Inter Pipeline will spend $2.6 billion to transport bitumen to oil sands projects

Petroleum transportation and storage company Inter Pipeline Fund of Calgary has finalized agreements with the FCCL Partnership to  provide transportation of bitumen blend and diluent to three major oil sands projects in Alberta.  The FCCL Partnership is a business venture formed between Cenovus Energy and ConocoPhillips.

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Inter Pipeline says it shipped 30 per cent of crude oil and 40 per cent of oil sands volume in Canada in 2012. The new contract with FCCL will significantly increase the company’s oil sands gathering business.

The plans call for Inter Pipeline to provide 500,000 barrels per day of bitumen and 350,000 barrels per day of diluent, through newly constructed pipeline. The 840 kilometres of new pipeline, and seven new pump stations, will serve existing projects at Foster Creek and Cristina Lake in Alberta, and the still-in-development Narrows Lake project. The diluent-delivery portion of the project is estimated to become operational in mid-2014; the bitumen delivery will become operational in 2015.

The projects will require an investment of $2.6 billion by Inter Pipeline and will “expand and strengthen” the company’s oil sands gathering business, according to David Fesyk, the president and CEO. The initial term of the contracts, which will provide Inter Pipeline with fixed annual payments, is for twenty years.

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