06-08-01 Scores of onlookers gathered on Signal Hill to take part in an unofficial send-off for the Terra Nova, a massive ship that's the centrepiece of Newfoundland's second, major offshore oil project. The $ 2.7-bn vessel, which set sail four years after the Hibernia oil platform was towed to the Grand Banks, is the first of its kind in North America. More importantly, its completion confirms the oil industry's long-term commitment to Newfoundland, said Gary Bruce, Petro-Canada's vice-president of offshore development.
"Hibernia kick-started the industry here," Bruce said. "I look at Terra Nova as building on that. It's a project that shows we can build a competitive project without government money." Hibernia, which was widely criticized as a tax-dollars sink hole, took three times longer to build and cost twice as much as the Terra Nova. Still, the Terra Nova project has had its share of problems.

The project is already one year behind schedule and about $ 1 bn over budget. There were engineeringand workmanship problems, not to mention a wildcat strike at the Bull Arm fabrication site on Trinity Bay.
"When you do a new design, it usually runs you into problems," Bruce said. But the positive impact on the Newfoundland economy has been significant. Though the ship's hull was built in South Korea, the complex topside modules were fitted to the vessel in Newfoundland.
On average, about 1,100 people - 80 % of them Newfoundlanders -- were employed at the Bull Arm site during the past three years. The project has helped keep Newfoundland's economy growing at a torrid pace. And once production ramps up in 2002, the province's economy is expected to vault ahead of all others once again.

Production is expected to begin in three months and continue for the next 18 years. The Terra Nova oil field, which is about 350 km southeast of Newfoundland, is thought to contain about 370 mm barrels of recoverable light crude oil. The nearby Hibernia field, which produced first oil in late 1997, is thought to contain about 800 mm barrels of oil.
"In western Canada, we've been going out of the oil business for the past ten years -- we're producing more than we're finding," said Bruce. "We needed another place in Canada to find some of that light oil." At 17-storeys high and three-football-fields long, the Terra Nova looks like an oil tanker on steroids.
On top of its double-walled hull, which can hold 1 mm barrels of oil, is a complex network of pipes and valves that will be used to pump and process oil and gas taken from beneath the ocean floor. The ship is known as an FPSO, which is short for floating production, storage and offloading vessel.

There are more than 100 similar ships operating on the high seas. But the Terra Nova FPSO is different because it's the only one designed to endure heavy ice conditions. And it has a special quick-release mechanism that will allow it to drop its flexible flow lines to dodge an iceberg or ride out high waves.
"It's just like a nuclear weapon," said Bruce. "There's a number of safeguards." Petro-Canada is the operator for Terra Nova and it has a 34 % stake in the venture, compared with a 20 % stake in Hibernia. Facts about the Terra Nova FPSO, which set sail from Newfoundland: Vessel: The $ 2.7-bn floating production, storage and offloading vessel is 298 metres long, 17 storeys tall and will carry 1 mm barrels of oil.

Production:
About 150,000 bpd. Production starts in about three months.

Construction: Hull built in South Korea and topside modules added at Bull Arm fabrication site in Newfoundland's Trinity Bay.

Oil Field: Discovered in 1984, it is thought to contain 370 mm barrels of oil. It's about half the size of the nearby Hibernia field.

Depth: Four oil wells under 95 metres of water, about 350 km southeast of St. John's.