GN seals new Nunavut fuel deals

Like two purring cats who have swallowed the family goldfish, the heads of two non-Nunavut companies glowed with contentment this week as they signed the multimillion-dollar fuel contracts they plucked from the hands of their Inuit-owned competitor last year.

During a 45-minute signing ceremony in the Nunavut legislature on Jan. 14, Tim Faithfull, president and CEO of Shell Canada Ltd., and Mel Woodward Sr., head of the Woodward Group of Companies, made sure reporters heard about their firms’ longstanding ties with northern Canada.

Faithfull boasted that Shell has served the eastern Arctic for more than 50 years. That includes a long relationship with Iqaluit, which ended in 1996. “I’m really pleased to bring Shell back to Iqaluit,” he said.

Shell’s Canadian boss also said his company’s fuel will come from Canadian refineries. “We stand behind the quality of our product,” Faithfull said.

The Nunavut government is still cutting compensation checks for hundreds of Baffin and Kivalliq snowmobile owners whose machines were damaged by a supply of sub-standard gasoline that the Northern Transportation Company Ltd. bought in 2001 from a refinery in New Jersey.

The GN’s contract with Shell specifies that the deposit-control additive found to be missing in the old NTCL-supplied product in 2001 must be included in Shell’s new gasoline.

Mel Woodward Sr., whose Labrador-based firm will ship Shell’s fuel products, said his company has been serving the Arctic for 36 years. In 1967, Woodward started a fuel distribution service in Resolute Bay.

“We know the people, we know the environment,” Woodward said.

Woodward’s shipping firm will deliver Shell Canada’s fuel to all communities in the Baffin and Kivalliq regions. Woodward’s delivery contract will save the Nunavut government about $19 million over the next three years.

He said his company wants to look at making more investments in Nunavut, including a General Motors dealership here.

“We’re going to take a very close look at the development of Nunavut,” Woodward said.

A sign of the Woodward Group’s interest in Nunavut is its recent purchase of the Tuvak, a shiny new tanker built in Finland. The Tuvak will pick up fuel from Montreal and deliver it to Baffin communities.

The Mokami, a shallow-draught tanker that has delivered fuel for the Nunavut Power Corp. for several years, will pick up Shell’s products in Churchill and deliver them to Kivalliq communities along the west coast of Hudson Bay.

As for NTCL, the company will continue to ship fuel to the Kitikmeot region on barges running up the Mackenzie River and along the Arctic coast. Imperial Oil Ltd. will supply the Kitikmeot’s fuel product. Chris Coté of NTCL signed that deal during Tuesday’s ceremony.

Fifty per cent of NTCL’s parent company, Norterra, is owned by the Inuvialuit of the western Northwest Territories. The other 50 per cent is owned by Nunavut’s Nunasi Corp.

In 1996, NTCL won a $90-million contract to supply and ship fuel to the Baffin and Kivalliq regions. That contract was renewed in 1999, just before the creation of Nunavut.

But last year, the government of Nunavut separated that contract into two parts: one for supplying fuel, and the other for shipping it.

After being out-bid by their competition on both contracts, NTCL officials announced they will reassess their dry cargo service to the Kivalliq region. That’s because the company shipped dry cargo and bulk fuel from Churchill in the same barges, realizing cost savings on both services.

Kirk Vander Ploeg, NTCL’s marketing manager, said the company’s review of its Kivalliq operations won’t be finished until the end of the month.

Meanwhile, the government of Nunavut issued a request for proposals late last year seeking a firm to provide a dry-cargo service in the Baffin and Kivalliq. That contract has yet to be awarded.