it's not ruling out any options for the property, including an outright sale.

"If that were to come in we'd have to assess whether or not that's in the best interest of the province. So at this point in time we're not restricting any potential opportunities for the site," Nalcor vice-president Chris Kieley told CBC News.

The Bull Arm site has played a significant role in the development of Newfoundland and Labrador's offshore oil industry, but there's no obvious lineup of companies waiting to move in after ExxonMobil Canada moves out.

That's despite the fact another Hebron-like concrete platform is likely to be constructed in this province very soon.

Everything on the table

Work on the hulking Hebron project is nearing completion, bringing to an end nearly six years of intense activity that created thousands of construction jobs and billions in spending.

So Nalcor is making a pitch to the world: Bull Arm is available, and there are no limits.

Oil and gas. Manufacturing. Shipbuilding.

It's all on the table, including a sale.

"We're looking at our local activities that might be into the future here in terms of deep water activity offshore and those types of things. But we're casting a fairly wide net here," said Kieley.

"I think this is at the point in time where we really need to step back and see what opportunities might be out there worldwide."

Companies have until April 25 to submit proposals.

ExxonMobil lease expires a year from now

Hebron will be towed to the Jeanne d'Arc Basin, roughly 350 kilometres southeast of St. John's, in May, with first-oil scheduled for the end of 2017.

Bull Arm is a 6,300-acre property owned by Nalcor, Newfoundland and Labrador's energy corporation, and is currently leased by ExxonMobil Canada, the lead partner in the Hebron Project. That lease expires in March 2018.

There's high hopes that producing oil fields may be developed in areas such as the Flemish Pass and the Orphan Basin, but any construction is still years away.

Timing not right for Husky 

The slowdown at Bull Arm is occurring as anticipation builds for the West White Rose extension, which will likely involve the construction of a concrete gravity structure known as a wellhead platform.

But Bull Arm won't see much — if any — of this work.    

Husky Energy, operator of the White Rose field and satellite extensions, has said the company continues to evaluate both wellhead and subsea options for the project.

However, industry insiders say the wellhead is the preferred option, and Husky will construct the platform at a purpose-built graving dock at the Port of Argentia, in Placentia Bay, with sanctioning to occur this year.

So why is Husky not using Bull Arm, a proven site with key infrastructure such as a dry dock, fabrication yard and deepwater site?

Part of the reason is timing. 

Husky signed a lease agreement at the Argentia site in 2012, a benefits agreement with the province a year later, and had plans to move quickly on the project.

At the time, Hebron construction was also ramping up at Bull Arm, so that site was not available.

But then came the oil price collapse in 2014, and Husky deferred the project, saying it would also consider a subsea option for the expansion.

Husky now says it's close to sanctioning the project, but there are no plans to re-evaluate the site it will use.

Unlike Hebron, the wellhead platform will be built completely on dry land, inside the 25-metre-deep graving dock, and then towed into deep water so the topsides can be attached.

"Given that Bull Arm was not an option for our original schedule, we elected to build a fit-for-purpose dock that is deeper than Bull Arm," a Husky spokesperson said in an email to CBC News.

Sources also say Husky was drawn to Argentia because of the possibility it may build more wellhead platforms for the White Rose fields in the future, and wanted its own construction site.

Meanwhile, Kieley is not ruling out the possibility that Bull Arm may play play a role in the Husky project.

"I think that if there's any potential work that could be done from that project it will flow from the EOI [expression of interest] process," he said.