Inter Pipeline Expands Polaris Pipeline for Kearl Oil Sands

Source: 8/7/2013, Location: North America

Inter Pipeline Fund ("Inter Pipeline") announced that it will increase capacity on its Polaris Pipeline system in support of the phased development of the Kearl oil sands project operated by Imperial Oil Resources Ventures Limited ("Imperial"). Under the terms of an existing 25-year ship-or-pay diluent transportation contract, Imperial holds an option to increase its firm capacity commitment on the Polaris Pipeline from 60,000 barrels per day currently to 120,000 barrels per day. Imperial has exercised its option and, accordingly, Inter Pipeline will install additional pumping capacity on the Polaris system to meet Imperial's higher diluent requirements.

Inter Pipeline will utilize its existing 12-inch diameter Polaris diluent pipeline, which runs from the Edmonton area to the Kearl project north of Fort McMurray, to supply additional diluent transportation capacity. Inter Pipeline will invest approximately $45 million to expand mainline capacity through the re-commissioning of three existing pump stations on the Polaris system, which were removed from service in 2011. Upon completion, capacity on the Polaris 12-inch pipeline will increase to approximately 165,000 barrels per day to meet diluent demand from Imperial and other third party shippers. The new pump station facilities are expected to be in service by mid 2015.

Inter Pipeline receives approximately $37 million in annual EBITDA for diluent transportation services under the existing Polaris ship-or-pay agreement with Imperial. As a result of Imperial's higher capacity commitment, Inter Pipeline expects to receive incremental EBITDA of $19 million per year once the new Polaris mainline facilities are in service.

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Related Categories: Coalbed Methane  General  Heavy Oil  Methane Clathrate  Oil Sands  Oil Shale  Shale Gas  Tight Gas  Tight Oil 

Related Articles: Coalbed Methane  General  Heavy Oil  Methane Clathrate  Oil Sands  Oil Shale  Shale Gas  Tight Gas  Tight Oil 

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