North Atlantic enters non-binding MOU with N.L. government to lease Bull Arm fabrication site

Newfoundland and Labrador has found someone to lease and operate a massive fabrication site in Trinity Bay.

North Atlantic was awarded the lease for Bull Arm, entering into a non-binding memorandum of understanding with the provincial government to develop a "green energy centre of excellence" at the site in collaboration with private and public partners to "support the energy transition."

"Commercial items in the non-binding MOU protect the provincial government's interests as the owner of this major industrial site, while providing North Atlantic the flexibility it needs to successfully attract investment and business to the site and earn a return on its investment," reads a statement issued by the Department of Industry, Energy and Technology on Thursday morning.

Industry Minister Steve Crocker said the 25-square kilometre site will be used for a variety of projects, including wind energy and green hydrogen research. He added North Atlantic's proposal makes use of all the site's facilities including its open yard and deep water port.

Crocker said a key interest is the site's potential to support national defence opportunities.

"Right now it's extremely timely for us because there are numerous national defence opportunities that are currently happening literally as we speak," he told CBC News on Thursday afternoon.

Last month, the federal government pledged to spend 5 per cent of its gross domestic product on Canada's national defence by 2035.

"It was important for us to give certainty … that as a province, we're there to make sure that Newfoundland and Labrador gets its share of this new defence commitment," said Crocker.

A 'renewable energy hub'

North Atlantic President and CEO Ted Lomond said current operations in oil and gas would continue and the understanding would see the site become what he calls a "renewable energy hub."

Bull Arm is three kilometres away from the company's Come By Chance deep water port facility, which Lomond says would be utilized.

He said national defence projects would likely involve the Victoria-class submarine program as well as maintenance and repair projects.

"We think there's some opportunity to do some significant work here in the province because of our geographic location, those large industrial assets, deep water port and just the enthusiasm around that," Lomond said.

The property has a long history as the host for oil and gas megaprojects, originally developed in the early 1990s for Hibernia and playing a role in the development for the Hebron project.

Crocker said that just as the oil industry was a new frontier decades ago, green hydrogen is the new way forward now.

"This is a new burgeoning industry here in this province and to have that type of research done here will be extremely important as we move forward," he said.

North Atlantic will take on operational and maintenance costs while kicking back a share of profits and wind development royalties to the province.

For Crocker, the biggest payback from this project is to keep the province's trade workforce at home. 

"Since its inception, Bull Arm was built — literally built — by trades workers," he said. "So this is an opportunity to make sure that the excellent workforce that we have already can find jobs here at home."

"We're going to ensure that we're getting the most benefits for Newfoundlanders and Labradorians and we'll keep that as our guiding principle as we get towards the definitive agreements," he said.

Crocker said there is no timeline on when the agreement with North Atlantic will be finalized.

The lease for the Bull Arm Site is currently held by Bull Arm Fabrication Inc., which operates the site on behalf of the provincial government.

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