For sale or lease: one massive Newfoundland fabrication yard with a megaproject history
Two companies with deep roots in Newfoundland and Labrador are competing for the right to either buy or lease the government-owned Bull Arm fabrication site in Trinity Bay.
Energy Minister Andrew Parsons says government negotiators are determined to generate maximum value for the province from a potential deal. Otherwise, he says, "we will walk away" from negotiations with DF Barnes Services Limited and NARL Marketing LP.
"Best case scenario: we find something that works for the companies and makes sense for the province and sees more work happening out there. Worst case scenario: we continue to hold it as a public asset," said Parsons.
DF Barnes and NARL Marketing emerged as the top two proponents following a request for proposals, and now the companies are making their pitches to either buy or lease the 25-square kilometre site, which includes 10 kilometres of paved roadway, 20,600 square metres of enclosed fabrication facilities, and marine infrastructure.
The provincial government describes Bull Arm as Atlantic Canada's largest fabrication site, and it has a rich history when it comes to the development of the province's offshore oil industry, beginning with construction of the Hibernia oil project in the early 1990s.
It also served as a crucial fabrication and construction site for other oil projects such as Hebron, Terra Nova and White Rose.
At various times, the workforce has swelled to several thousand people during peak construction activities, with the province being paid millions annually in lease payments by oil companies such as ExxonMobil Canada.
But the site has been underutilized in recent years, and industry players have been showing interest in acquiring the facility.
Parsons says negotiations with the two proponents are in the early stages, and he could not give a timeline on when a deal might be reached.
But with Premier Andrew Furey set to depart politics, a race underway to select his successor, and a provincial election expected sometime this year, a swift decision on the fate of Bull Arm is unlikely.
Parsons would not speculate on a preferred outcome, but says a deal could include a cash sale, or an agreement that guarantees job creation and economic development.
"If somebody can secure that, that's something we would look at," he said.
Parsons says Bull Arm is a world-class site with great potential in the oil and gas and renewable energy industries. But with the federal government placing an increasing emphasis on Arctic security, he says Bull Arm is also well-positioned for activities such as ship-building and vessel repair.
"We really are that gateway to the north," said Parsons.
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